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Establishes Mechanisms For Convergence Of Social Protection Scheme In The Civil Service With The General Social Security Scheme, The Fourth Amendment To Law No. 60/2005, Of 29 December, The Third Amendment To Decree-Law No. 503/99, Of 20 November

Original Language Title: Estabelece mecanismos de convergência do regime de proteção social da função pública com o regime geral da segurança social, procedendo à quarta alteração à Lei n.º 60/2005, de 29 de dezembro, à terceira alteração ao Decreto-Lei n.º 503/99, de 20 de novem

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CHAIR OF THE COUNCIL OF MINISTERS

Proposal for Law No. 171 /XII/2.

1

PL 316/2013

2013.09.12

Exhibition of Motives

1. Economic Framework

For decades Portugal has lived with levels of unsustainable public deficits. Since 1974,

the Country has seen itself compelled to apply for foreign aid on three occasions by emergency situation

financial.

The last ransom demand took place in the context of the crisis of the sovereign debts of the area of the

euro. The rules for participation in the euro have been identified from the beginning, but the

necessary adjustment was permanently deferred and the rules were not effectively

applied. After the global financial crisis, the imbalances of the Member States more

vulnerable accentuated and the fragilities of the construction of the single currency were exposed.

The euro area countries were forced to adjust abruptly. Portugal had a

of the biggest challenges ahead. Since the mid-90, it has benefited from the conditions

more favorable financial, but deferred the fulfillment of their responsibilities while

participant in the euro area. The limit of 3% of Gross Domestic Product (GDP) for the deficit

budget has never been met, resulting in very high levels of public debt.

More still, excessive borrowing has not been restricted to the public sector: also the

households and companies have accumulated debt and also Portugal has accumulated a high debt

face to the outside. This behaviour has resulted in economic stagnation, increase in

unemployment and loss of competitiveness.

CHAIR OF THE COUNCIL OF MINISTERS

Proposal for Law No. 171 /XII/2.

2

In 2009-2010, the budget expansion policy came to amplify these problems

structural, which were already evident. Once again, public spending has increased to

respond to problems of the immediate, without considering the consequences on sustainability

of the public debt and the stability of the financial system. Budget deficits were

successively reviewed and approximate the double digits, putting Portugal in a

situation of great vulnerability, at a time of high tension in Europe. The

lenders began to doubt Portugal's ability to pay off debt and the state had

increasingly difficult to finance themselves in the market. In April 2011, the bancarroute was

imminent. The lack of money to pay salaries, pensions and ensure the functions of the state

as a whole was a real threat. The call for international aid was uncircumvable and the

adjustment proved unavoidable, notably in the face of conditionality associated with

official funding.

The Economic and Financial Adjustment Program (PAEF) provides for an acting in three

fronts: fiscal consolidation and the placement of public finances on a trajectory

sustainable; reducing the levels of indebtedness and recovery of financial stability;

structural transformation directed at increased competitiveness, promotion of the

sustained economic growth and job creation. It is thus addressed to the main

challenges of the Portuguese economy. More still, official loans allow to protect the

financing of the economy from the pressures of the markets. In this way, Portugal has time

to adjust gradually and to gain credibility and trust at the international level.

If this protection did not exist, the adjustment would have to occur in any way, but it would be

even more abrupt.

CHAIR OF THE COUNCIL OF MINISTERS

Proposal for Law No. 171 /XII/2.

3

The accumulation of chronic deficits of our public accounts is due to insufficiency

of the revenue to cover the costs of the state. Thus, a structural response is required,

there are two possible solutions: either if they increase the revenues or if it reduces the expense. The

increase in revenue is a pathway that, admittedly, has more protracted impacts

on economic activity and causes periods of low growth and unemployment.

Additionally, the level of taxation achieved in Portugal is already very high. Of agreement

with estimates from the European Commission, between 2010 and 2013, Portugal records the second

greater addition of the tax burden in the European Union (EU), after France, with an extra

of 2.3% of GDP (1.9% for the euro area average and 1.7% for the EU), essentially via

direct taxes that registered an addition of 2.2%. (1.2% in the euro area and 0.9% in the

EU). A further increase in taxes would have excessive economic and social costs

of behaving.

At the same time, Portugal presents a disproportionate level of public spending in the face of

to their wealth: in 2013, total public expenditure (48.6% of GDP) will be close to the average of the

EU (49.2% of GDP), but the wealth produced per capita will be only 60% of the average

european (€ 15 to 600.00 in Portugal and € 25 to 700.00 in the EU). Portugal has today a level of

excessive expenditure that, as they prove persistent deficits, fails to finance. The

creation of future sustainability bases of public finances passes like this

necessarily by a lower expense level than the current one. As advocated in the

PAEF, the way of reducing the expense is the solution that allows to reach, simultaneously, three

objectives: to comply with the international commitments to reduce the budget deficit;

minimise the costs to be borne by the economy and create the conditions of sustainability

future of public finances and the pension system. It was in this framework that Portugal if

committed to a significant expense reduction in the coming years. The reform of the

State by the track of the permanent reduction of expenditure is a key pillar of the

budgetary adjustment to be made.

CHAIR OF THE COUNCIL OF MINISTERS

Proposal for Law No. 171 /XII/2.

4

In this connection, it matters to have present the structure of Portuguese public expenditure, in

particular the fact that approximately 70% of the total spending is applied in expenditure

with staff and social benefits. It becomes thus clear that a reduction of the expense to

levels compatible with the wealth of the Country inevitably have to affect these areas. This

reality does not invalidate substantial reductions in areas with lower weight. In effect, the

reduction of state operating expenses is a priority that has been followed up

year after year, as shown by the expenditure on intermediate consumes in 2012. However,

too severe a reduction in these expenditts may cause the operation of the

essential services to populations. A public expenditure reduction program must, by

this, be balanced and develop on several fronts simultaneously.

For this reason, the Government has decided to frame the expenditure reduction effort in a

broader program of state reform. It was chosen as a strategic principle

advisor the pursuit of equity goals:

1. Equity between workers in the public and private sector;

2. Equity between generations;

3. Equity between public services and private actors.

Thus, three integrated acting fronts arise: expenditure on staff, social benefits

and setorial measures. Only the acting simultaneously in these three vectors offers guarantees of

a sustained reduction in the levels of public spending. Only then will it be possible to adapt the

services and benefits of the state to what the population wants and has the capacity to pay.

CHAIR OF THE COUNCIL OF MINISTERS

Proposal for Law No. 171 /XII/2.

5

Compliance with the PAEF requirements has already given visible results, not only in terms

of international credibility, as also in terms of the recovery of activity

internal economic. After 10 consecutive quarters of contraction in economic activity,

in the 2 th quarter of 2013, the GDP grew in real terms 1.1% in the face of the previous quarter.

For this has contributed a less sharp break down of Private Consumer and Investment,

retaining the positive contribution of Net External Search. The generality of data

more recent, whether qualitative or quantitative, suggests the continuation of an evolution

favorable economic activity in the 3 th quarter of this year. This recovery of the activity

economic, still mild, matters to be strengthened and sustained so as to safeguard the

correction of structural imbalances.

Also the ratio of government debt as a percentage of GDP is denoting yet a

increasing trend (reaching the 118.4% net of deposits of the Central Administration),

as the correction of the budget deficits already observed is still insufficient for

invert the trajectory of public debt.

In a scenario of very moderate economic growth in the medium term, the reduction of

net borrowing of the economy, and of the Public Administrations in particular, is only

possible through the accumulation of current account surpluses and capital and balances

positive primary budget, respectively. This means that the effort of

adjustment that the Portuguese economy has been carrying out has to be sustained in the

time, with high private and public savings rates that allow to finance the

investment, growth engine.

CHAIR OF THE COUNCIL OF MINISTERS

Proposal for Law No. 171 /XII/2.

6

Also to ensure the financing of the economy in a stable and regular manner after the exit

of PAEF is crucial for this growth. In 2014, funding in the framework of the

Program accounts for about half of the total funding needs of the

State and the remainder is to be secured under market conditions. Only

pursuing the adjustment effort credibly and sustaining, could Portugal

get the necessary funding in these conditions.

