April 6, 2017 / 4:50 PM / 2 years ago

Brazil's Temer to revise pension reform proposal to secure approval

BRASILIA (Reuters) - Brazilian President Michel Temer plans to water down its landmark pension reform proposal to ease lawmakers’ resistance to the controversial bill key to rebalance the government’s depleted finances.

Brazil's President Michel Temer speaks to media during the LAAD, the biggest military industry expo in Latin America, in Rio de Janeiro, Brazil April 4, 2017. REUTERS/Pilar Olivares

Temer said in a radio interview on Thursday he has authorized the lawmaker sponsoring the plan to alter its terms as long as he maintains the bill’s minimum retirement age. He did not specify what changes could take place.

The potential changes could cost the government 115 billion reais (29.35 billion pounds) in savings over the next decade, according to calculations released by the office of the president’s chief of staff.

The reform plan, submitted last year to Congress, sets a minimum retirement age at 65 for both men and women and requires more years on the job for workers to gain full pension benefits.

Those points and others to limit benefits have drawn criticism from public servants and labour unions alike, irking lawmakers who face elections next year.

A newspaper survey of lawmakers on Wednesday showed support for the proposal fell well below the 308 votes necessary to pass the lower house of Brazil’s Congress, with only 92 in favour and 242 against.

Arthur Maia, the lawmaker sponsoring the legislation, told reporters later on Thursday that he will change the proposal to protect the poorest without hurting the “backbone” of the amendment.

He is considering altering the transition rules for those nearing the retirement age, easing pension requirements for farmers and agricultural workers while keeping some special benefits to teachers and police.

Maia said he will unveil his proposed changes on April 18.

A revamp of Brazil’s costly pension system is the centrepiece of Temer’s crusade to balance the government budget and reverse the rise in public debt as he seeks to lift Latin America’s largest economy from its deepest recession on record.

Still, some investors fear he could face a rocky road ahead due to a bickering Congress and corruption probes ensnaring senior figures of his administration.

Temer could even be unseated if Brazil’s top electoral court rules that he and former President Dilma Rousseff, under whom he was vice president, used illegal money to fund their 2014 campaign. Rousseff was impeached in 2016.

Additional reporting by Patricia Duarte; writing by Aonso Soto and Bruno Federowski; editing by James Dalgleish, G Crosse

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