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OECD Reviews of Pension Systems: Portugal

image of OECD Reviews of Pension Systems: Portugal

This review provides policy recommendations on how to improve the Portuguese pension system, building on the OECD’s best practices in pension design. It details the Portuguese pension system and identifies its strengths and weaknesses based on cross-country comparisons. The Portuguese pension system consists of an old-age safety net, a pay-as-you-go defined benefit scheme and voluntary private savings. The safety net includes an old-age social pension and a complement (the so-called Complemento Solidário para Idosos or CSI), both of which pursue similar objectives but have different eligibility criteria. The defined benefit scheme has two main components: the general social security scheme (regime geral da Segurança Social) and the civil-servant pension scheme (Caixa Geral de Aposentações or CGA). The latter has been closed to new entrants since 2006 with new civil servants contributing to the general scheme. Funded voluntary pensions make up a very small share of total pension entitlements. The OECD Reviews of Pension Systems: Portugal is the fourth in the series, after Ireland (2014), Mexico (2016) and Latvia (2018), with a fifth review on Peru under preparation.

 

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Labour market developments and pensions

This chapter analyses labour market developments in Portugal that are relevant from a pension perspective. It shows that while short career histories are uncommon among current retirees, risks of short careers have been building up for future generations of retirees, among other things as a result of the economic crisis. The chapter also describes the different pathways into retirement in the Portuguese pension system, including specific early retirement regulation for long-term unemployed people. It then shows that some forms of non-standard work, such as work on temporary contracts, are frequent in Portugal and discusses the impact of changing labour markets on old-age protection systems.

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