October 20, 2017 / 6:29 PM / 2 years ago

Brazil's Temer says pension reform might not pass this year

Brazil's President Michel Temer reacts during a ceremony to deliver the Order of Medical Merit medal, in Brasilia, Brazil October 17, 2017. REUTERS/Ueslei Marcelino

BRASILIA (Reuters) - President Michel Temer said on Friday that a bill overhauling Brazil’s costly pension system might not clear Congress this year as planned, the first time that he has indicated that such a delay might happen.

In an interview with Poder360 news website, Temer said the government had to again consult lawmakers in the government coalition, many of whom have already said they are doubtful the legislation will pass this year.

The pension reform is crucial to Temer’s attempts to plug Brazil’s budget deficit and reduce the bloated pension system. But its provisions to increase the retirement age have made it unpopular with Brazilians.

Temer put the delay down to charges in a corruption case that put his legislative agenda on hold for six months.

The government is considering a watered-down version of the bill, Temer said, confirming previous statements from officials that it would be ready to settle for a bill that included at least the introduction of a minimum retirement age of 65 years for men, up from the current average age of 55.

A diluted pension bill would also need to include a gradual transition to the new rules and parity between the public and private pension systems, he said.

His chief of staff Eliseu Padilha, who also took part in the interview, said the government hoped a less extensive reform would still achieve 75 percent of the planned fiscal savings, assuming it included cuts to benefits for public sector employees.

Temer also said the government may issue a temporary decree to extend for a few weeks the Refis program that allows companies and individuals to renegotiate delinquent tax payments.

Reporting by Anthony Boadle, Editing by Rosalba O'Brien

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