Retirement Pension Scheme

Until 2005-12-31, Portuguese civil servants and public sector agents employed by State administrations, Local authorities, Autonomous and military communities, as well as deputies (optional), teachers from private schools and workers of some public (or State owned though private) companies, as long as they kept that job situation and received pensionable remuneration, were obligatorily CGA scheme members.

The civil servants appointed after 2005-12-31 are no longer eligible to join the CGA pension scheme. They must join the general private workers pension scheme.

The civil servants appointed before 2006-01-01 maintain their CGA pension scheme membership as long as they don't leave the civil service.

Contribution rate

The monthly contribution rate to CGA is 10% of the pensionable remuneration (7,5% for retirement and 2,5% for survivor pension).

Pensionable remuneration

Pensionable remuneration means all salary or wages, excluding overtime payments and special payments for extra duties, payable to a member for service. The pensionable remuneration is always related to the job that entitled the member to join the scheme (scheme meaningful job).

Should the member have simultaneously more than one job, two situations can occur:

• Both jobs entitle him to join the scheme (2 scheme meaningful jobs) - the pensionable remuneration is the higher of the two salaries;
• Only one of the jobs is scheme meaningful - the pensionable remuneration corresponds to the salary of that job.

When the member leaves temporarily the job that entitled him to join the scheme (unpaid leave, secondment, etc.) and the new job is not scheme meaningful, his contributions towards the scheme will remain related to the meaningful job (job of origin).

The pensionable remuneration of the civil servants appointed before 1993-09-01 (old members) is the final salary (the last monthly remuneration the member received before retiring). The pensionable remuneration of the civil servants appointed after 1993-08-31 (new members) is the average of the salaries he received in his entire career.

For the part-time workers, the figure used to work out the pension benefits is the pensionable remuneration that they would have received if they had worked full time.

Remuneration exempt from contributions

The exemption from contributions covers, in general, all remunerations that cannot be considered in any way for the calculation of the pension, either because they don't correspond to the job itself, or because they are not paid for service, but to reimburse costs or expenses (traveling or subsistence allowance, etc.).

Contribution payment

The scheme member contributes 10% of his monthly gross pensionable remuneration. That amount is deducted from the salary automatically every month by the employer (withholding).

Leaving the scheme

Scheme membership is directly related to the job that entitles the member to join the scheme. So, if the employee leaves definitively that job (and ceases to be a civil servant) his membership is cancelled. Two situations are, then, possible:

• The deferred member is fully vested - he will qualify for a pension at 70 years or, before, in case of disability;
• The deferred member had not yet acquired 5 years of reckonable service - only if he returns to be a civil servant / scheme member will he be able to qualify for a pension.

Definition

Time of service is used to determine both the members' eligibility for retirement benefits and the amount of the benefits.

Time of service counting is the procedure in which the length of service is counted and, sometimes, a contribution debt is calculated.

Time of service counting claim

Prior to retirement, the scheme member can, at any time, apply for a previous time of service counting (the final counting is automatically performed during the retirement claim processing).

The time of service counting claim is submitted to the employer by active members and directly to CGA by deferred members.

In both cases, the scheme member / deferred member must gather service proofs, according to which the counting will be processed.

Time of service counting

Time of service (or period of membership) represents periods of employment that are either earned or claimed as equalized or extra civil servants service.

Earned service - the member earns one month of reckonable service for each complete month during a year in which he is an employee who works in a position which is full-time (this is the membership normal reckonable service).

Extra service - if the member has years of service in the Public Administration before appointment or military service or if he has worked in a job or situation that entitles him to have the time of service increased (multiplied by 25% or 50%, for instance: military service on fighting areas). In this case, in order to have those periods taken into account, the member will have to demand it and to pay the corresponding contributions.

Calculation of extra service contributions

The contributions the scheme member has to pay in order to have the extra service counted are calculated on the basis of his current pensionable remuneration and at a contribution rate of 7,5% for each month taken into account.