From the point of view of public accounts, as already mentioned, the correction should be made

essentially through permanent reductions in public spending. It is important to highlight

that the implementation of the measures of the State reform was a condition for the approval of the

extension of maturities of the loans granted to Portugal by the EU. The pursuit

of these objectives and the implementation of the agreed measures will continue to be a condition for the

our partners continue to support Portugal, as they have done so far. Incidentally, hesitations

in this field, as shown by other countries in adjustment, show that the

consequences in the short term are much worse. It is therefore a determinant that Portugal take

the necessary and indispensable measures to ensure the sustainability of your finances

public and the pension system.

Public finance crises have a gravy economic and financial impact, obliging

to taking measures that inevitably have as cost a break down of activity and a

increase in unemployment, with the inherent social costs. It is therefore imperative to take

measures to prevent the repetition of these episodes for Portuguese society. The prevention

of the budgetary crises requires as soon as they develop robust budgetary rules, such as

the ones advocated in the Budget Framework Act, which transposes to the planning

legal national the European commitments made by Portugal in the sense of

maintenance of financial discipline. This Act provides for the principle of sustainability,

according to which the budgetary rules should apply to all subsectors of the

Public administrations, understanding for sustainability the ability to finance

all commitments, assumed or to take up, with respect to the rule of the balance

structural budget and the limit of public debt, as provided for in that Act and in the

European legislation.

CHAIR OF THE COUNCIL OF MINISTERS

Proposal for Law No. 171 /XII/2.

7

Portugal is subject to the rules of budgetary discipline of the Stability Pact and

Growth, provided for in the Treaty on the Functioning of the European Union and revised in the

Regulation (EU) No 1175/2011, of the European Parliament and of the Council, of 16 of

november 2011, amending Regulation (EC) No 1466/97 on the reinforcement of the

supervision of budgetary situations and supervision and coordination of policies

economic. This Regulation elects as a medium-term budgetary objective a balance

balanced or surplus, with, in the case of Portugal, this midterm goal

corresponds to a structural budget balance of not less than -0.5% of GDP.

On March 2, 2012, Portugal, together with 24 other Member States, signed the

Treaty on Stability, Coordination and Governance in the Economic and Monetary Union,

recognizing expressly that the need for governments to maintain finances

sound and sustainable public and to avoid excessive budget deficits is determinant

to preserve the stability of the whole euro area and, consequently, requires the

introduction of specific rules, including a budget balance rule and a

automatic mechanism for the adoption of corrective measures. Additionally, when the

relation between public debt and GDP exceeds the reference value of 60%, as succeeding

also in Portugal, that excess value (which runs presently the 60 points

percentage), should be reduced to an average rate of one twentieth per year as a standard of

reference.

The entry into force of two new European regulations in May 2013 came to strengthen

monitoring procedures for the participating Member States of the area of

euro at two levels: i) the definition of monitoring and evaluation mechanisms of the

budget programmes and correction of excessive deficit situations, complementing the

provisions of the Stability and Growth Pact; and ii) the reinforcement of supervision

budgetary and economic in situation or risk of financial instability. This means that,

in the current context, not only the provisions of correction of budgetary imbalances if

have been strengthened, as also, and above all, the provisions in the strand of

monitoring and prevention of new imbalances are found to be significantly

heightened.

CHAIR OF THE COUNCIL OF MINISTERS

Proposal for Law No. 171 /XII/2.

8

2. The sustainability of the public pension system

Historically coexist in Portugal two major social protection regimes in matter

of pensions in the eventualities of old age, invalidity and death: on the one hand, the system

previdential of the general social security regime, intended for the generality of the

workers in the private sector and public sector workers with legal relationship of

private employment; and, on the other hand, the regime of the General Box of Retirements (Box),

currently designated as a convergent social protection regime, intended for employees

public and administrative agents, currently workers in public functions.

Both regimes are, in essence, public, as they have been instituted, are managed and

guaranteed financially by the state, they fall into the 1 th pillar of social protection, this

is, they ensure the degree of protection with substitutive benefits of labour income,

and have a legal nature, given that their configuration is shaped unilateral and imperatively

by the legislator, amusement of what succeeding in the supplementary schemes and in the savings

individual, who have a conventional or contractual source.

Both the previdential system of the general regime and the social protection regime

convergent are managed in apportionment system, which means that pensions in

payment are supported by the current contributions of the workers and employers and,

when these reveal themselves insufficient, which admits that it should only occur in

conjunctural situations, by a contribution of the State, arising from taxes and, in

contexts of fiscal imbalance, by recourse to indebtedness.

This model of funding, which does not ensure the coverage of the responsibilities of the

rights in formation through the constitution of provisions, as succeeding in the regimes

managed in system of capitalization, underlies a principle of solidarity between

generations, assuming that the generation in the asset supports the payment of the pensions of the generation

retirees or retired.

CHAIR OF THE COUNCIL OF MINISTERS

Proposal for Law No. 171 /XII/2.

9

The sustainability of this model, in which no one funds with its contributory effort

your own pension, depends on the evolution, by uncertain nature, when designed the long

deadline, of various factors, from the logo of the will to maintain the regime's configuration in the

future, but fundamentally of the ability of the neighboring generations to assume the

charges with the pensions of previous generations taxpayers.

In effect, the long-term sustainability of a public pension scheme rested, by a

side, in the social and political realization of the community that it is materially fair, by

observe elementary imperfections of proportional equality among the various groups of

citizens, and equitable, by proportionally distributing the benefits and burdens between

all users of the pension scheme, and that, as such, it should continue to exist in the

same molds, and, on the other hand, in its capacity for self-financing, without prejudice

of the supply by the State of conjunctural financial imbalances, with recourse to other

sources of revenue, located at a later time to the pension system.

The latter situation should, however, be biased marginal and temporary. In the

true, a pension system based on a logic of apportionment shall, throughout its

life, evolve in the sense of seeking to ensure its financial sustainability in a way

permanent, approaching at all time the value of the contributions it receives from the value

of the benefits it pays.

2.1. Proportional equality

The Cash regime is a special pension scheme, ainjurling its fairness and justice

material relative necessarily by the comparison of its carateristics with the

contemporaries defined by the same legislator for the general regime, intended

tendentially to all workers who do not integrate that first regime, and by the

verification whether the differences of conditions find reasonable and sufficient justification.

CHAIR OF THE COUNCIL OF MINISTERS

Proposal for Law No. 171 /XII/2.

10

To the extent that they are in cause of lifetime benefits, which are paid for a period

very extended temporal, the comparison between regimes has to be done in a perspetive

historical, at least equivalent to the time it is today established as

corresponding to a full career, that is, the maximum service time that can

reliefs on pension, as there remain in actuality pensions fixed with conditions and formulas

of calculation that have vigored in all of that period.

Thus, if we retreat 40 years, until 1973, we check that in the Box for the generality of the

subscribers of this institution-for within the Box itself always coexisted with the

"general" regime of the Status of Posting Numerous more favorable special regimes in

various fields, such as the conditions of retirement or retirement and the rules of calculation and

or of updating the pension-, the maximum pension, equal to the last monthly remuneration of the

employee deducted from the percentage of the quota for the Box, required 60 years of age and 40

years of service.

At the same time, between 1963 and mid-1983, the maximum pension to which taxpayers

of the general scheme could get corresponded to 80% of the base salary, depending on that pension

from 65 years of age and 40 years of work.

Between the middle of 1977 and the end of 2003, the generality of the subscriptioners of the Inbox subscribed

by August 31, 1993 he passed on to be able to retire with a pension equal to the last

illiquid quota remuneration, that is, to receive a higher pension in 10% à

remuneration that would earn if they continued to work, basing for such counting 60 years of

age and 36 years of service.

In practice, however, on the grounds of the Decree-Law No. 116/85 of April 19, during

nearly two decades, between 1985 and 2003, only 36 years of service were required, which

allowed early retirement without penalties and with pension corresponding to 100%

of the ill-fated remuneration to entire generations of employees under 60 years of

age, in many cases with rather less than this age, given the additions of

service time that allowed to quickly reach the service time corresponding to the

full career.

