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Adapting The Caixa Geral De Aposentações To The General Social Security Scheme In Respect Of Retirement And Pensions Calculation

Original Language Title: Adapta o regime da Caixa Geral de Aposentações ao regime geral da segurança social em matéria de aposentação e cálculo de pensões

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PROPOSED LAW NO. 136 /X

Exhibition of Motives

In the Agreement on Social Security Reform subscribed on October 10, 2006,

the Government and the Social Partners have assumed that the reform measures approved in the

scope of that Agreement, namely the sustainability factor, would be applied

in a framework of convergence between the various social protection regimes, in respect

by the spirit of Law No 60/2005 of December 29.

The convergence of the General Box regime of Retirements with the general regime of the

social security was started in 1993, with the application to the subscriptors enrolled in the

CGA as of September 1 of that year of the rules for calculating the pension scheme of the scheme

general, and met a strong boost in 2005, with the elimination of numerous regimes

special, the enrolment of the officials and agents of the Public Administration admitted to

departure from January 1, 2006 on social security and a profound alteration of the

conditions of retirement and the calculation formula of pensions.

The movement of approximation of the public sector pension system to that of the sector

private enters now into a new phase, of progressive stabilization of its rules, by

one side, and of sharing innovative concepts with the general regime, designed for

better to enable you to respond to the demographic challenges and to strengthen sustainability

financial of your system, on the other.

The value of retirement pensions thus undergoes being influenced by the application of

a factor of sustainability, which aims to translate the impact of the evolution of longevity

on the financing of the system, staying, concurrent and temporarily, limited to

a maximum roof whenever it is not possible to ensure that there is a

correspondence between the contributory effort carried out by the underwriter during his

career and the amount of pension to be allocated.

A new pension value bonus scheme is created and introduces a

amendment to the early retirement penalty regime, as a function of the moment

of the retiree.

A special treatment for the retired retirees is still provided for, in

function of the degree of disability that is recognized to them, to obtain any means

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of subsistence resulting from the exercise of any profession or work, through a

reduced warranty period, of the non-application, in certain circumstances, of the factor

of sustainability and equiparation, exclusively for minimum pension effect, to the

pensioners with a full career.

Define, finally, the rules to which will be in the future subordinate the regime of

update of pensions.

The procedures stemming from Law No. 23/98 of May 26 were observed.

Thus:

Under the terms of the paragraph d) of Article 197 (1) of the Constitution, the Government presents to the

Assembly of the Republic the following proposal for a law:

Article 1.

Calculation of pensions

Article 5 of Law No 60/2005 of December 29 is replaced by the following:

" Article 5.

Calculation of the retirement pension

1-A retirement pension of the underwriters of the General Box of

Retirees entered until August 31, 1993, with the denomination

from P , results from the multiplication of the sustainability factor

corresponding to the year of the retirement by the sum of the following

plots:

a) The first instalment, designated by P1 , corresponding to the time of

service provided until December 31, 2005, is calculated on the basis of

in the following formula:

R x T1 / C

where:

R is the relevant monthly remuneration in the terms of the Statute

of the Aposentation, deducted from the percentage of the quota for

effects of retirement and survivor pension, with

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a maximum limit corresponding to 12 times the indexing

of social supports (IAS);

T1 is the expression in years of the number of months of service

provided until December 31, 2005, with the limit

maximum of C ; and

C is the constant number in Annex II;

b) The second, with the designation of P2 , concerning the time of service

later than December 31, 2005, is fixed according to the

articles 29 to 32 of the Decree-Law No. .../2007, de ... de ......, without

minimum or maximum limits, based on the following formula:

RR x T2 x N

where:

RR is the reference remuneration, ascertained from the

higher annual remuneration recorded from

January 1, 2006 corresponding to the time of

service required for, summed up to the registered up to 31 of

December 2005, perdoing the limit of Annex II;

T2 is the annual rate of formation of the given pension of

agreement with Articles 29 to 31 of the Decree-Law

n. .../2007, de ... of ......;

N is the number of calendar years with contributory density

equal to or more than 120 days with pay registration

completed as of January 1, 2006, to,

soms to the years recorded until December 31 of

2005, perdoing the limit of Annex II.

