MNI EXCLUSIVE: Brazil Pension Reform Still Lacks Support

     BRASILIA(MNI) - Leaders of the two main party blocs supporting the

government of President Jair Bolsonaro in the Brazilian Congress are sceptical

about the chances of approval of a key pension reform, telling MNI Thursday the

legislation currently lacks the necessary votes in the lower house Chamber of

Deputies.

     Waldir de Oliveira, leader of Bolsonaro's Social Liberal Party which has 54

parliamentarians in the Chamber of Deputies, said dialogue with the government

has strengthened support for the proposal in recent days but not by enough to

guarantee the necessary votes.

     "You have to negotiate even more. There are still deputies who want to

appoint people to fill positions in the government and this must be resolved,"

he told MNI.

     Elmar Nascimento, who leads a five-party bloc with 146 deputies, said

Economy Minister Paulo Guedes, who attended a public hearing in the Chamber and

discussed the reform with parliamentarians on Wednesday, must participate in

more debates with lawmakers.

     "The government needs to convince parliamentarians that the reform will

reduce privileges," he said. The government argues that its proposed system

would reduce the difference between pensions paid to top civil servants, who

mostly retire on full pay, at amounts which can exceed $7,500, and to other

government workers, who get a maximum $1,450.

     --DEADLINE

     Bolsonaro and Guedes had planned on gaining approval for the project in the

Chamber and Federal Senate by June, but this deadline could be pushed back. The

votes of 308 of 513 deputies and 49 of 81 senators are needed to approve the

pension reform, which is a constitutional amendment.

     On Wednesday, Guedes suggested that the government would accept changes to

the Continuous Benefit welfare payment made to old people with a monthly income

of less than $65, and said that he could drop a proposed switch to

contribution-funded pensions if the change was not made in such a way as to save

a significant amount of money.

     The Bolsonaro Government hopes the reform will save $250 billion in ten

years. Last year, Brazil's welfare deficit was almost $49 billion.

     A survey that will be released on Friday by the Fenafisco federation of tax

workers, which opposes the reform, will show that 75% of party and congressional

leaders have a negative view of the way the government has handled the proposal,

MNI understands. In addition, 40% of them disagree with the contribution-funded

pension scheme and 57% consider that all social security rules should continue

to be included in the Constitution. The bill foresees that most retirement

issues would be transformed into ordinary laws, which are easier to modify in

the legislature .

     The research commissioned by Fenafisco was carried out by website Congresso

em Foco, which interviewed 57 congressional leaders in the Senate and House from

March 18-22, asking them to give ratings of 1 to 5 for the chances of approval

of different reform proposals. The worst score was linked to changes to welfare

payments to the very poor, with 1.7 out of 5, while the move to

contribution-funded pensions scored 1.8. The highest scores, of 3.5 and 3.4,

were for an increase in the minimum retirement age for civil servants and for

defining a minimum private sector retirement age.

--MNI London Bureau; +44 203 865 3829; email: jason.webb@marketnews.com

[TOPICS: M$T$$$,M$Z$$$,MT$$$$,MX$$$$,MGZ$$$]