CHAIR OF THE COUNCIL OF MINISTERS

Proposal for Law No. 171 /XII/2.

11

In the same period, the taxpayers of the general social security scheme with 40 years of

service and 65 years of age could receive, at most, 80% of the reference remuneration,

remuneration this one that corresponded, between mid-1983 and the end of 1993, to the monthly average

of all unrevalued career compensation and, between 1994 and the end of 2001, to the

average monthly remunerative of the calendar years with higher reprized remunerations

of the last 15 years of career.

In 2004 and 2005, the pension of the generality of the underwriters of the Cash returned to correspond

to the last monthly net share of quota for retirement and survivor pension,

that is, to equate to 90% of that remuneration, by maintaining the 60-year requirements of

age and 36 years of service, but passing the early retirement to be penalized in

4.5% for each year or fray in missing the underwriter to reach the age of 60.

Since 2006, the retirement of the generality of the underwriters of the Cash has gone on to demand

conditions in age and time of service in gradual convergence to the

established in the general scheme, convergence completed already in 2013, and the pension of the enrolled

by August 31, 1993 passed the result of the sum of two plots, one ascertained with the

rules of the adapted Affiliation Status, regarding time of service up to 31 of

december 2005, and the other calculated in accordance with the rules of the general regime, concerning the

later service time.

In the general social security regime, between 2002 and mid-2007, to taxpayers

enrolled until December 31, 2001 has secured the highest pension of three formulas

alternatives:

a) The old one, which had as a maximum limit 80% of the monthly remunerative average of the

10 calendar years with the highest pay of the last 15 years of career;

b) The new one, which had an annual rate of formation of the variable pension and which ascertained the

reference remuneration from the monthly average of the remunerations of the whole

reprized career; and

CHAIR OF THE COUNCIL OF MINISTERS

Proposal for Law No. 171 /XII/2.

12

c) The proportional, which attributed the pension values first determined of

agreement with the previous formulas in the proportion of the service time provided

up to 2001 (value resulting from the old formula) to be divided by the total career time

and of the service time provided from 2002 onwards (value resulting from the formula

new) also to be divided by the total career time;

whereas the taxpayers enrolled after 2001 only were entitled to the formula

new.

In the general regime of social security, since mid-2007, taxpayers have passed the

be divided into three groups:

a) Those enrolled until 2001 who are to retire by 2016, who are entitled to the

best of two formulas: the new and the proportional, being that at this last the limit

relevant time for allocation of the old pension and the new pension is situated in

2006 and 2007;

b) Those enrolled until 2001 who are to retire after 2016, who are entitled to

best of two formulas: the new and the proportional, being that at this last the limit

relevant time for allocation of the old pension and the new pension is situated in

2001 and 2002; and

c) Those enrolled after 2001, who continued to be entitled only to the new formula.

Thus, it has to be concluded to have existed, over time, an important disparity

between the Cash regime and the general social security regime, in any case always

greater than 10% of the monthly value of pensions, this even by scoring:

a) The most favorable special schemes within the Box itself, which covered a

very substantial part of its universe of underwriters, greater than one-third of the

total;

CHAIR OF THE COUNCIL OF MINISTERS

Proposal for Law No. 171 /XII/2.

13

b) The excecional conditions of retirement or retirement, which shortened the career

contributor in several years-more than five, for entire generations of pensioners

of the Box-and widened to the same extent the duration of the pension.

This is even confirmed by numerous simulations carried out with type situations

representative of large part of the total retirement universe of the Box, whose pensions,

if calculated according to each of the regimes successively in force in the regime of

converged social protection applied by the Box in 2000, 2005 and 2010, present,

relatively to the result of the historically more favorable formula of the general regime of

social security, which vigored between 1993 and 2001, a difference, for more, of at least

10% (the difference, in some cases, is even substantially higher than that, arriving

even to surpass the 30%).

That disparity, as you referred to, has always existed in the scope of the Box itself. By

one side, the subscriptors entered until August 31, 1993 maintained the rules of calculation

of the Status of Retirement, While Those Enrolled subsequently were applied for

rules of the general regime of social security. On the other hand, many of the underwriters

belonging to that first group benefit, or have benefited in the past, from regimes

special more advantageous than the one set out in the said Statute, finding

some of these schemes referred to in Decree-Law No. 229/2005 of December 29. The

said disparity results also from the different rate of pension formation and, above all,

of the way to determine the reference remuneration to which that fee applies.

In effect, it is very different to consider last remunerations or old remunerations

revalued, as the former are generally the highest of the entire career, by

correspond to the highest category or job title played by the underwriter,

considering the typical situation of gradual ascension in the career, profile that is, too, with

rare exceptions, that of the taxpayers of the general social security scheme.

CHAIR OF THE COUNCIL OF MINISTERS

Proposal for Law No. 171 /XII/2.

14

To this conclusion does not preclude even the existing rule in the general regime of social security, in

matter of contributory density, which is sufficient with 120 days of contributions per calendar year

to account for a full year, as it releases only in seat of rate of

formation of the pension, not affecting the reference remuneration considered in the calculation of the

pension.

The current formula for calculating the pension of Law No. 60/2005 of December 29, despite

represent an important development with respect to the initial formula of the Statute of the

Retiming, presents, still, concretely with respect to the share of the relative pension

to the time of service prior to 2006, which is ascertained from the old formula of the Statute

of the adapted Aposentation, a disparity with that of the general social security regime.

That disparity is already dampened but still far from being completely eliminated, a

time that the clearance of reference remuneration in the general scheme from an average

of perceived remunerations in a very extended period substantially reduces the value

of this and thus indirectly from the replacement rate itself, translated by the percentage of

coverage of the last remuneration earned by the first pension obtained.

2.2. Equity

Solidarity between generations cannot fail to be bidirectional, from active workers

to with pensioners, but equally from these to those, not being able to

reasonably demand for the first a disproportionate effort for what are the

its capabilities and for what will predictably be the benefits that will reap the

future of the system, this even admitting that the new rules will not be also target

of change in an unfavorable sense in the future.

Adding that there is also a huge disproportion between what is the level of

Pensions of the Box and the contributory effort carried out by its beneficiaries, which, recalls-

if, they contributed to retirement and survivor's pension with a percentage of their

remuneration from 7% until 1984, from 8% between 1985 and 1993, from 10% between 1994 and 2010 and from

11% since 2011.

CHAIR OF THE COUNCIL OF MINISTERS

Proposal for Law No. 171 /XII/2.

15

That reality is unambiguously proven by a simple theoretical exercise with the

following assumptions, grossly generous:

a) Shares discounted by the worker during a full career of 36 years;

b) Employer's constant contribution of 23.75% during the same period

(it is noted that in the general social security regime, based on the disaggregation of the

global contributory rate for the eventualities old age, disability and death-those

Box assures-, would compete for employers a lower real rate, from only

16.4%);

c) Capitalization, together with the interest successively generated by that capital, das

shares of the underwriter and employer's contributions at a net rate of 4%

to the year (technical rate accepted in the actuarial studies);

d) Channeling of the totality of the accumulated capital (including the part concerning the

quotas and contributions to survivor's pension) to finance

exclusively the retirement pension;

of which it results that the funding thus generated would only give to pay for the pensions of the

underwriter for about nine years, when a retiree receives, on average, pension

for 18.1 years and then still leaves to the heirs a survivor's pension of about

of half of the retirement pension.

From this exercise it also results evident not to have any adherence to reality the idea that

it would be the fact that the employers of the underwriters of the Box did not contribute

historically with a percentage of the remunerations of its equivalent employees

to the existing in the general scheme to be responsible for the structural imbalance of the regime of

converged social protection.

CHAIR OF THE COUNCIL OF MINISTERS

Proposal for Law No. 171 /XII/2.

16

2.3. Self-financing

The Cash regime suffers from a structural financial imbalance that is attributable to the

conjugation of multiple factors:

Legislative Policy Ones, related to:

a) The proliferation of special regimes, some of them in which the expectable time of

payment of the pension arrives to overcome, several times, the contributory career;

b) The restrictions on the admission of new workers in the Public Administration and the

remunerative policy measures that have been being adopted in recent years;

c) Convergence measures, such as the closure of the Cash regime to new underwriters-

although this one is responsible, at most, for only about 400 million a

current annual deficit of 4.36 thousand million (estimated total deficit of the Box for the

Current year 2013, which will have to be covered by Budget transfers

General of the State).

