New amendments introduced to early retirement legal framework
Labor and Employment Law 23-2018
Decree-Law no. 119/2018, of December 27, was published in the Official Gazette, amending the legal framework for early retirements, namely easing the possibility of early retirement to beneficiaries with longer careers, reducing the age upon which those beneficiaries may request their early retirement and reducing the cuts currently in force for retirement pensions. These amendments allow Social Security beneficiaries to, in each specific case, be entitled to the better regime in terms of early retirement.
These amendments will be introduced in phases during 2019.
1. New early retirement framework
From January, 1st, 2019, onwards, early retirement is achievable for beneficiaries with, at least, 63 years old and with 40 or more years with contributions to Social Security.
The beneficiaries that, after January 1st, 2019, do not meet the legal requirements for early retirement under these amendments, may request their early retirement under the legal framework in force until December 31st, 2018. In these cases, the retirement pension will also be calculated according to that legal framework.
From October 1st, 2019, onwards, early retirement is achievable for beneficiaries with, at least, 60 years old and with 40 or more years with contributions to Social Security.
2. End of the “sustainability factor” for early retirement pensions
Early retirement pensions, calculated according to the introduced amendments, will no longer be subject to the “sustainable factor”’ cut.
The beneficiaries that, after these amendments enter into, do not meet the introduced legal requirements for early retirement, may request their early retirement under the legal framework in force until December 31st, 2018. In these cases, the retirement pension will also be calculated according to that legal framework.
For this purpose, Social Security shall calculate the early retirement pension according to the legal framework that, in each case, is better for the beneficiary.
3. Retirement pension bonus for some early retirements
The pension bonus currently in force for beneficiaries that retire after the “normal retirement age” will be also applicable to retirement pensions requested after the beneficiary´s “personal retirement age”.
The beneficiary “personal retirement age” is calculated according to the “normal retirement age”, reduced in 4 month for each year of contributions to Social Security that the beneficiary may have above 40. The beneficiary “personal retirement age” cannot be inferior to 60 years.
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