Convergent Social Protection Scheme (Closed Scheme)

Mandatory insurance

• Civil servants and public sector agents.
• Teachers from private and cooperative schools.
• Workers of some public (or state-owned, though private) companies.
• Participation is optional for Members of the Parliament (Deputados), if they have been covered by the ‘Civil Servants’ Pension Agency’ (Caixa Geral de Aposentações, CGA) before and they choose to continue participating in this scheme.
• The scheme has been closed for new entrants in the civil service since 01/01/2006.

General finances

• Mainly tax-financed and only partly PAYG-financed from insurance contributions. (As the scheme is closed for new entries, there are more retired persons than active contributors in this scheme; the weight of fiscal transfers from the state budget represents more than half of the funding.)

Contribution rates

• Fixed share (34.75%) of the monthly pensionable remuneration, without contribution assessment ceiling.
• Contributions are shared between the employer (23.75%) and the civil servant (11%, of which 8% are assigned to old age pensions).

• The ‘Civil Servants’ Pension Agency’  (Caixa Geral de Aposentações, CGA)  administers the scheme.

Qualifying conditions

• Normal retirement age (idade normal de acesso à pensão de velhice, INAPV) is 66 years and 5 months (2020) with a minimum of 15 years of service; it increases to 66 years and 6 months in 2021, in accordance with the average life exptectancy.
• Personal retirement age (idade pessoal de acesso à pensão de velhice, IPAPV) for persons aged at least 60 and over and with at least 40 years of registered earnings: every additional year in the contributory record reduces the normal retirement age by 4 months.

Early retirement

• Early retirement is available, without penalties, for persons with a long-term service record (age 60 after 48 years of service; age 60 after 46 years of service, if the scheme affiliation occurred before the age of 17).
• Early retirement with higher negative (permanent) adjustments to pension benefits (0.5% per each month of early retirement) is available for persons who are: (1) 60 years old and, despite that age, have completed at least 40 years of registered earnings; (2) at least 61 years old and who have at least 40 years of registered earnings, entailing in this case also the application of the sustainability factor (i.e. 0.8485, which equals 15.2% in 2020).

Deferred retirement

• Retirement can be deferred until age 70 with positive (permanent) adjustments to pension benefits in the form of a pension bonus (maximum of 90% of the last salary; 92%, if the social security rules apply).

Combining employment & retirement

• Termination of employment is a precondition for claiming pension benefits.
• Employment in the private sector is permitted after retirement without earnings limit, but there are important restrictions concerning the public sector.

Pension benefits

• Earnings-related benefits, paid 14 times per year (incl. 12 monthly payments, one holiday payment, and one Christmas payment).
• Earnings-related benefits are based on whole working career (maximum: 40 years).
• Maximum amount: 92% of the remuneration of reference (if the social security rules apply).
• Minimum amount: depends on the years of service; it is EUR 257.28 for 5 to 12 years of service, EUR 268.16 for 12 to 18 years of service, EUR 286.66 for 18 to 24 years of service, EUR 320.79 for 24 to 30 years of service, and EUR 425.04 for more than 30 years of service.

Benefit calculation

• For civil servants and other persons covered by the scheme who joined the scheme since 01/09/1993: same rules as for general social security scheme apply.

Taxation and social security contributions

• Pension benefits are subject to income tax according to general tax rules (income category: H).
• Pension benefits are not subject to social security contributions.