Study: Reform after 40 years has bonuses, but there is a limit of 92%

A conclusion is part of the study “Social effectiveness of pensions – The case of substitution rates”, authored by José António Vieira da Silva, former Minister of Labor, Solidarity and Social Security, and Vítor Junqueira, member of the Green Paper Commission and former director of the National Pension Center and which was presented today.

The size of the contribution career is “one of the most important factors” for the calculation of a pension, and a 40-year career is considered “as a complete career, in the sense that the generality of the provisions points to a career of this size that guarantees a full pension”, he notes.

Thus, “a shorter career will result in a pension with penalties”, while extending your career beyond the age of 40 may have bonuses.

“If the decision to continue the career beyond 40 years leads to the beginning of the pension after the retirement age in force, there will be bonuses,” says the analysis, which warns, however, that “the resulting pension is limited to 92% of the reference remuneration.

In other words, “the premium will result mainly for those with higher remuneration and who therefore have a training rate below 92%”, he adds.

On the other hand, extending the career beyond the age of 40 “will lead to a reduction in the retirement age in force, which may result in a reduction or even elimination of early penalties”.

According to the ‘policy paper’ of the Res Publica Foundation, an institution linked to the PS and dedicated to the thought of public policies, “the effective relationship between pensions and salaries (income) subject to contributions will depend, with increased incidence, on variables such as personal retirement age, length of career contribution and the nature of the same career”, so “distinctions in these areas may lead to significant changes (penalizations or increases).

The study also highlights that, in view of the current legal framework, “the moment of beginning of the career contribution can influence the ability to increase the value of the pension”, since “an entry after the age of 20 removes the ability to reverse the personal retirement age without penalties and, therefore, reduces the possibility of increasing the value of the pension”.

With regard to the tax impact, this analysis also concludes that “higher remuneration leads to lower pensions with reference to their final wages”.

According to the authors, “this progressive effect” stems from “the rate of pension formation, whose change in the new rules” (which came to consider the full career), “came to introduce a redistributive mechanism” in the calculation of reforms.

The retirement age will rise to 66 years and 11 months in 2027, according to the data on life expectancy published at the end of May by the National Institute of Statistics (INE).

This figure is higher in two months than in 2026, which had already risen two months from 2025.