Lisbon, Feb. 9, 2025 (Lusa) - Portugal's government wants to study the early retirement model, and experts interviewed by Lusa acknowledged that changes might be necessary, such as reducing the retirement age, although a complete halt could be "to drastic."
Pedro Mota Soares, former minister of labour and social security, believes that "social systems must have the capacity to constantly find improvements" and to "introduce the reforms that are necessary".
However, the former minister acknowledged that the system should have "safeguard clauses" for certain sectors or population groups (such as the long-term unemployed), maintaining access to early retirement because this is sometimes the only way out for those who become unemployed at an age when it will be difficult for them to re-enter the labour market.
However, he believes that there are simple changes that can be made.
"I acknowledge that it might make sense" for the age of access to early retirement to advance in the same way that the normal retirement age advances in line with average life expectancy.
"We need to be able to look ahead and introduce the reforms that are necessary, trying to make these reforms with the greatest possible consensus," with dialogue, to “ensure stability,” because, he stressed, "not wanting to do anything that would condemn the system to collapse in the long term."
Mota Soares also said that Portugal had a social system that, with more or less difficulties, allows people to be protected throughout their lives but emphasised that if there was no capacity to reform it, there was a risk of condemning it to bankruptcy.
"That's why we constantly have to look at the system and the labour market," he added.
Meanwhile, Economist João César das Neves told Lusa that a generalised halt on early retirement "could be too drastic".
The economist said, "It would be enough for the discount on the pension of those who want to retire early to reflect the loss that the country would suffer without that person's contribution."
César das Neves added that the idea of early retirement was "vicious", considering that if a person can't work they should retire at any age, but there is also no justification for "perfectly valid people to stop contributing to the country and live off the back of a system that is in serious financial difficulties".
Maria Teresa Garcia, a professor at ISEG, pointed out that the increase in early retirement has been noticeable, above all, since the beginning of the century. This was due to various measures that discredited the system, leading people who could retire early to do so.
However, he noted that although the number of early retirements is quite large, the effect of the annual increase has lost relevance since the penalties are so great that people no longer see early exits as a solution. He gives the example of a person who reaches the age of 60 with 36 years of contributions: if they take early retirement, their pension will be penalised (cut) by almost 50%.
Data from 2023 shows that Social Security awarded 102,435 new old-age pensions that year, of which 21,769 were under early retirement schemes. Of these, 40% (9,039) were awarded after long-term unemployment.
According to Pordata data, 112,523 of the 2,117,487 old-age pensions in payment were early. A year earlier, the total number of old-age pensions was 2,081,795, and the number of early pensions was 130,187.
The re-evaluation of the early retirement scheme is one of the issues that the working group, which was set up by the government and will be led by Jorge Bravo, who is in charge of studying measures to ensure the sustainability of Social Security, will analyse.
Despite the creation of this working group, the government has been signalling that it has no intention of implementing changes now, postponing them until after the legislative elections and a possible next parliamentary term.
LT/ADB // ADB.
Lusa