Others of a demographic nature, such as:

a) The ageing of the population of underwriters, which reflects the ripening of the

regimen;

b) The increase in average life expectancy.

Others still of an economic-financial nature, such as the wage reduction that affects the

generality of the underwriters of the Box and which leads to a decline in contributions.

In 20 years of convergence, from 1993 a to 2013, and despite the important structural measures

realized, the cost with pensions rose from 1,681 million to 9,253 million

euro (2013), the same is to say from 2.31% to a value of never less than 5.5% of GDP,

passing the number of retirees and retirees from about 203,000 to more than 468,000

and the average pension from € 538.42 to € 1 282.58.

CHAIR OF THE COUNCIL OF MINISTERS

Proposal for Law No. 171 /XII/2.

17

In the same period, the annual financing needs of the Box from the

State budget has gone up from 765 billion, at a time when only the

local authorities and the autonomous regions contributed as employers and with only

8% of the wage mass, to 4.36 billion euros, when all employers

contribute with 20% of the wage mass, and the active / retired underwriters ratio has declined

dangerously from 3.56 to 1.13.

The level of self-financing of benefits paid by the Cashier (retiming pensions and

survival assigned) by contributions received from workers and entities

employing public stands, in 2013, just above 40%, the rest being almost

60% (more than triple the actual contributory rate of the employer in the general security regime

social for the eventualities old age, disability and death) covered by transfers from the

Budget of the State, i.e. by taxes or by recourse to indebtedness.

Even admitting that all new employees recruited by the Public Administration

since the closure of the Cash regime on January 1, 2006 had been, still, enrolled in the

Box (admitting 100,000 new workers, for excess), in 2013, year in which all

the employers contribute already with 20% of the salary mass of their staff, the capacity of

self-financing of the social protection regime secured by the Cashier would only know

an addition of about 400 million euros, which would keep it still at a lower level

50%.

The predictable evolution of the critical factors for structural financial sustainability of the

Box points in the direction of continued degradation of the situation, at a time when

structural fiscal imbalances of the State, related international linkagings

with these same imbalances and the economic situation of the Country do not allow to continue,

as up to here, to annually increase the value of the contribution to the Box. The annual deficit

of the Box will amount to 2.6% of GDP, with increasing trend, situation that appears

unsustainable, for the reasons exposed in 1 ..

CHAIR OF THE COUNCIL OF MINISTERS

Proposal for Law No. 171 /XII/2.

18

3. Convergence

The question of whether the disparity signaled in 2.1. -which initially discriminated against

positively civil servants in the face of private sector workers, then

public servants in the face of private sector and public sector workers with relationship

private employment legal and, more recently, public servants admitted until 31

from August 1993 in the face of all remaining workers and staff-respects

basic principles of proportional equality, that is, whether it has substantive foundation

enough, it was being repeatedly answered negatively by the legislator, who since the

first half of the 80's come by imposing the convergence of regimes.

The convergence of regimes, the better, the convergence of the Cash regime to the general regime

of social security, without any guarantee of safeguarding discriminatory situations, is

a principle long stated in the legal order in its own headquarters, specifically in the

more important legislative instruments in the field of pensions, such as balizing

expectations and signalling a sense of the future evolution of the Cash pension system.

In fact, the convergence between the two public pension schemes appears in the laws of

foundations of social security some three decades ago, initially having as a horizon to

creation of a new single regime, different from those two, most recently with the

objective stated to apply to the users of the Box the rules of the general regime.

3.1. Levels

Of the three theoretically possible levels of convergence:

a) Amendment of the rules only for future underwriters (1. level);

b) Changing the rules for future underwriters and for current

underwriters / future beneficiaries (2. level); and

c) Amendment of the rules for future underwriters, for current

underwriters / future beneficiaries and for current beneficiaries (3. level);

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Proposal for Law No. 171 /XII/2.

19

was initially chosen the first, which seemed to respond appropriately to the

principles of proportional equality and equity, which constituted at the time the

main concern, so much so that they continued to multiply, for the

subscribers entered until August 31, 1993, the exception schemes, some only

eliminated with the Decree-Law No. 229/2005 of December 29.

In 1993, public debt was 54.6% of GDP, and it was in this context that, in that year,

it was decided to go on to apply to the new civil servants, that is, to those who were

admitted as of September 1, 1993, the rules for calculating the pension of the general scheme

of social security (the same figurine would come to be adopted in the reform of the general regime of

2002).

On that occasion, the underwriters of the Cashier enrolled until August 31, 1993 was allowed

the maintenance of the regime of which they historically benefited, however, may not, however,

option of the legislator to interpret itself as the guarantee of the future immutability of the rules that

they were applicable to them, for that one of the matrix carateries of the Cashier's regime, inscribed

in Article 43 of the Status of Representation, it was that the legal regime and the de facto situation

considering in the retirement was the one to check on the date of the propping up of the dispatch that

recognize the right and fix the value of the pension.

The decision, temporally dated, to impute the burden of adjustment in exclusive to whom

had not yet entered into the system, early revealed limitations, when the imbalance

structural of the Cash regime and the situation of public finances have changed substantially

the circumstances in which it had been taken.

As of 2000, GDP stagnated, registering up to 2007 percent average growth of 1.1% percent, and the

public debt increased from 50.7% to 68.3% of GDP between 2000 and 2007.

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Proposal for Law No. 171 /XII/2.

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It was decided, then, in the face of the new context-that it put financial sustainability

on the same level of importance with equality and equity as driving forces of the

convergence effort-, call out the underwriters of the Box that are not yet reuned

conditions to benefit from the rights enshrined in its regime to participate in the effort of

rebalancing the system (the same figurine would come to be adopted in the reform of the general regime of

2007), what succeeded, for several times, with governments sustained by different

majorities and political parties, between 2004 and 2013, stands out:

2004 The reduction of the pension from the Box from 100% to 90% of the last remuneration

monthly of the underwriter, thus eliminating the incomprehensible situation of the employee

retired to receive more of a pension than they have realized of salary;

2006 On:

a) The closure of the Cashier's regime, which is no more than able to enroll new underwriters,

being the new civil servants, hired as of January 1 from

2006, compulsorily enrolled in the general social security scheme;

b) The gradual convergence of the general regime of the Box to the general regime in matter

of conditions of retirement-from 60 to 65 years, at the pace of six months per year

-and of service time corresponding to a full career-from 36 to 40

years, also at the pace of six months per year;

c) The elimination or adaptation of several dozen special retiming schemes and

of reform of the Box, more favorable than the regime of the Statute of the

Retirement, applied by the Box to the generality of its underwriters;

d) The instantaneous convergence of the pension calculation formula of the "general regime"

of the Box, through the crystallization of a first instalment of the pension, ascertained with

basis in the old rules adapted to the time of service provided in its duration-

by December 31, 2005-, and of automatic prescribing of the rules of the general scheme

for application to career later than 2005.

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Proposal for Law No. 171 /XII/2.

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2008, following the reform of the general regime of 2007 and by import of the new

rules of this:

a) Application to pensions allocated from 2008 of the sustainability factor

established for the general regime, ascertained in the light of the evolution of hope

average life at the age of 65;

b) Amendment of the early retirement scheme, which went on to depend on 30

years of service at 55 years of age;

c) Pension bonus required after the employee meets all the requirements

for retirement;

d) Differential update of pensions, depending on the value of those, according to

inflation and real GDP growth.

In 2010, also for future pensions, the first instalment of the pension of the Box,

on the time of service provided up to 2005, no longer per reference 90% of the

last monthly remuneration to pass to correspond to 90% of the last remuneration of

2005 reprized under the general social security regime, based on inflation,

and the early pension went on to be penalized in 0.5% for each month or fray in short

to the underwriter to attain the legal age, to the similarity of what succeeding in the general regime.