2-The sustainability factor corresponding to the year of the retirement is

fixed, based on the data published annually by the Institute

National of Statistics, in the following terms:

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EMV2006 / EMVanoi-1

where:

EMV2006 is the average life expectancy at 65 years

verified in 2006;

EMVanoi-1 is the average life expectancy at 65 years

verified in the year prior to the retirement.

3-For effect of the provisions of the preceding paragraphs, it shall be deemed to be the year

of the retirement the one in which the fact or act occurs

determinant referred to in Article 43 of the Status of Afpostion.

4-[ Previous Article No 2 ]. "

Article 2.

Determinant act

Articles 39 and 43 of the Retirement Status, approved by the Decree-Law n.

498/72, of December 9, with the drafting of the Decree-Law No. 191-A/79 of 25 of

June, they shall be replaced by the following:

" Article 39.

Voluntary retirement

1-[...].

2-[...].

3-[...].

4-The applicant may not give up his / her application for retirement after

delivered dispatcher to recognize the right to voluntary retirement that

it does not depend on incapacity or verified the facts to be

refer to the points b) a d) of Article 43 (1)

Article 43.

Scheme of the retiming

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1-[...]:

a) Be received by the General Box of Retirees the request for

voluntary retirement that does not depend on verification of

disability;

b) [...];

c) [...];

d) [...].

2-[...].

3-[...]. "

Article 3.

General absolute disability

1-A allocation and calculation of retiree pensions awarded on the grounds of

permanent and absolute disability for all and any profession or work have

the following specialties:

a) A warranty term of 3 years;

b) A minimum value equal to the minimum pension guaranteed in the general scheme of the

social security corresponding to the time of service of Annex I; and

c) Non-application of the sustainability factor until the pensioner reaches the

age of 65 years, time when the pension is changed, through the

multiplication of the value it has on that date by the sustainability factor

corresponding to that year.

2-A amendment provided for in the c) of the preceding paragraph does not apply to pensioners

that, by the date on which they are completed 65 years of age, they have received pension from

Retirement awarded on the grounds of general absolute disability by a

period of more than 20 years.

Article 4.

Reduction of the early retirement pension

1-The value of the early retirement pension, calculated in the general terms, is

reduced by the application of a reduction factor determined by the formula 1- x , in

that x is equal to the overall rate of reduction of the pension value.

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2-A The overall rate of reduction is the product of the monthly rate of 0.5% for the number of months

of early ascertained anticipation between the age of the person concerned at the time of the act

determinant referred to in Article 43 of the Status of Aposentation and the 65-year-old.

3-The number of months of anticipation to be considered for the determination of the overall rate

of reduced pension is reduced by 12 months for each 2-year period that the

effective service time exceeds 40 years.

Article 5.

Amount of the bonified pension

1-Without prejudice to the provisions of paragraph 4, the retirement pension awarded to underwriters

of the General Box of Retirements with the age and time of service of Annex II is

calculated in the general terms and bonified by the application of the factor defined in the

the following number.

2-The bonus factor is determined by the formula 1 + y , in which y is equal to the rate

global de bonification.

3-A global rate of rebate is the product of the monthly rate of Annex III, depending on the

time of service at the time of the determinant act referred to in Article 43 of the

Status of the Aposentation, by the number of months established between the date on which

they have checked the conditions of access to the retirement on the grounds of Article 37 of the

Status of the Act, as amended by Article 3 of Law No 60/2005, of 29 of

December, and that determinant act, with the limit of 70 years.

4-Without prejudice to the provisions of the preceding paragraph, the pension of the underwriters who may

retiring in advance without reduction of pension on the grounds of the article

37.-A of the Status of Aposentation, combined with Article 4 of Law No. 60/2005,

of December 29, and, as of 2015, also with paragraph 3 of the previous article, and

choose not to do so is bonified by the application of the resulting global rate

product of a monthly fee of 0.65% for the number of months ascertained between the date

where the conditions for access to early retirement have been checked without reduction

under that scheme and the date of the determinant act of retirement, up to the limit

of the age of Annex II.

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5-For the purpose of clearance of the bonus rates referred to in the figures

previous, reliefs only the months of effective exercise of later functions to the

entry into force of this Law.

6-The amount of the bonified pension cannot, under any circumstances, be higher

to 90% of the last monthly remuneration of the underwriter.

Article 6.

