Contribution Time Retirement: Regulations and Criteria [Updated]

The retirement based on years of contribution was a popular option in Brazil for a long time.

The option was changed and new regulations were introduced with the pension reform (EC 103/2019).

Many insured individuals still have entitlements or could be impacted by the temporary regulations.

In this guide, we detail the regulations, criteria, computation of benefits, and their impact on policyholders.

What is Contribution Time Retirement?

Prior to the 2019 Pregnancy Reform (EC 13/2019), this option permitted individuals to retire with a minimum contribution period to the INSS, without needing to meet a minimum age requirement.

It was perfect for individuals who began working early and accrued sufficient time either continuously or with breaks in between.

With the Reformation, this regulation was abolished, but those who had already met the criteria still retain their acquired privilege.

New transition rules were established to accommodate individuals who were nearing the minimum time requirement.

What does Retirement by Time of Contribution and Age refer to?

The reform introduced new rules for transitioning based on a combination of age and years of contribution.

The idea is to enable insured individuals who were already employed to gradually adjust to the new system.

Different options for accessing the pension benefit are determined by the correlation between age and contribution.

Who qualifies for Retirement for Time of Contribution?

Insured individuals who fulfilled the necessary criteria before the Pension Reform on 13/11/2019 are entitled to retirement benefits based on their contribution time.

To guarantee their retirement, insured individuals must meet the transitional regulations.

Retirement Eligibility Based on Years of Service

The necessary conditions are based on when the policyholder began making contributions.

• Before the Reformation began:

1. Men can contribute for 35 years, experience 180 months without contributions, and there is no minimum age requirement.
2. Women have made contributions for 30 years without a minimum age requirement, but have faced 180 months of lack.

• After the Reformation: Complying with the transitional rules involves a combination of contribution time, minimum age, and criteria such as points or penalties.

Working under special conditions such as poor working conditions or danger may decrease the necessary time by converting special time to regular time.

Insured individuals who meet the criteria described are eligible for special retirement benefits.

Benefit calculation for retirement based on years of contribution.

The retirement benefit calculation for the mentioned case considers the duration of contributions to the INSS.

Some updates have been included with EC 103/2019.

• Before the Reformation, the pension factor is determined by an average of 80% higher contribution wages, affecting the value based on age and contribution duration.

• Since July 1994, there has been an average of 60% of wages after the Reformation, with additional increases of 2% per year for contributions over 15 years for women and 20 years for men (Article 26, Section 2, EC 103).

Transition rules for retirement based on contribution time are outlined in EC 103/2019.

Transitional rules were implemented to ensure a seamless transition to the new social security provisions and to protect the rights of individuals who have previously contributed to the INSS under the reform.

Explore each of them down here:

Retirement Contribution Time: 50% Pedage Rule [Article 17, EC 103/2019]

For policyholders who, in 2019, had a maximum of two years left to complete their contribution period:

• Men live for 33 years on average.
• 28 is intended for females.

They must complete over 50% of the required years to reach 30 years of contributions for women and 35 years of contributions for men.

The benefit amount will be determined based on the average of the contribution wages and calculated remuneration, multiplied by the pension factor as stipulated by the law.

The pension factor considers the insured individual’s age, life expectancy, and years of contribution upon retirement.

Retirement Age Contribution: Full Pedage Rule [Article 20, EC 103/2019]

Insured individuals who have made INSS contributions in 2019 but have less than 28 years of contributions for women and less than 33 years for men must adhere to the following requirements.

• Men: 35 years of service, minimum of 180 months of absence, 60 years old.
• Women have made contributions for 30 years, experienced at least 180 months of absence, and are 57 years old.
• A pension supplement equal to 100% of the remaining contribution time needed to reach 35 years for men or 30 years for women at the time of pension reform.

Retirement age is determined by the length of employment.

You have the option to retire by meeting the specific criteria outlined in the Prevident Factor as of the date of EC 103’s promulgation on 12/11/2019.

• 30 years of dedication to women and 35 years of service to humanity (Article 16, I, EC 103).
• Women can retire at the age of 56, while men can retire at 61, as stated in Article 16, II of EC 103.

Since January 2020, the constitutional amendment has continued to specify a 6-month increase annually until reaching the current minimum age requirement.

View a preview of the table provided (Article 16, Section 1, EC 103/19).

Insured individuals who are successful in fulfilling teaching duties in early childhood education, elementary school, and high school will have their contribution time and age requirements adjusted accordingly (Article 16 § 2, EC 103).

• Women have contributed for 25 years and can work until they are 57 years old, with a gradual increase of 6 months per year.
• Man has made contributions for 30 years and is currently 56 years old, with an annual increase of 6 months until reaching the age of 60.

Contribution time for retirement: Points rule [Article 15, EC 103/2019].

To ensure a retirement based on years of contribution, it is essential to fulfill specific criteria under the points system.

• Man has contributed for 35 years and experienced at least 180 months of absence.
• Woman: 30 years of service with at least 180 months of absence.
• Equivalent to 86 points for women and 96 points for men, based on age and length of contribution time (including fractions).

The constitutional amendment specifies that starting in 2020, there will be an annual increase of 1 point until reaching a maximum of 100 points for women and 105 points for men, as outlined in Article 15, Section 1 of EC 103.

Age and length of contribution will be measured in days to determine the total points (Article 15, Section 2, EC 103).

Teachers are subject to different rules, as stated in Article 15, § 3 of EC 103.

• Women have been contributing for 25 years, while men have been contributing for 30 years.
• The combination of age and years of service, including fractions, is worth 81 points for women and 91 points for men.
• There will be an annual increase of 1 point until reaching the maximum of 92 points for women and 100 points for men.

What counts as “Service Time”?

For RGPS, the term “service time” is defined as:

• Contributions were documented efficiently.
• Periods of activity in rural or military settings;
• Time spent in a unique task, with the option to be changed into regular time.
• Public service schedules with their own rules.

Is your client’s contribution time ready for retirement application?

Retirement rules have evolved, but transition regulations ensure options remain available.

Well-informed attorneys can assist clients in optimizing advantages by utilizing legal research and AI tools such as Legal.AI to expedite the process with compelling justifications quickly.