This review provides policy recommendations on how to improve the Portuguese pension system, building on the OECD’s best practices in pension design. It details the Portuguese pension system and identifies its strengths and weaknesses based on cross-country comparisons. The Portuguese pension system consists of an old-age safety net, a pay-as-you-go defined benefit scheme and voluntary private savings. The safety net includes an old-age social pension and a complement (the so-called Complemento Solidário para Idosos or CSI), both of which pursue similar objectives but have different eligibility criteria. The defined benefit scheme has two main components: the general social security scheme (regime geral da Segurança Social) and the civil-servant pension scheme (Caixa Geral de Aposentações or CGA). The latter has been closed to new entrants since 2006 with new civil servants contributing to the general scheme. Funded voluntary pensions make up a very small share of total pension entitlements. The OECD Reviews of Pension Systems: Portugal is the fourth in the series, after Ireland (2014), Mexico (2016) and Latvia (2018), with a fifth review on Peru under preparation.
People today are living longer than ever before, while birth rates are low in many OECD countries. Social protection for older individuals will therefore play a growing role and pensions are a central component of well-being at older ages. Each country review in this series delivers an in-depth analysis of the pension system. The assessment focuses on the pension system’s capacity to deliver adequate retirement income in a financially sustainable way and highlights OECD best practices for the design of pensions. In particular, these reports take into account the impact of demographic, social and economic changes on pension benefits. The reviews cover all components of pension systems: public, occupational and personal plans, as well as, when relevant, schemes for public-sector employees. The analyses are based on both OECD flagship pension publications: Pensions at a Glance and Pensions Outlook as well as country-specific sources and research. Finally, the reviews lead to policy recommendations about improving the pension system to better address country-specific challenges.