VIP Pension Reform Approved: Deputies’ Privileges Maintained | Breaking News

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legislators Approve Controversial “VIP” Retirement Plan Despite Reform Efforts

A newly approved retirement plan for members of the National Congress maintains significant privileges for legislators, despite ongoing reforms to the Fiscal fund and Parliamentary Fund. The plan allows lawmakers to retire with full benefits after just 10 years of service and at age 55, sparking criticism over perceived inequities in the system.

the approved version of the plan, described by some as a “with piolita” – a colloquial term suggesting a hidden benefit – permits legislators to access an unusual retirement option with minimal contribution requirements. This comes as the country grapples with broader fiscal challenges and public scrutiny of government spending.

Did you know? – The plan eliminates any state contribution to the fund, explicitly prohibiting subsidies or financial support from the government.

Maintaining a Two-Tiered System

Under the new rules, legislators will be able to retire with 60% of their per diems plus portrayal expenses after only 10 years of contributions, equivalent to two legislative periods, and upon reaching the age of 55. While presented as a move towards a “private fund,” the concept of mandatory contributions remains in place, though administrative and appointed officials of the National Congress have been excluded from the benefits. The plan specifically applies to deputies and senators.

“The intention was to modernize the system, but the core privileges remain intact,” stated a senior official familiar with the negotiations.

Key Change – Legislators’ mandatory monthly contributions will increase from 20% to 24% of their allowance and representation expenses.

Increased Contributions, Limited State Support

The legislation does include some changes to the financial structure of the fund. the mandatory monthly contribution from legislators will increase from 20% to 24% of their monthly allowance and representation expenses. Crucially, the plan eliminates any form of state contribution, explicitly prohibiting “subsidy, guarantee or financial support from the State in any of its forms to the assets or operation of the fund.”

Members of the Parliamentary Fund will retain the right to request the restitution of 85% of their contributions,to be paid in a single lump sum.

Retirement Options – Ordinary retirement requires 15 years of contributions and age 60,while extraordinary retirement is available at 55 with 10 years of contributions.

Retirement Pathways and Benefit Calculations

The plan outlines two primary retirement pathways: ordinary and extraordinary.

• Ordinary Retirement: accessible after 60 years of age and 180 months (15 years, or three legislative periods) of contributions. Benefits will be calculated as 80% of the average per diem and representation expenses received during the last 180 months of contributions.
• Extraordinary Retirement: Available at age 55 with a minimum of 120 months (10 years, or two legislative periods) of contributions. This pathway maintains the existing privilege of retiring with only 10 years of service, as previously defined under Law 6112/2018. Benefits will be 60% of the average per diem and representation expenses received during the last 120 months of contributions.

Retirement due to disability, resulting from non-work-related illness or accident, will provide a benefit of 20% of the per diem plus representation expenses.