2011, For the pensions to be allocated, the first instalment of the pension of the Cash, concerning the

service time provided until 2005, passed from 90% to 89% of the last remuneration of

2005 reprized, as a result of the 10% rise to 11% of the shares of the

subscribers.

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Proposal for Law No. 171 /XII/2.

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2013 On:

a) Sudden convergence-for the still not required pensions-of the general schemes and

special from the Box for the general social security regime in respect of

retiming and retirement conditions-65 years of age and 15 years of service

for the generality of the underwriters of the Box and 60 years of age and time of

variable service for the special regimes of the military and elements of the forces of

security lato sensu ;

b) Broadening of the base of contributory incidence relevant to the calculation of the

second instalment of pension, as of 2013, considering all remunerations

effectively self-injured, as established in the Regimes Code

Contributors to the Social Security Forecast System, independently

of respect or not to the office by which the underwriter is found to be registered in the

Box;

c) Revaluation of remuneration to be considered in the calculation of the first instalment of the

pension, i.e., of the earnings earned up to 2005, based on the evolution of the

index 100 of the salary scale of the general regime careers of civil service-in

the detriment of inflation-, by better adhering to the remunerative reality

specific of the public function.

In spite of this, the situation has not stopped worsening, adding to the structural imbalance of the

Box one of the largest financial and economic crises on a global scale since the Great

Depression, which made collapsing economies and provoked a severe and yet unsurpassed

crisis of sovereign debts, which prevented several states, including Portugal, from se

finance in the debt market by the normal mechanisms, obliging them to resort to

international emergency assistance, granted under very demanding conditions.

As of 2008, public debt has increased from 71.7% to 123.6% of GDP between 2008 and

2012. Meanwhile, the Cash regime reached the unsustainability situation described in

2.3.

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Proposal for Law No. 171 /XII/2.

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For the first time, the state faced the imminence of the bancarroute situation without

possibility of resorting to monetary policy instruments. Thus, they changed from

substantial and irremediable form the circumstances in which it had founded the decision to

circumscribe at 2. level the participation of Box users in the indispensable effort to their

viabilization.

The correction of the structural imbalance of the Box, which, by its size and evolution,

objectively threatens the already difficult financial situation of the state, requires, in effect, measures

energetic and structural, unprecedented in Portugal in the most recent years, but

suitable and proportionate to the seriousness of the problems facing the Country.

It cannot, from this made, the adjustment be effected only for the pensions to be calculated in the

future-which only by itself would postpone the beginning of the effects in about two years, given the volume

of applications, to which the legislation of 2012, pending instruction in the Box is still applicable-

because, as the experiment demonstrates, the total expenditure would continue to increase in shape

accelerated only by the effect of the increase in the number of pensions.

3.2. Solution

The only solution-inevitably consensual, because dictated, in a state of need,

for reasons of elementary pragmatism, without ideological biases or background options

on a new social security model-goes through to deepen convergence in a

double size: at the level of the revenue, through the increase in the rate of the contribution of the

employers to the existing value in the general social security scheme (23.75%), which

is expected to happen already in 2014, and on the expenditure side, through the structural reduction of the level

of expenditure on pensions.

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Proposal for Law No. 171 /XII/2.

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3.2.1. Revenue

At the level of the revenue, there are no viable alternatives to the increase in the rate of the contribution of the

employer. The rate of employee contributions is already found in the 11%, which is the rate

of the general scheme, in addition to which these workers-who will not benefit from the same scheme

of retirement-retire, at least five years later and will have a pension

lower than that of the already retired employees. Support still presently wage cuts

that diminish their ability to withstand the required effort.

The maintenance of the State's degree of contribution to the Box meets the strong constraints

previously referred to, only being possible:

a) If you significantly increased the tax burden, which you already find at a plateau

admittedly high, with injury to economic growth and to

job creation, in a chain effect that would not stop repertoire

negatively on all citizens; or

b) If the state succeed, to bear this expense, to finance itself externally, the

which would add to the country's debt levels already very high,

being, incidtionally, the ability to cut structurally expenditure justly an

of the most relevant factors to ensure access to external financing by the

normal channels.

3.2.2. Expense

At the level of the reduction of expenditure, it saw that the PAEF privileges, the most equitable solution and

viable undergoes by changing the calculation formula of the share of the pension of the underwriters of the Box

enrolled until August 31, 1993 concerning the time of service provided up to 2005 and reduce

or recalculate the pension or first instalment of the pension of retirees by way of

approach it-which still only partially succeeding-of the value that would result from the

rules applied in the general scheme and the Cash to underwriters registered since September 1

of 1993.

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Proposal for Law No. 171 /XII/2.

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Changing the formula only for the future would mean that no positive effect on the

sustainability would be felt in the short and the medium term. The configuration of the expense

also strongly limits the ability of the legislator to define levels of exemption for the

reductions and recalculations without compromising the usefulness of the measure.

3.3. Measures

The present proposed law deepens convergence, for new pensioners, as

has always succeeded in the past and how they impose principles of material justice and equity there are

much championed by the legislator, but equally to the current pensioners, by the same

reasons but also, essentially, by financial sustainability imperatives whose

gravity and premence cannot fail to prevail, at least provisionally, on

the expectations of those affected, however, preserving the already produced effects of the situations to

change, which are only modified for the future.

In the current context of economic and financial emergency of the state, there are no conditions

materials to, for more time, continue to circumscribe the burden of unsustainability

financial from the system to future beneficiaries. The current and future beneficiaries of this

system-which are the main stakeholders in their financial sustainability-must,

everyone, without exception, to the extent of your possibilities, participate in this effort, in the certainty

that whatever comes to it in the future will not leave to everyone for equal affect,

inevitably to a greater extent than the sacrifices that are now requests.

Thus, the effort asked to the current pensioners is essential to safeguarding their own

expectations, which can only be adequately protected in a context of

sustainability of the pension system to which they belong. Such an effort, surely well

understood in the framework of solidarity between generations, is the best guarantee that

also the neighboring generations of those currently retirees will be able to dispose, yet, of

a minimum degree of autonomy in the definition of the future.

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Proposal for Law No. 171 /XII/2.

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The imperative of deepening convergence goes by:

Shall Consider in the calculation of the first instalment of the pension of the Cash, relative to the time of

service provided until 2005, 80%, instead of the current 89%, of the last remuneration of 2005

revalued in the terms of the index 100 of the salary scale of the general regime careers of the

public function, definitively replacing the traditional criterion of the Cash regime

-net or illiquid remuneration of the percentage of the quota for the Box-by

traditional overall rate of pension formation of the general scheme-2% annual rate of

training for each of the 40 years of work.

The non-existence of record of record of remunerations with respect to the underwriters of the

Cash enrolled by August 31, 1993 Infeasible the immediate total convergence of

regimes, in so far as it does not allow to apply the calculation formula of the general scheme that

apura the reference remuneration from the monthly remunerative average of the whole

career.

To Replace the exhaustive regulation in own legislation of the social protection regime

convergent of the conditions of retirement, specifically legal age of access to the

pension, and the discipline of the sustainability factor, by dynamic remissions to the

legislation of the general regime in those domains, thus avoiding the need for future

legislative changes in duplicate;

Eliminate Eliminate, for the benefits to be allocated in the future, the possibility of a retiree or

restrained that you find yourself legally performing public duties choose to receive the

pension at the expense of remuneration, for considering who work should

compulsorily earn the counterpart of the service it provides and not a provision by

substitutive nature of income from work. There are, however, the current regimes

special functions of the exercise of public functions by retirees, without prejudice to the

interested to have to choose between receiving a third of the pension and the totality of the

pay or realize one-third of the remuneration and the totality of the pension;

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Proposal for Law No. 171 /XII/2.

