Draft Resolution No. 508 /X

" Recommends the Government to take into account the evolution of the CPI-

Index of Consumer Prices in exceptional years for

ensure that the IAS-Indexing of Social Supports does not evolve from

negative form "

Exhibition of reasons

I-The crisis of the previous model of updating social supports, according to the

election calendar.

The updating of pensions and the remaining social supports in relation to the

discretion of governance and even electoral calendars was, over the course of the

years, the factor that the greatest relevance had in the definition of the benchmarks of

update on pensions enacted in the history of Portuguese Social Security.

This reality has led to significant distortions in the evolution of nominal value

of the pensions, if we take into account the evolution of the Price Index in the

Consumer-IPC.

Also by that fact, and as a result of the total failure to predict the

future evolution of pensions, has led to serious sustainability problems of the

public pension system.

On the other hand, by staying the guaranteed monthly minimum consideration as

referential determinant of the fixation, calculation and updating of social supports of the

State and, as well, of any other expenses and revenue by this accomplished

or charged, fed up for years and years, a vicious circle that,

simultaneously, did not allow the improvement of the conditions of operation of the

labour market and that the RMMG cumprisse its role as a regulator of the

labour relations, as well as conditioned the evolution of social supports of the

State to exogenous criteria to the system and the evolution of the economy.

II-The creation of the IAS-Indexing of the Social Apoios as a referential of

update of all social benefits

In the Programme of the XVII Constitutional Government was assumed the need for

proceed to the profound alteration of this reality through the creation of a new

indexing of fixation, calculation and updating of those expenses and revenues, with

Autonomous and previously determined rules of definition and updating.

This change was, too, the subject of negotiation and agreement established between the

Government and the social partners, at the headquarters of the Standing Committee on Concertation

Social, in the frame of the discussion there concluded around the Security Reform

Social.

In that sense, the Government submitted to the Assembly of the Republic a Proposal to

Law, to which it was passed, giving rise to the 53-B/2006 Act of December 29, which

created the Indexing of Social Supports (IAS) by fixing the rules of its updating and

of pensions and other benefits assigned by the social security system.

Portugal has thus left to be one of the last countries without clear mechanisms

established for the updating of pensions.

Under the said Act, the base value of the IAS corresponded to the value of the RMMG

in force in the year 2006, updated by the consumer price index (CPI)

without housing, corresponding to the average variation of the last twelve months,

available at the date of November 30, 2006.

When taking by initial reference the value of the gross monthly minimum consideration, the

fixed indexing percentages did not entail any decrease in value

of existing social benefits

In addition, they have defined themselves which objective indicators from which to

proceeds to the future, annual update of the IAS, to be aware:

• the real growth of Gross Domestic Product (GDP);

• the average variation of the last 12 months of the Consumer Price Index

(IPC), without housing, available on November 30 of the year prior to what

reports the update.

In defining this objective framework of updating, having as a benchmark the Index

of Consumer Prices (known and unestimated), and with modulations of

agreement with the recent evolution of determinant variables for the revenues of the

Social Security, notably the evolution of the Portuguese economy, has had on

tells of its impact on the sustainability of the social security system, but

also, secured the remake and even gain of purchasing power for the

average and low pensions. For the highest amount pensions, the

maintenance of purchasing power has been guaranteed whenever they check

favorable conditions from the point of view of economic growth.

III-Effects resulting from the referential change

The establishment of the IAS and the setting of the rules of its updating and of pensions and

other benefits allocated by the social security system, had very much impacts

significant in Portuguese society.

Since soon because it allowed the celebration, on December 5, 2006, among the

Social Partners and the Government, of the Agreement on the fixation and evolution of RMMG that

allowed a significant real increase in RMMG. Currently, and as a result

of this agreement, RMMG is set at 450, and has been the subject of the largest

updates of the last decades.

This increase, unique in recent history, allowed to raise the retribution of wages

lower, credibilizing and viabilizing the evolution of the RMMG itself, and

contributed to the affirmation of social dialogue as a reference space of

construction of solutions for Portuguese society.

Without the establishment of the IAS and the consequent disindexation of social benefits to the

RMMG, it would be impossible to achieve the recent RMMG valorisation levels. With

injury to workers, not least all of how many earn low wages,

equal or close to the RMMG.

IV-Impacts of an especially low IPC scenario

The new update rule established by the IAS Act, in line with the increase

of the cost of living, with the real growth of national wealth and having in view a

harmonization with the budget cycle should, in any case, be reassessed

periodically, depending on their suitability for the proposed objectives (defence of the

power to purchase the pensions and financial sustainability of social security).

This has even been predicted in the IAS Act, as a way of acauteling its effectiveness and the

its objectives to the evolution of the economic conjuncture and economic environment, at a time in

that it was unpredictable the global economic and financial crisis that lives on

currently and, as a result of this unfavourable economic environment, scenarios of

zero or even negative growth of inflation.

In the current economic context, it becomes necessary to adopt a prudent position

as for the future, acauteling, in all manner, a hypothetical reduction scenario

of pensions and too much social benefits, as a result of the simple application of the

update mechanisms enrolled in the IAS Act

V-What moves us

In this sense, the Parliamentary Group of the Socialist Party considers it premature to

approval of amendments to the IAS Act that anticipates scenarios of evolution of the

economic environment until the end of the year, which reveal themselves totally unpredictable.

On the contrary, in the senda of the assumptions that led the Government and this

Assembly to approve a clear and transparent regime of fixation, calculation and

update on State expenditure and revenue, such as the IAS, considers to be the duty of the

Assembly of the Republic to direct a Recommendation to the Government in the sense of, in the

context of the normal schedule of updating pensions for 2010, equating

the evolution of the indicators that serve as a reference to its updating and

submit a proposal compatible with its evolution.

Thus, the Assembly of the Republic resolves, in the constitutional terms and

regimental applicable, recommend to the Government that:

1) Follow the evolution of the Consumer Price Index-CPI,

particularly the value that is estimated to be able to correspond to the average variation of the

last 12 months, with reference to November 30, 2009;

2) Follow the real Gross Domestic Product Growth Index regarding the

year ended in the third quarter of 2009;

3) In the face of the setting of these IAS update parameters, evaluate the

amendments to the 53-B/2006 Act of December 29, which are considered

opportune with a view to ensuring that pensions and too much social benefits

indexed to the IAS do not suffer a nominal reduction in 2010, and may even

undergo positive nominal update, and taking into account the principle of solidarity

and positive decrimination, protecting more who needs and reinforcing more

So the purchasing power, combating crisis and very low or negative inflation.

Assembly of the Republic, June 17, 2009.

The Deputies,