Bolsonaro proposes pension overhaul for Brazil

Brazilian President Jair Bolsonaro says pension reform is a priority

The new president of Brazil has put forward a plan to revamp the country's pension system - tackling a reform considered critical to boosting growth of South America's biggest economy.

The proposal would set a minimum retirement age of 65 for men and 62 for women, among other changes.

The government said the overhaul would save more than 1 trillion reais (£210bn; $270bn) over the next decade.

But opposition parties argue the changes would penalise the poorest.

The proposal must be approved by both Houses of Congress.

Many previous governments in Brazil have tried but failed to reform the country's pension system, which is running large deficits, a situation expected to worsen in coming decades as the country's population ages.

President Jair Bolsonaro, a far-right politician who was elected last year, said the issue would be the number one priority at the start of his new government.

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"We need to change the rules of the pension system," said Leonardo Rolim, the official responsible for pensions at the Economy Ministry.

"People are living longer and women have fewer children, which means that the working population will decrease."

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This will be the toughest test yet for President Jair Bolsonaro, who is still a relatively untried political negotiator.

To approve the main changes, he will need backing from two thirds of Congress.

Brazilian lawmakers are known to strike hard bargains, often demanding changes in other policies in exchange for their support. And attempts at reform by other presidents have failed in the recent past.

Everyone is watching the issue very closely.

Market analysts often describe pension reform as the most important factor to kick start growth in the economy again.

But workers say they will be paying an unfair price for the changes.

Under the current system, workers in Brazil can retire after contributing to the pension system for at least 35 years in the case of men, or 30 for women.

The new proposal would set minimum retirement ages for men and women, and delay full payout of pensions until 40 years of contributions.

Workers could access partial pensions after 20 years.

Mr Bolsonaro has also proposed increased contributions from wealthier taxpayers and creating a more private system of individual savings accounts, funded by employees, as another alternative.

The new rules would phase in over 12 to 14 years,

But opposition parties have vowed to block the bill.

They say it will penalise the poor, who are more likely to start working at a young age and would now be required to work longer before being able to collect pension benefits.

Unions have mobilised mass protests against previous reform efforts.