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To Improve the regime of accumulation of pensions and remitting capitals of nature

Indemnity awarded as a result of accidents at work or diseases

professionals without any real impact on the overall earning capacity and earnings

with earnings from work and retirement pensions or retirement;

To Reduce immediately by 10% or to recalculate the first instalment of the pensions of

retirement and retirement in payment on January 1, 2014 of monthly value

higher than € 600.00 in whose fixation has intervening old formula of the Box regime

-which gave the vast majority of pensions the value of 100% of the last monthly remuneration

-, without prejudice:

a) Of the pensions and pension plots fixed in accordance with the standards applicable to the

calculation of pensions of beneficiaries of the general social security scheme, das

pensions automatically updated by partial indexing to the remuneration of

workers in the asset (from the beginning already 10% below the pensions previously

referred to) and the pensions for extraordinary retirement or disability of the disabled

of the Armed Forces, which are not altered;

b) Of the pensions of retirees aged 75 and above, who are

free from reduction / recalculation depending on that age, that is, the minimum threshold

overall exemption from € 600.00 climbs € 150.00 out of five in five years from the 75

years of age of the pensioner;

c) The reduction / recalculation becomes subject to the resolute condition of economic capacity

of the Country and the financial balance of the State allow to reverse those measures,

injured by the cumulative check of the following conditions in two years

consecutive: GDP has an annual nominal growth equal to or greater than 3% and

the budget balance is close to the balance, not less than 0.5% of GDP.

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Proposal for Law No. 171 /XII/2.

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● Apply to survivors ' pensions-benefits of a contributory nature attributed to the

heirlooms of the retirees and retirees of the Box, regardless of the situation

economic of who receives them, which correspond, as a rule, to half of the monthly value

of the pension of the deceased and which are freely accumulatable with all types of

income, particularly earnings from work and retirement pensions or

reform-the same regime of reduction and recalculation established for pensions

retirement and retirement, with the necessary adaptations, notably establishing

exemption limits not less than once the indexing of social supports (IAS);

To Repeal all standards that establish service time additions with effects to

from 2014, without prejudice to the application of those accruals to the time provided until

2013;

Making to depend on the right to benefits of the Box on the grounds of disability of the

confirmation of this inability by the medical board of the Box, without prejudice to the

competences of the custodial joints of the Services for all internal management matters

of human resources that do not impact themselves financially in the Box.

3.4. Effects

The present proposal of law, safeguarding the essential core of the right to a pension,

operates a relative rebalancing between the required effort and the benefits assigned to the

past and current workers and current and future pensioners, seeking to realize

the solidarity between generations that cannot have unique sense, particularly in the current

context of financial emergency of the State.

In the strictly financial plan, it seeks to staunch the degradation of the chronicle situation

unsustainability of the Cash regime, which achieves at this time a gravity without

precedents, through measures that globally represent, as of 2014, per year,

about 1,070 billion or 0.65% of GDP (the Cash deficit is reduced by 2.6%

to, still, about 2% percent of GDP), being:

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Proposal for Law No. 171 /XII/2.

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a) From around 720 million euros the reduction in expenditure on pensions (the reduction

of the pensions and the recalculation of the first instalment of the pensions in allowance saves the

State about 680 million euros in retirement pensions, reform and

disability and approximately EUR 40 million in survivors ' pensions);

b) From around 350 million euros the increase in revenue resulting from the climb to

23.75% of the rate of the contribution of employers.

The effects of the change, for the future, of the calculation formula of the first instalment of the pension

of the subscriptors of the Cashier entered until August 31, 1993 will only be felt by the deadline,

at the rate to which pensions are being assigned on the basis of these new rules, waiting-

if, however, that they also come to have a significant impact on the correction of the trajectory

of unsustainability of the pension system secured by the Box

The set of the measures proposed in this proposed law appears to be essential to

repose of the public pension system on a path of future financial viability,

guaranteeing, thereby, the expectations of current and vindors recipients of benefits

secured by the Box.

4. Conclusion

From a perspetive of legislative policy, the now proposed law takes over as a measure

Incrementer of the Social Rule of Law, as a model of state adopted in the

Constitution of the Portuguese Republic.

It is assumed to be this measure as the implementer of the Social Rule of Law, as soon as the

pursue a strengthening of the principles of equality and justice to the model

coexistential, when, safeguarding the essential core of the right to a pension, operates

a relative rebalancing between the effort required and the benefits assigned to workers

past and present and to current and future pensioners, seeking to realize solidarity

between generations that can't have unique sense, particularly in the current context of

financial emergency of the State.

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Proposal for Law No. 171 /XII/2.

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It is in this framework, and from the implementer vocation of the principles of equality and of the

material justice, which must have-if present that the Constitution does not impose or even suggest

any separation between the social protection regime applicable to workers who

exercise public functions and the regime applicable to the universe of the remaining workers, such

as it does not impose any positive discrimination in favour of one of those universes.

In fact, and just as the Constitutional Court has repeatedly said, despite the fact that

result from the constitutional text the incumbent for the State to organize, coordinate and

subsidize a unified and decentralized social security system-paragraph 2 of Article 63 para.

of the Constitution of the Portuguese Republic-, the field of the right to social security is

also a field of social fundamental rights, which, by nature and physiognomy

constitutional, are not immune to the possibility of free legislative conformation, in addition to that

depend on the existence of financial resources to be effective.

On the contrary, it is to the ordinary legislator that it is up to, in the first line, to define the solutions that

understand more suitable for giving fulfilment to the constitutional commands to which if

finds adstrite-in the face of the circumstances and constraints of each moment-, the

that, within the framework of social security systems, led first to a separation of

regimes and, since 1993-albeit more sharply since 2005-, has led to a

significant effort towards a greater convergence between the same, proven

that is the situation of inequality that nowadays caraterizes the two regimes.

But the implementer vocation of the Social State of Law that caraterizes the present

proposed law revels, outrossim, in particular respect for the fundamental rights of the

citizens, while legal positions of defence in the face of public powers, which animates the

conception of the normative correspondent, to which he presided over the elementary consciousness that the

freedom or margin of innovation referred to above, however broad they may be

borders, it cannot naturally be exercised at all costs. In that sense, the present

proposed law enshrines, as mentioned earlier, a set of solutions that,

putting in evidence interests and tendentially conflicting constitutional values, not

they find obstacles under the point of view of their constitutional compliance.

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Proposal for Law No. 171 /XII/2.

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Since soon and in the matter of the protection of trust it concerns, we use, in addition

of the fact that the convergence of regimes, the better, the convergence of the Cash regime to the

general social security regime, without any guarantee of safeguarding situations

discriminatory, be, as seen, a principle long affirmed in the legal order in

seat of its own, specifically in the most important legislative instruments in the field

of the pensions, such as by balizing expetative and signaling the sense of future evolution of the

Cash Pension system. Such convergence between the two public pension schemes

stated in the laws of bases of social security some three decades ago-initially having

as a horizon the creation of a new single regime, different from those two, more

recently with the stated aim of applying to the users of the Box the rules of the regime

general-, constituting peaceful understanding of the Constitutional Court that in

matter of succession of laws, a norm will be unconstitutional if it results from it an idea of

arbitrariness or excessive onerousness, which will happen whenever the change in the order

legal resulting from that standard is not reasonably foreseeable for your recipient and the

same be disproportional.

Going precisely to the meeting of this concern, the present proposed law comes to associate

changes in pension amounts to criteria or indicators of trust, which

not only guarantee the fairness and fairness of the solutions that comes to enshrine but,

essentially, strongly mitigate their impact on the lives of the respected recipients,

sidelining an excessive or disproportionate dimension that the same could

behave.

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Proposal for Law No. 171 /XII/2.

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They are three the aforementioned criteria of trust: safeguarding minimum values, which allows

subtract from the universe of application of this proposed law the beneficiaries of pensions

whose value is understood to be indispensable to ensure minimum subsistence conditions,

thereby defending the essential nucleus of the minimum existence inherent in respect for the

dignity of the human person, protected constitutionally through the prohibition of

social backlash; protection by age, which aims to mitigate the reductions in amounts

of pensions depending on the evolution of the age of the pensioner, taking into consideration the

need to accrate the situation of older beneficiaries, at a time when already

it is not possible to make a readjustment of your life circumstances; and indexing a

objective economic indicators, which guarantees not only the non-defintivity of the

measures that now approve of but, and above all, the expectation of its possible reversibility

in the future as soon as economic conditioners allow it.

