Pension reform and fully funded complimentary regime

Vol. 37 No. 3 (2017)

Jul-Sep / 2017
Published February 26, 2020
PDF-Portuguese (Português (Brasil))
PDF-Portuguese (Português (Brasil))

How to Cite

Lavinas, Lena, and Eliane de Araújo. 2017. “Pension Reform and Fully Funded Complimentary Regime”. Brazilian Journal of Political Economy 37 (3):615-35.

Pension reform and fully funded complimentary regime

Lena Lavinas
professora titular do Instituto de Economia da UFRJ e bolsista nível 1 do CNPq.
Eliane de Araújo
Professora da Universidade Estadual de Maringá e bolsista produtividade em pesquisa do CNPq.
Brazilian Journal of Political Economy, Vol. 37 No. 3 (2017), Jul-Sep / 2017, Pages 615-635


This article examines how pay as you go (defined benefit) public pension system relates to a fully funded complimentary regime (or defined contribution pension), in the context of a renewed attempt to reform public retirement benefits in Brazil. After featuring the main characteristics of the public pension system and how the fully funded private regime has evolved as of late, this paper questions the idea that the latter would be more beneficial to the increase of private savings and, as a result, of investment, aspects that are crucial for the development of Brazil. The findings suggest that the fully funded private regime, rather than incentivizing investment growth and the stock market, tends to reinforce income concentration, which is by all standards already alarming in Brazil.

JEL Classification: H55; H58; J11; J21; J24.

Keywords: social insurance fully funde complementar regime Brazil. PAYG system