The impact of the creation of Funpresp on the pension benefits of federal civil servants

Abstract

The goal of this study is to quantify the impacts of the creation of Funpresp in 2012, focusing on the active federal civil servants. Using techniques of actuarial mathematics, through the calculation of annuities, we calculate the difference between the retirement benefits in the old and in the new pension regime. The change is unfavorable for all servers of different ages and income levels, with losses of about 15%. Additionally, we analyzed the set of conditions that should be verified so that any worker would be affected by the changes. Only in the highly unlikely circumstances of a real interest rate above 9% or a contribution rate of 47% of the income for Funpresp that would be no reduction in the benefits. These results illustrate the need for action to increase the informational level of civil servants in order they can understand correctly the impacts of the creation of Funpresp.