Through these mechanisms, they thus strongly protect expectations and the

investment of trust made by the beneficiaries as to the amount of their pensions,

safeguard yourself, from the same step, the constitutive freedom and the self-reproofing that

characterize the autonomy of the legislative function.

And it is equally through the same mechanisms as, from the point of view of the ban on

excess or rule of the subjection of the ablative interventions of the legal positions of the

particular to the minimum necessary, also they coexistential to a rule of law

worthy of that qualification, whether it can assert the containment of these measures at a minimum

necessary to ensure the very subsistence of the public social security system,

proved that it was, such as the above, the suitability of the content of the present proposal

of law as a response to the challenges of economic, financial, demographic, and the

own principles that this system faces in actuality.

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

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Proposal for Law No. 171 /XII/2.

33

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.

Object

1-A present law establishes mechanisms of convergence of the social protection regime of the

public function with the general regime of social security.

2-A present law also proceeds:

a) To the fourth amendment to Law No. 60/2005 of December 29, amended by the Laws

n. paragraphs 52/2007, of August 31, 11/2008, of February 20, and 66-B/2012, of 31 of

December, which establishes mechanisms of convergence of the protection regime

social function of the civil service with the general social security regime with respect to the

conditions of retirement and calculation of pensions;

b) To the third amendment to Decree-Law No. 503/99 of November 20, amended by the

Laws No 59/2008, of September 11, and 64-A/2008 of December 31, which

approves the new legal regime for accidents in service and diseases

professionals in the framework of the Public Administration;

c) To the amendment of the Decree-Law No. 498/72 of December 9 approving the Statute

of the Aposentation.

3-A present law further repeals the standards setting up service time additions

for purposes of retirement under the General Box of Retirements (CGA).

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Proposal for Law No. 171 /XII/2.

34

Article 2.

Amendment to Law No. 60/2005 of December 29

Article 5 of Law No. 60/2005 of December 29, amended by Laws No 52/2007, of 31

of August, 11/2008, of February 20, and 66-B/2012, of December 31, passes to

next essay:

" Article 5.

[...]

1-[...]:

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

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

following formula:

R x T1 / 40

where:

R is 80% of the relevant monthly remuneration pursuant to the Statute of the

Retiming, with a maximum limit corresponding to 12 times the value

of the indexing of social supports (IAS), perceived until December 31 of

2005; and

T1 is the expression in years of the number of months of service provided up to

December 31, 2005, with the maximum limit of 40 years;

b) [...].

2-A General Box of Retirees applies the sustainability factor

corresponding to the year of the retiming according to the regime which

successively invigorate for the sustainability factor of the pensions of

old age of the previdential system of the general social security regime.

3-[...].

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Proposal for Law No. 171 /XII/2.

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4-[...].

5-[...]. "

Article 3.

Addition to Law No. 60/2005 of December 29

It is added to Law No. 60/2005 of December 29, as amended by the Laws 52/2007, of 31 of

August, 11/2008, of February 20, and 66-B/2012, of December 31, Article 3, com

the following essay:

" Article 3.

Conditions of ordinary retirement

They may retire the underwriters who contest the warranty period and the age

normal of access to old age pension that successively are

established in the previdential system of the general social security regime. "

Article 4.

Amendment to Decree-Law No 498/72 of December 9

Articles 78 and 79 of the Status of Retirement, Approved by Decree Law No. 498/72,

of December 9, they go on to have the following essay:

" Article 78.

[...]

1-The retirees, retirees, reservists out of effectivity and equiped

you may not exercise public functions for any services of the

central, regional and municipal administration, public enterprises, entities

public business, entities that integrate the regional business sector and

municipal and too many public collective people, except when there is law

special to allow it or when, for reasons of public interest

excecional, be authorized by the members of the Government responsible

by the areas of finance and the Public Administration.

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Proposal for Law No. 171 /XII/2.

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2-[...]:

a) Retirees and retirees who have retired or restrained

on the grounds of disability;

b) Retirees and retirees by force of application of the penalty

discipline of retirement or compulsive retirement.

3-[...]:

a) All types of activity and services, regardless of your

duration, regularity and, when onerous, form of remuneration;

b) [...].

4-[...].

5-[...].

6-[ Revoked ].

7-[...].

Article 79.

Suspension of pension

1-In the period that lases the exercise of the public functions authorized the

retirees, retirees, reservists out of effectivity and equiped no

receive pension or pay for reservation or equate.

2-Cessant the exercise of public functions, the payment of pension or

booking or equating remuneration, with updated value in the terms

general, is resumed.

3-[...].

4-[...].

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Proposal for Law No. 171 /XII/2.

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5-[...]. "

Article 5.

Amendment to Decree-Law No 503/99 of November 20

Article 41 of the Decree-Law No. 503/99 of November 20, amended by the Law

n ° 59/2008 of September 11 and by the Law No. 64-A/2008 of December 31, passes

next essay:

" Article 41.

[...]

1-[...]:

a) With remuneration corresponding to the exercise of the same activity,

in case of absolute permanent disability resulting from accident or

occupational disease;

b) With the share of the remuneration corresponding to the percentage of

permanent reduction of the employee's overall earning capacity, in

case of partial permanent disability resulting from accident or

occupational disease;

c) [ Previous point b )].

2-The default of the provisions of the preceding paragraph determines the loss of the

periodic benefits corresponding to the period of the exercise of the activity,

without prejudice to the review of the degree of disability pursuant to the present

diploma.

3-Are accumulatable, without prejudice to the rules of accumulation of the

respects mandatory social protection schemes, periodic benefits

by permanent disability with the pension or retirement pension

and the pension for death with the survivor's pension, in the part where these

exceed those.

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4-The provisions of the preceding paragraphs apply, with the necessary

adaptations, to compensation in capital, the value of which is limited to the share

of the periodic provision to remand that there was to be paid in accordance with the

rules of accumulation of this article. "

Article 6.

Amendment to Decree-Law No 137/2010 of December 28

Article 6 of the Decree-Law No. 137/2010 of December 28, amended by the Law

n 60-A/2011 of November 30 by the Decree-Law No. 32/2012 of February 13 by the

Law No 66-B/2012 of December 31 and by the Decree-Law No. 36/2013 of March 11,

goes on to have the following essay:

" Article 6.

[...]

1-[...].

2-[...].

3-Stay resaved from the provisions of the previous number the retirees,

retirees, reservists or equiped, hired or appointed, to:

a) To integrate the surveillance teams to the schools provided for in the Decree-

Law No. 117/2009 of May 18, amended by the Decree-Law

n. 14/2012 of January 20;

b) Work as pilots, air traffic controllers, technicians

of aeronautical maintenance, accident investigators in aviation

civil or specialized aeronautical personnel, under the Decree-Law

n. 145/2007 of April 27;

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c) Exercise functions as clinicians in services and establishments of the

National Health Service, pursuant to the Decree-Law No. 89/2010,

of July 21, during the period of its duration, extended by the

Decree-Law No 94/2013 of July 18, until July 31, 2015;

d) Preset vocational training promoted by the Institute of

Employment and Vocational Training, I. P., in the quality of pilots,

air traffic controllers, aeronautical maintenance technicians and

other specialized aeronautical personnel, as long as the training is

circumscribed to the commitments made by the Portuguese state

relating to the development of the aviation industry and with prior

information to the member of the Government responsible for the area of

Public Administration;

e) Intervene, as arbitrators chairpersons in the arbitration referred to in the

Article 375 of Annex I to Law No 59/2008 of September 11,

amended by Law No. 3-B/2010 of April 28 by the Decree-Law

n. 124/2010, of November 17, and by the Laws n. 64-B/2011, of 30

of December, 66/2012, of December 31, and 68/2013, of 29 of

august.

4-The retirees, retirees, reservists or equiees covered by the

previous number would necessarily choose between realizing the totality of the

pension or remuneration on booking and a Tuesday part of the remuneration

basis that compete for the duties exercised or receive the entirety of this and a

Tuesday part of the pension or remuneration on the reserve, with the exception of the

doctors, to which the partial accumulation schemes continue to apply

and suspension of the pension provided for in the Decree-Law No. 89/2010, 21 of

July.

