Brazil pensions: has the time for change come?

Useful article on Brazil's pension system in the NYT. It clearly describes what is useful about the system but also its huge problems of inequality. The good comes from generous non-contributory pensions, particularly in the rural sector:

The pension system can ease extreme poverty. For instance, rural workers can retire five years before others even if they have never contributed to the public pension system, receiving a monthly payment equal to the minimum wage, about $210 a month.

The growth of the minimum wage has made these advances even more significant. Yet, at the same time, there are huge problems with inequality in the system--something that Hunter and Sugiyama explained well years ago. See this extreme case

In 2000, for instance, officials did away with rules allowing the daughters of military officials to receive the pensions of their fathers after they died. But the shift applied only to new entrants into the armed forces, so more than 185,000 women still draw military survivors’ pensions, often amounting to the full salary of their fathers upon retirement. Spending on such pensions is forecast to last through the end of this century, economists say.

There is little doubt that advances towards a more universal, redistributive system require a reduction of some of these benefits and an increase in other transfers and services. Yet this will be difficult as the upper middle class uses anti-austerity rhetoric to prevent reform. Here you have a former leader of the shopkeepers' associations:

Making retirees pay the price is just not fair,” said João Pimenta, 63, a former director of a shopkeepers’ association who retired at age 49 and regularly leads protests against pension cuts in Brazil’s capital, Brasília. “Why isn’t the economic elite being called upon to sacrifice? I’m sick of hearing that normal people need to pay the price with their pensions.”

How can we promote anti-austerity and, at the same time, reduce segmentation in social policy is one of the main challenges of Latin America in the post-commodity boom era.