Portugal rejects pension reform report as working group warns of structural deficit

Working group assessment and deficit claims

On 18 August 2026, an independent working group appointed by the Ministry of Labour presented its report on pension reform, titled "Por um Sistema Sustentável, Adequado e Justo - Um Contrato entre Gerações". The report, coordinated by economist Jorge Bravo alongside former Iniciativa Liberal deputy Carla Castro, concluded that Portugal's Social Security system has run an effective deficit since at least 2014. Bravo stated that official reports showing budget surpluses present an incomplete assessment by excluding the Caixa Geral de Aposentações (CGA), the civil service pension scheme closed to new entrants since 2005. According to the study, successive governments have violated the system's framework law for 20 years by transferring general state budget tax funds to cover CGA shortfalls since 2006. The authors maintained that contributory expenditure is currently funded through general taxation rather than dedicated contributions.

What has been happening since 2006 is that, to cover the insufficient funding of Caixa Geral de Aposentações, funds are being transferred from the State Budget.

Proposed structural changes and voluntary savings

The report put forward a package of structural adjustments alongside voluntary supplementary mechanisms. Key recommendations include replacing the calculation of calendar contribution years with effective contributory density, eliminating a fixed minimum retirement age without penalties, and establishing flexible retirement pathways. To address low pension payouts, the experts proposed occupational pension plans with automatic enrollment (Planos de Pensões Profissionais de Adesão Automática). Under this system, new and existing workers would be enrolled by default with an option to opt out, featuring minimum contribution rates between 8% and 12% matched up to set limits by employers and the state. The group also suggested a child savings account named Programa Grão a Grão. Bravo stated that all proposed changes preserve acquired rights, maintain existing pensions, exclude pension caps, and rely entirely on voluntary supplementary participation.

Government dismissal of structural reforms

Following the presentation, the Ministry of Labour, led by Minister Maria do Rosário Palma Ramalho, declared that the executive will not carry out any structural reform of the Social Security system during the current legislature ending in 2029. The ministry stated that the report represents an autonomous technical study whose recommendations remain the sole responsibility of its authors. Prime Minister Luís Montenegro committed in April 2025, during an election debate with Pedro Nuno Santos, not to alter the Social Security system during this mandate. The government confirmed that the document has been forwarded to the Assembly of the Republic and social partners solely as a contribution to national public debate. Government officials noted that the policy file is closed for the executive.

Opposition criticism and calls for hearings

Opposition parties across the political spectrum condemned the report's conclusions, arguing that the findings seek to build a case for pension privatization. Socialist Party deputy Miguel Cabrita stated that the executive selected authors with known pro-privatization perspectives and conflated separate accounting systems to manufacture a deficit. Left Bloc deputy Fabian Figueiredo labeled the joint calculation of CGA and Social Security a creative accounting maneuver designed to frighten the public, demanding an urgent joint parliamentary hearing with Minister Palma Ramalho and Jorge Bravo. The party Livre argued that public Social Security remains financially solid and urged the government to explore alternative revenue streams, including taxes on capital, consumption, financial transactions, and ultra-wealthy individuals.

Adding Caixa Geral de Aposentações to Social Security and saying there is a hole is creative accounting, it is wanting to scare the Portuguese.