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Proposal for Law No. 171 /XII/2.

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5-The entities in which the functions are exercised communicate to the General Box

of Retirees the option of the pensioner, on the terms and with the cominations

established in the Status of Afpostion.

6-[ Revoked ]. "

Article 7.

Transient and adaptation standard

1-The pensions assigned by the CGA, up to the date of the entry into force of this Law, are

changed, with effect from January 1, 2014, on the following terms:

a) Retirement, retirement and disability pensions of illiquid monthly value

higher than € 600.00, fixed in accordance with the successive calculation formulas

in force of the Status of Retirement, Approved by Decree Law No. 498/72, of

December 9, as well as set of harmony with special regimes

provided for in own statutes or in other legal or conventional provisions,

have the illiquid value on December 31, 2013 reduced by 10%;

b) Retirement, retirement and disability pensions of illiquid monthly value

higher than € 600.00, fixed on the basis of the calculation formulas successively in

Vigour of Article 5 of Law No 60/2005 of December 29, amended by the Laws

n. paragraphs 52/2007, of August 31, 11/2008, of February 20, and 66-B/2012, of 31 of

December, have the net worth of the P1 recalculated by replacement of the

remuneration (R), initially considered, by the percentage of 80% applied to

same gross remuneration of quota for retirement and pension of

survival;

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c) Overall gross monthly value survival pensions at once the

indexing of social supports (IAS) fixed in accordance with the Status of Pensions

of Survival, approved by the Decree-Law No. 142/73 of March 31, have the

net global value on December 31, 2013 reduced by 10%;

d) Monthly gross monthly value survival pensions in excess of an IAS,

fixed simultaneously in accordance with the Status of Pensions of Survival,

approved by Decree-Law No. 142/73 of March 31 and with the rules of the scheme

general social security, are recalculated by application of the provisions of the b )

to the illiquid value of the P1 of the pension, retirement or disability pension that

have by reference.

2-The provisions of the preceding paragraph shall not apply to the following pensions, which remain

unchanged:

a) Those fixed solely on the basis of the legal standards applicable to the calculation of the

pensions of beneficiaries of the general social security scheme under the terms of the

provisions of the Decree-Law No 286/93 of August 20;

b) The automatically updated by indexing to the remuneration of workers in the

net asset of quotas for retirement and survivor pension;

c) The extraordinary retirement or disability pensions of the disabled of the Forces

Armed;

d) Retirement, retirement and disability pensions, awarded by the CGA to the

date of entry into force of this Law, of an unlawful monthly value not exceeding that:

i) € 750.00, provided that the recipient's respect is at least 75 years old;

ii) € 900.00, provided that the recipient's respect is at least 80 years old;

iii) € 1050.00, provided that the recipient's respect is at least 85 years old;

iv) € 1200.00, provided that the recipient's respect is at least 90 years old;

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e) Survival pensions, assigned by the CGA to the date of the entry into force of the

present law, of monthly gross monthly value not exceeding:

i) € 450.00, provided that the elder beneficiary is at least 75 years old;

ii) € 500.00, provided that the elder beneficiary is at least 80 years old;

iii) € 550.00, provided that the elder beneficiary is at least 85 years old;

iv) € 600.00, provided that the elder beneficiary is at least 90 years old;

3-A The application of the provisions of the provisions d ) and and ) of the previous number evolves in function of the

age of the beneficiaries covered by the scope, producing effects from

of January 1 of the year following the one in which the beneficiary completes the age of each

step.

4-In cases where the application of the provisions of paragraph 2 shall result in a pension for retirement,

of retirement and invalidity of a monthly net worth less than € 600.00 or a pension of

survival of monthly gross monthly value lower than an IAS, applies only to

reduction necessary to ensure the realization of those values, which are progressively

high depending on the age of the beneficiary under the terms of the sub- d ) and and ) of paragraph 2,

respects.

5-The provisions of the preceding paragraphs shall also apply to retiree pensions,

of retirement, disability and survival to be allocated by the CGA after the entry into force

of this Law in accordance with the calculation formula referred to in points a ) a d ) of paragraph 1 of the

present article, regardless of the date of the presentation of the application for the application

of pension or of the officious promotion of its allocation, producing the reduction of the value of the

Pension effects from the moment on this is due.

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6-A change in the value of pensions effected under the terms of this Article is reversible

in a context of economic growth of the country and fiscal balance of accounts

public, affixed by the cumulative verification of the following conditions in two years

consecutive:

a) Gross domestic product (GDP) has an equal annual nominal growth or

greater than 3%;

b) The budget balance is close to the balance, not less than -0.5% of GDP, of

agreement with the principles of the Stability and Growth Pact and, in

particular, of the Treaty on Stability, Coordination and Governance in the Union

Economic and Monetary, transposed into national legislation, specifically

for the Budget Framework Act, passed by Law No. 91/2001, of 20

of August.

7-Verified the conditions laid down in the preceding paragraph, a reversal of the

recalculation of pensions, effected for the illiquid value earned on December 31 of

2013, without prejudice to the legal updates.

Article 8.

Abrogation standard

1-Are repealed all standards setting up service time additions to

retiming effects within the CGA, without prejudice to the application of the accruals of

time provided for the time of service provided by December 31, 2013 and of the scheme

of bonification applicable to the military of the Armed Forces, provided for in legislation

special, which currently finds itself in review.

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2-Are repealed Article 89 (2) and Article 118 of the Status of Apostion,

approved by Decree-Law No. 498/72 of December 9 passing the right to

benefits of CGA awarded on grounds of incapacity to depend on the

confirmation of this inability by the medical board of the CGA.

3-The provisions of the preceding paragraph shall cover:

a) All pensions and cash benefits paid by the CGA that have as

condition of assignment, among others, the inability of its beneficiary;

b) Partial permanent disability, whatever the degree, and disability

absolute permanent, regardless of the relationship of those incapacities with

the service or the functions performed;

c) All situations where the incapacity is, in advance of the sending of the process to

CGA, declared by another entity, particularly on the basis of opinion or

joint decision or private medical service.

4-Are repealed Article 37 (4) (4) and Article 78 (6) of the Statute of the

Retirement, approved by the Decree-Law No. 498/72 of December 9.

5-It is repealed Article 6 (6) of the Decree-Law No. 137/2010 of December 28,

amended by Law No. 60-A/2011 of November 30 by the Decree-Law No. 32/2012, of

February 13, by Law No. 66-B/2012 of December 31 and by the Decree-Law

n. 36/2013, of March 11.

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Article 9.

Prevalence

1-The provisions of the previous article have excecional and imperative character, prevailing over

any other standards, general or special, contrary and on instruments of

collective regulation of work and employment contracts, and may not be turned away

or modified by the same, with the exception:

a) From the occupational accident and occupational diseases scheme established in the

Decree-Law No. 503/99 of November 20, as amended by the Laws 59/2008, of

September 11, and 64-A/2008, of December 31;

b) Of the scheme provided for in Decree-Law No. 43/76 of January 20, concerning the

qualified military personnel with disabilities from the Armed Forces under that diploma.

2-The provisions of Article 3 of Law No 60/2005 of December 29 in the essay given by the

present law, has excecional and imperative character, prevailing over any others

standards, general or special, contrary and on instruments of collective regulation

of work and employment contracts, and may not be sidelined or modified by the

same, with the exception of the non-transitional regimens provided for in the Decree-Law

n ° 229/2005 of December 29 and of the statutory schemes provided for:

a) The military of the Armed Forces, the Republican National Guard, the Police

Maritime and other militarized personnel;

b) The personnel with police functions of the Public Security Police;

c) The criminal investigation personnel of the Judiciary Police;

d) The staff of the prison guard's body.

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3-The pension suspension scheme provided for in Article 79 of the Status of Retirement Allowance,

approved by the Decree-Law No. 498/72 of December 9 in the essay given by the

this law, applies to situations of the performance of functions constituted or renewed to

departure from the entry into force of this Law.

Article 10.

Entry into force

This Law shall come into force on the day following that of its publication.

Seen and approved in Council of Ministers of September 12, 2013

The Prime Minister

The Minister of the Presidency and Parliamentary Affairs