“Lifelong review” of retirement may have a twist in the STF

The Federal Supreme Court (STF) scheduled for next Wednesday (28) the judgment of the Union’s embargoes against the “whole life review” – a process that gave a group of retirees the prerogative to recalculate their benefits based on of old contributions to the National Social Security Institute (INSS). The Court’s understanding that it is possible to opt for the most favorable social security rule was formed in December 2022.

But, in addition to the appeal filed by the Attorney General’s Office (AGU), the analysis of a direct action of unconstitutionality (ADI) scheduled for the same day could undermine the right won by retirees. This is ADI 2,111, proposed in 1999 by the National Confederation of Metalworkers (CNTM) and which calls for the overturning of provisions of Law 9,876/1999.

The text questioned is that of the pension reform carried out under the government of Fernando Henrique Cardoso (PSDB), which created the pension factor and changed the way pensions were calculated that had been in force until then, creating the imbroglio that generated the impasse in the review of the entire life.

Until that moment, the benefit was defined considering the last 36 contributions, that is, the average of the previous three years. The new legislation stipulated that contributions collected throughout life would be included in the account, excluding the smallest 20%.

For those who were already in the system before the law was sanctioned, however, a transition rule was created: the calculation would start from July 1, 1994, the date the Real Plan began. Some people, however, ended up harmed, due to their “inverted” salary history – that is, because they had contributed more to the INSS in the period prior to July 1994 and had these contributions disregarded.

The 2019 pension reform, enacted during the government of Jair Bolsonaro (PL), changed the rules again. Since then, everyone who is able to retire from November 13, 2019 has had their average salary calculated based on all contributions made from July 1994 onwards.

After a series of postponements, by 6 votes to 5, the STF decided, on December 1, 2022, to recognize the possibility of this group of insured people using the definitive rule, which considers the entire history of Social Security contributions – hence the name “life review”. The winning thesis endorsed a 2019 decision by the Superior Court of Justice (STJ).

AGU annulment or modulation of the effects of the decision

The ruling was only published on April 13, 2023. On May 5, representing the INSS, the AGU filed the motion for clarification, arguing that it was not defined whether the revisions would be subject to limitation periods and statutes of limitations, nor whether the thesis reaches retroactive payments made under other parameters or final and unappealable decisions that had denied the right to recalculation.

The AGU argues in the process that the effects of the decision should only be applied to the future, excluding the possibility of reviewing already extinct benefits, installments already paid and therefore prohibiting the payment of differences prior to April 13, 2023.

Furthermore, the Union says in the appeal that there would not have been a majority among the ministers of the STJ at the time of the judgment in that instance, since the decision was taken by a panel of the court, and not by the full panel. Therefore, he requests that the STF decision be annulled and the case be returned to the previous court for a new trial.

To date, seven ministers have already given their votes in relation to the AGU appeal. Alexandre de Moraes, rapporteur of the case, defends the establishment of a time frame, from December 1, 2022, before which the recalculation of pensions should not be retroactive.

Before retiring, the then minister Rosa Weber disagreed with the rapporteur and argued that the effects of the decision should be set on December 17, 2019, when the STJ recognized the right to review one’s entire life. Edson Fachin and Cármen Lúcia followed this understanding.

Cristiano Zanin pointed out that modulation is necessary, but accepted the argument that the case should return to the STJ to be judged again. Ministers Luís Roberto Barroso, president of the STF, and Dias Toffoli followed Zanin’s understanding.

In July, Moraes responded to a request from the INSS and suspended the processing of all processes that deal with the review of the entire life until the embargoes for declaration are analyzed.

With the judgment of the appeal going to the physical plenary, the ministers will have to speak out again, with the possibility of changing the position of those who have already voted. Only Rosa Weber’s vote will be preserved. She retired in September 2023 and will be replaced by Flávio Dino.

For Diego Cherulli, vice-president of the Brazilian Institute of Social Security Law (IBDP), a possible decision that would revoke the right to retroactive amounts “will be a precedent of enormous harm to INSS policyholders”.

ADI may overturn decision on whole life review

The trial of ADI 2,111, which questions the constitutionality of provisions of the 1999 pension reform, began in a virtual plenary session last year, but was taken to a physical session following a request for prominence from minister Cristiano Zanin. The thesis that worries defenders of the whole life review was inaugurated by Luís Roberto Barroso.

In his vote in the remote trial, the minister recognized the constitutionality of article 3 of the law in question and argued that, as a result, the possibility – assured in the whole life review trial – of the insured person choosing between the best rule and to calculate your benefit.

For now, Barroso was the only minister to deliver the thesis, and the votes can still be modified in the in-person trial. Moraes, in turn, argues that the recognition of the constitutionality of article 3 “does not directly impact the debate on the ‘whole life review’”.