Piracicaba Proposes Pension Reform for Municipal Servers: Higher Contributions and Retirement Age

The Municipality of Piracicaba, São Paulo, has introduced a bill to significantly alter retirement rules for its municipal employees. A key proposal is to establish a minimum retirement age of 69 years for new public service entrants, with an exception for teachers who will retain specific constitutional provisions. Current municipal employees will transition to federal rules, requiring a minimum age of 62 for women and 65 for men, a notable increase from the current 60 for men and 55 for women. Additionally, the bill mandates an increase in the mandatory pension contribution rate from 11% to 14% for all active employees, as well as for current retirees and pensioners. The municipality cites a projected deficit of R$ 3.16 billion in the municipal pension and social assistance institute (Ipasp) as the primary driver for this reform. This deficit, according to officials, could jeopardize essential public services if the municipality needs to use treasury funds to cover pension payments. The proposed changes also include measures to strengthen the pension system's finances, such as ensuring monthly contributions are transferred to the pension institute and mandating actuarial studies before salary adjustments. The municipality also plans to establish a Real Estate Investment Fund (FII) to manage properties and financial assets, using their returns to address the pension deficit. However, the project faces opposition from municipal employees, with their union advocating for its withdrawal to allow for broader discussion. The proposed retirement age of 69 has drawn particular scrutiny, with some questioning its technical justification, especially since it exceeds the federal minimums. The bill is currently under review by the municipal Chamber of Deputies, which has requested additional documentation from the prefecture, including actuarial studies and financial impact assessments, before proceeding with its analysis.