Updated 11:04 PM EDT, Mon, Oct 19, 2020

Rio de Janeiro Governor to Pay Pensions Using Environmental Funds 

  • +
  • -
  • Sign up to receive the lastest news from LATINONE
Close

In an attempt to redistribute funds, Rio de Janeiro state governor Luiz Fernando Pezao wants to use money set for environmental funds to pay for pensions.

According to Chron.com, the money, which was supposed to be used for cleaning up waterways before the upcoming Olympics, will be used to cover the 2016 pension payment deficit that rings up a total of $4 billion.

The governor will not be able to redistribute said funds without the approval of the state legislature, but it is a possibility. However, as The New York Times noted, this could potentially hurt the cleanup efforts for the Olympics, especially considering water contamination problems. Carlos Minc, the former environmental secretary in Rio, said that Pezao's proposal will result in the city taking an "environmental step backward." The money, besides clearing waterways, will also be used to clean up lakes and rivers, as well as Guanabara Bay, which is the water sports venue for the upcoming games.

Minc added, "The money will not be replaced and the fund will be left with nothing."

Brazilians, who usually retire at an average age of 54, collect multiple pensions that can total to well over $100,000 every year. Due to several loopholes, their spouses and daughters will also go on collecting their pensions after their death. This is why many retired civil servants marry younger women who will be entitled to full pensions for decades after they are gone.

Unfortunately for Brazil, this loophole is draining the country of money and has been feeding its biggest political turmoil. While President Dilma Rousseff wanted to keep pension spending from ballooning, her congress voted to expand benefits, which caused more scuffle in the economy.

In a separate report, economists already noted the problem spending of Brazil, which spends more than 10 percent of its GDP on the "crazy" pensions. While this is similar to the rate that European countries are spending, Brazil's problems come as the number of pensioned individuals is expected to reach about 14 percent of the overall population in two decades. Compared to this year, the numbers are as low as seven percent.

Authorities have been trying to raise the retirement age to 60 and 65 for women and men respectively, but unless the loopholes are addressed, men will continue on retiring at a much younger age and Brazilian women will continue on accepting large pensions from their older husbands.

© 2015 Latin One. All rights reserved. Do not reproduce without permission.
  • Sign up to receive the lastest news from LATINONE

Curiosidades

Real Time Analytics