Update of pensions

1-Pension, retirement and disability pensions are updated annually, the

from the second year following that of its allocation, with effect from day 1 of

January of each year, depending on its amount, in accordance with Annex IV,

in regard to the value of the IAS and the following reference indicators:

a) The real growth of gross domestic product (GDP) corresponding to the average of the

rate of the average annual growth of the last two years, ended in the

third quarter of the year prior to the one to which the update or in the

immediately preceding quarter, if the one is not available at the date of 10

of December;

b) The average variation of the last 12 months of the Consumer Price Index

(IPC), without housing, available on November 30 of the year before that a

reporting the update.

2-For the purposes of the provisions of the preceding paragraph, the annual variation of GDP is the one that

runs between the fourth quarter of one year and the third quarter of the following year.

3-Transitally, in the year 2008, the real GDP growth, provided for in the a)

of paragraph 1, corresponds only to the year ended in the 3 th quarter of the year

previous to the one to which the update is reported.

4-The terms of the update of pensions according to the previous figures are

defined in the porterie of the Minister of Finance.

5-A The application of the rules set out in paragraph 1 shall not prejudice the principle of

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budgetary stability set out in Article 84 of Law No. 91/2001, 20 of

August, amended and Republicated by Law No. 48/2004 of August 24.

6-Pension, retirement and disability pensions fixed on the basis of formula of

calculation prior to the one introduced by this Law upstream of more than 12 times the

IAS are not the subject of updating until their value is exceeded by that

limit.

Article 7.

Safeguarding of rights

1-Pensions that are being abated at the date of entry into force of this Law

do not suffer any reduction in their value.

2-A limitation in the calculation of the first instalment of the pension at 12 times the IAS and the rule of

non-updating of the pensions of higher value than that amount do not apply to the

underwriters or pensioners if, from the application of the rules laid down in paragraph b) of the n.

1 of Article 5 of Law No. 60/2005 of December 29, in which RR is ascertained from

of the remuneration later than 1993 and N considers the whole career

contributor, result value higher than the threshold.

3-A The limitation in the calculation and the sustainability factor introduced by Article 1 of the

present law shall not apply to the pensions assigned to anyone who has already met conditions

for passage to retirement or retirement previously at its entry into force.

4-The provisions of this Law shall not apply to underwriters or pensioners whose

pension rights, guaranteed through pension funds, have been transferred to the

General Box of Retirements, together with the necessary provisions for

support the corresponding charges.

Article 8.

Entry into force

The scheme laid down in this Law shall take effect from the January 1 of

2008, with the following exceptions:

a) The Early Pension Reduction Scheme, which applies from 1 of

January 2015;

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b) The scheme for updating pensions of more than 1.5 IAS and lower or

equal to 6 IAS, which applies as of January 1, 2009;

c) The scheme for updating pensions of more than 6 IAS, which applies

as of January 1, 2011, without prejudice to the provisions of paragraph 6 of the article

5.

Seen and approved in Council of Ministers of March 22, 2007

The Prime Minister

The Minister of the Presidency

The Minister of Parliamentary Affairs

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Annex I

[referred to in para. b) of Article 3 (1))

Year service time

(years)

2008 and 2009 15 a 20 years

2010 and 2011 21 a 30 years

From 2012 to 40 years

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Annex II

[referred to in Article 5 (1)]

Year Age Time of service

2008 to 61 years and 6 months 36 years

2009 to 62 years 36 years

2010 to 62 years and 6 months 36 years

2011 to 63 years 36 years

2012 to 63 years and 6 months 36 years

2013 to 64 years 36 years

2014 to 64 years and 6 months 36 years

From 2015 to 65 years 15 years

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Annex III

[referred to in Article 5 (3)]

Time of service

(in years)

Monthly bonus rate

(percentage)

15 a 24 0.33

25 a 34 0.50

35 a 39 0.65

Higher than 39 to 1.00

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Annex IV

[referred to in Article 6 (1)]

Value of pension

<= 1.5 IAS> 1.5 IAS and

<= 6 IAS> 6 IAS

C re

sc im

en to

r ea

l d the P

IB

<2% IPC-0.5% IPC-0.75%

=> 2% and

<3%

IPC + 20% of the

growth

real GDP

(minimum IPC +

0.5%)

CPI IPC-0.25%

=> 3%

IPC + 20% of the

growth

real GDP

IPC + 12.5% of the

growth

real GDP

IPC