January 23, 2019 / 10:48 PM / 5 months ago

UPDATE 1-Brazil aims to pass pension reform by mid-year -source

(Adds details, quotes, background)

By Marcela Ayres and Ricardo Brito

BRASILIA, Jan 23 (Reuters) - Brazil’s new government expects to win congressional approval for reform of the country’s costly pensions system by the middle of this year, a senior Economy Ministry official told Reuters on Wednesday.

The official, who spoke on the condition of anonymity, said President Jair Bolsonaro’s administration will not publish its reform proposal until it is finalized, to avoid pressure from different social groups that will be affected.

The proposal will be a constitutional amendment, requiring three-fifths of the votes in both chambers of Congress, and will not include changes to military pensions that will be dealt with separately, the source said.

Economy Minister Paulo Guedes told Reuters in Davos earlier on Wednesday that the pension reforms could save Brazil up to 1.3 trillion reais ($345 billion) in a decade.

The government plans to sell the proposal by focusing on eliminating social security fraud, trying to avoid the pitfalls faced by the previous government of President Michel Temer, who failed to win enough support in Congress after different sectors weighed in and succeeded in forcing changes to their benefit.

“Our proposal will be based on equity and social justice. In other words, those who earn more will contribute more,” the source said.

“Above all, it will be a project that will give us the fiscal stability that the country needs to restore investment and create jobs,” the official said. (Reporting by Marcela Ayres and Ricardo Brito; editing by Phil Berlowitz)

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