Low investment rates are limiting Brazil’s future potential growth rate. At the same time, its saving rate is also well below international averages, and a shortage of domestic saving appears to be a major barrier to higher investment rates. Public-sector saving is negative due to high levels of expenditures, in particular pension entitlements. In addition to being costly, the pension system redistributes income to individuals with relatively low saving propensities, thereby reducing private saving as well. In order to control pension expenses in the future, useful parametric pension system reforms would include introducing a general minimum retirement age, raising the earliest possible retirement age, strengthening the penalties for early retirement and replacing the indexation of minimum pension benefits to the minimum wage by a more moderate adjustment.