OECD Reviews of Pension Systems: Portugal
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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.
Introduction to the Review of the Portuguese pension system
This chapter introduces the Review of the Portuguese pension system. This review provides policy recommendations on how to improve the Portuguese pension system, building on the OECD’s best practices in pension design. The review describes the Portuguese pension system in great detail and identifies strengths and weaknesses based on cross-country comparisons. After economically painful years during the financial crisis and its aftermath, Portugal’s economy has recovered. While public debt remains at high levels, the labour market has made remarkable improvements over the last years, with strongly increasing employment rates and falling unemployment. Portugal’s demographic situation is challenging. The country’s population is ageing very rapidly and shrinking, among other things due to very low fertility rates.
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