MG’s pension reform is finally approved by ALMG

Just over two months after the start of the process in the Legislative Assembly of Minas Gerais (ALMG), the deputies definitively approved the reform of the State Social Security. The seal took place this Friday (4), in an extraordinary session. Part of the changes will go to the sanction of Governor Romeu Zema (Novo) and it will be up to the ALMG itself to promulgate other parts of the new rules for the granting of pensions and benefits.

The pension reform is divided into two texts: the Proposal for Constitutional Reform (PEC) 55/2020 and the Complementary Law Project (PLC) 46/2020. In the case of PEC, there were 52 votes in favor and 21 against, with no abstentions. The PLC also received the seal of 52 parliamentarians, with 20 votes against. The PEC will be promulgated by the ALMG itself, while the PLC will be sent to Zema to carry out the sanction.

The new contribution rates for active and inactive officials will go into effect 90 days after the government’s sanction. However, the PLC cannot be sanctioned without the enactment of the PEC. In this case, the government of Minas Gerais will wait for Parliament (which has up to five business days from this Friday) to promulgate the constitutional reform to sanction the project, the rest of the rules will automatically take effect after the promulgation of the PEC.

Until the new indices come into force, the current scenario remains the same: 11% discount for active employees. The same percentage is still discounted to inactive and pensioners on the amount that exceeds the limit of the General Social Security System (RGPS), which is R $ 6,101.06. As of the end of the 1990s, they will be taxed on inactive people and pensioners who receive more than three minimum wages.

The approved texts maintained the minimum retirement age proposed by Zema, which is 65 years for men and 62 years for women who enter the public service after the entry into force of the new regulations. ALMG tried to lower the retirement age of the new servers to 60, but the government sent a replacement to negotiate the issue. With this, the final text provides that public servants who are already in public service will be able to retire at 60 years of age, but for those who have not yet entered the minimum age increases to 62 years.

In the case of the retirement of public security employees, there was a reduction in the minimum age in relation to what the government intended. During the processing of the Constitutional Reform Proposal 55/2020 in the second round, it was established that penitentiary and socio-educational agents, civil police and legislative police can retire at 50 years (women) and 53 years (men). The original text sent by Palácio Tiradentes predicted 53 and 55 years, respectively.

The texts also provide for teachers to retire at the age of 60 for men and 57 for women. The contribution time for the category is 25 years, but it is necessary that the entire period is in actual teaching practice.

New Rates

In the case of rates, ALMG modified the initial proposal presented by the government, which would be from 13% to 19%, with four contribution ranges. The new indices, which will come into effect 90 days after the measure is enacted, will take into account a progressivity of 11% to 16%, but with seven ranges.

The progression will follow the following order: 11% for those who receive up to R $ 1,500; 12% for those who receive from R $ 1,500.01 to R $ 2,500; 13% for those who receive between R $ 2,500.01 and R $ 3,500; 14% for those who receive between R $ 3,501.00 and R $ 4,500; 15% for those who receive between R $ 4,501.00 and R $ 5,500; 15.5% for those who receive between R $ 5,500.01 and R $ 6,101.06; 16% for those who receive more than R $ 6,101.06.

According to the original proposal, there would be four contribution ranges: 13% for those who receive up to R $ 2,000; 14% for those who receive between R $ 2,000.01 and R $ 6,000; 16% for those who receive between R $ 6,000.01 and R $ 16 thousand; and 19% for those who receive more than R $ 16 thousand.

Transition rules

The government has established a 100% toll (period in which the worker who is already at work will have to work overtime to retire according to the new rules). In practice, it would mean that the servers would run twice as long as necessary to claim the benefit today. This rate has been cut in half.

Another mechanism introduced was to compensate civil servants who have already contributed over the time required for retirement, but who have not yet reached the minimum age. The idea is that for each day more contributed than necessary, one day will be deducted from the minimum age for the server to retire. The rule, however, is only valid for those who entered public service until December 16, 1998.

In practice, if a server has contributed for 30 years, but is 55 years old, to claim the benefit the age of 60 would be considered, since they contributed five more years according to the proposed rules (the government stipulates 25 years contribution time). With that, instead of working another 10 years, the time would be cut in half.

For current servers, there were still changes in the minimum time spent in public office. The text sent by the government required 20 years, a term that was reduced to 10 years, as is already the case today.

The rule was also maintained that public servants who entered the State until December 31, 2003, can retire with full earnings at the age of 60, if a woman, and 65, if a man. For those who started their career in the State after 2003, the ages are the same, but the value of the benefit is calculated by specific rule.

Inactive taxation is reduced

Another point dehydrated by Parliament refers to the possibility of taxing inactive employees and pensioners to equalize the deficit of social security. The original idea of ​​the government was that anyone who received more than the minimum wage (R $ 1,045) could already have a discount on their salary, as established at the national level. ALMG raised this level, establishing that only those who receive more than three salaries (R $ 3,135) can pay taxes.

Still, the proposal built was a compromise between what the government and Parliament wanted. This is due to the fact that initially the ALMG established that only the servers that receive above the ceiling of the General Social Security System (RGPS), which currently is R $ 6,101.06.

However, the government managed to reverse the issue, since the measure would make the impact of the reform unfeasible since there are few officials who adjust to this salary range.

Extraordinary rate and MGPrev left the text

On the eve of the final vote, the opposition party to Zema managed to modify two other points that generated discontent. The first of these refers to the collection of an extraordinary rate, which would be an additional contribution for the active, inactive and pensioners whenever the social security system registers a deficit.

In the text sent by the government of Minas it was predicted that “once the insufficiency to solve the actuarial deficit has been demonstrated, the institution of extraordinary contributions, of active officials, retirees and pensioners is allowed.”

Likewise, according to the bill sent by Romeu Zema, the extraordinary contribution would be applied simultaneously with other measures and would be effective “for a specified period, starting from the date of its institution.”

In the case of MGPrev, it was an autarky that would be in charge of the management of social security and that would arise from the split of the Institute of State Servants Pensions (Ipsemg), which is currently in charge of the health and welfare of the public servers.

The government argued that MGPrev would be an independent municipality, centralizing the granting and payment of pensions and pensions.