‘Permanent review’: Understanding how pensioners will be affected by the STF ruling

The decision affects pensioners who began contributing before the Real Plan, in June 1994, but only retired after the 1999 reform and had higher salaries at the beginning of their careers.

BRASILIA – The Supreme Federal Court (STF) Last week he returned to judge a sensitive issue for a group of pensioners in the countryThese are those who began contributing to the INSS before the Real Plan, in 1994, but did not retire until 1999, when President Fernando Henrique Cardoso approved a pension reform with “transitional” rules for these people.

On Friday 20, the STF voted by majority to reject two appeals that allow these pensioners to abandon these “transitional” rules and join the so-called “definitive” rule, if they understand that this will be advantageous. This is what became known as the “lifetime review”, because in theory it could recalculate benefits already paid.

This possibility has led the federal government – ​​both the Bolsonaro government and the Lula government – ​​to question the change before the STF, arguing that it could generate an impact of up to R$ 480 billion on public accounts. In addition, it is understood that there has been a change of currency in the country, with the Real Plan, and the calculation could lead to distortions.

Understanding the schemes and pensioners affected

But what is the difference between “transitional” and “definitive” regimes? According to Minister Luís Roberto Barroso, who chaired the session that dealt with the issue this year and gave a brief summary of the case, there are currently three groups of contributors to the INSS. However, due to the process, only one of them will be affected.

According to Barroso’s explanation, the The first group is that of pensioners by November 28, 1999. This is the date of approval of the social security reform in the FHC government. Being already retired, for them, nothing has changed and nothing will change now. For these Brazilians, the pension calculation took into account the 36 highest salaries in the period up to 48 months before the retirement or death of the insured.

The second group consists of people who started contributing on or after November 29, 1999.that is, one day after the sanction of the reform. This group is part of the so-called “final rule”, because it joined after the implementation of the changes. For them, even the STF ruling has no impact. The rule applied to calculate the compensation, already under the effects of the reform, takes into account 80% of the highest wages of the worker’s entire life (already based on the real, the new currency).

Already the third group is what is the subject of the tender”transition ruleThese people started contributing before the 1999 reform, but only retired on that date. For them, the rule that applies is different from the “definitive” rule. count the average of the highest salaries by 80%. of the worker’s entire life, but excluding salaries before July 1994when the Royal Plan was implemented.

The group affected by the ruling, therefore, is the one that began contributing before the Real Plan, but retired only after the approval of the 1999 social security reform.

Small group of beneficiaries

These pensioners are claiming losses and want to be able to choose between the “final” rule and the “transitional” rule. That is, they want to be able to calculate taking into account 80% of all salaries, including the period before the monetary stabilization plan.

Lawyers and experts understand this only a small group of pensioners would benefit from the so-called “permanent review”with the change of regimes. In addition to this constraint – having started contributing before the Real Plan and retiring only after the 1999 reform – salaries at the beginning of the career are generally lower than those at the end. The change, therefore, for many people, would not be advantageous and would lead to a decrease in income.

Comings and goings of the STF

• In December 2022The STF decided that the pensioners concerned could opt for the most advantageous regime, i.e. the “transitional” or “definitive” regime.
• In March 2024However, the court decided to annul, for procedural reasons, this decision, denying that the insured could make such a choice. The change in the composition of the Court, with two new ministers (Flávio Dino and Cristiano Zanin), contributed to the change.
• In September 2024analyzing the appeals against this sentence, the Court formed a new majority to deny this choice.

War of Numbers

The appeals against the latest ruling were filed by the National Confederation of Metalworkers (CNTM) and the Institute for Social Security Studies (Ieprev). Ieprev argued that the Supreme Court was negligent in not commenting on the effects of this year’s March decision on the decision taken in 2022.

The entity disputed the impact of R$ 480 billion requested by the Union for the review of benefits. According to studies conducted by economists Thomas Conti, Luciana Yeung and Luciano Timm for Ieprev, the most likely financial impact would be R$ 1.5 billion or, in the worst case, R$ 3.1 billion.

In June, the Attorney General’s Office (AGU) spoke out against the resources. The body argued that the decision in favor of pensioners, issued in December 2022, “has not yet become final, so there is no threat to legal certainty.”

The AGU also cited a more recent study, according to which the financial cost of the “whole life review” would amount to R$ 70 billion.

The vote was 7 votes to 1 for the rejection of the appeals. In addition to the rapporteur, Minister Nunes Marques, Ministers Cristiano Zanin, Flávio Dino, Cármen Lúcia, Gilmar Mendes, Luiz Fux and Luís Roberto Barroso voted to deny the resources.

The only vote in favor of pensioners was given by Minister Alexandre de Moraes, who acknowledged that the STF had already decided to validate the lifetime review. Three votes remain that must be counted in the system by the 27th. Until then, any minister can change his position.

Source: Terra

Rose

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