Payment of extra service contributions

The payment of extra service contributions is made in full in a lump sum, unless the member demands its payment in equal monthly installments over a period no longer than 5 years / 60 payments (minimal monthly installment of € 50,00 ), which will be made by deduction from his monthly remuneration (withholding).

Definition

Retirement pension is the benefit granted to the scheme members that, having met the qualifying conditions, cease to be civil servants / employees.

Retirement can be due to:

• Employees' request, when he meets the voluntary retirement qualifying conditions;
• Disability;
• Age limit;
• Special regulations.

Entitlement to a retirement pension depends on a period of membership of 5 years minimum.

Retirement can either be claimed by the member - voluntary retirement -, or imposed by law (age limit) or by employer' decision - compulsory retirement.

Voluntary retirement can be qualified as early retirement.

Entitlement to retirement pension

A retirement pension is granted when the scheme member meets one of the following conditions:

• 65 years of age and 15 years of service or, until the 31th December 2014, the following age and time of service:

• At least 5 years of service (contributory service within European Union or in Portuguese private workers pension scheme is considered for this purpose) and:
  • Age limit (normally 70 years);
  • Permanent disability for work;
  • Punishment with the penalty of compulsory retirement;
  • Other situations subject to special regimes.

The scheme members that had, on the 31st December of 2005, at least, 60 years of age and 36 years of time of service are allowed to retire whenever they want. The scheme members aged less than 60 years that could retire during 2005 will continue to be able to retire earlier.

An early retirement pension (voluntary type of retirement) is granted when the scheme member is, at least, 55 years old, as long as he had served 30 years until his 55th anniversary.

Retirement pension regime

The voluntary retirement pension not related to disability is granted according to:

• The pension scheme rules and the member situation (age,salary and time of service) at a particular time chosen by the scheme member;

or, if no date is indicated in the retirement pension claim form:

• The pension scheme rules at the time CGA receives the retirement pension claim and the member situation at the time the final decision concerning the retirement pension is taken.

In the other situations, the retirement pension is granted according to the pension scheme rules and the member situation at the time (scheme meaningful moment):

• The scheme member reaches the age limit (70 years);
• The scheme member is found permanent and totally unable for his work by CGA medical committee;
• The member is punished with the penalty of compulsory retirement.

After that moment, nor membership period or salary changes will be considered for pension calculation (not scheme meaningful).

Scheme meaningful job

The first part of the retirement pension (P1) of the civil servants appointed before 1993-09-01 (related to the time of service before 2006-01-01) is calculated upon the last job the member has at the meaningful moment, even if the pensionable remuneration is not its last month remuneration.

There are some situations in which the pensionable remuneration is:

• The average of pensionable remuneration over the last 2 years (more than one job / position in that period);
• The average of pensionable remuneration during the last 3 years (chief offices or scheme members labour contracted);

The second part of the retirement pension (P2) of the civil servants appointed before 1993-09-01 (related to the time of service after 2005-12-31) and the whole retirement pension of those appointed from 1993-09-01 onwards are calculated according to the rules that apply to private workers / Social Security pensions (average of pensionable remuneration during the entire career).

Method of calculation

Ordinary retirement

The key factors in determining the amount of ordinary retirement pension are the pensionable salary net of contributions to the pension scheme and the length of time of service / membership (in years and complete months expressed in years), limited to 36 years (members having, at least, 60 years of age and 36 years of service during 2005 or only the membership length condition) or to the time of service of Table II.

The scheme members that had, on the 31st December of 2005, at least, 60 years of age and 36 years of time of service keep the former pension method of calculation.

Calculation formula: Pension = (R x T) / 36

R = Meaningful remuneration (pensionable salary net of contributions towards the pension scheme)
T = Years and complete months of service expressed in years, with the maximum of 36

The meaningful remuneration (R) is the sum of:

• Final monthly salary net of contributions to the pension scheme at the meaningful moment or average of the monthly salary net of contributions towards the pension scheme (please refer to Scheme meaningful job); and;
• Average of the fix permanent subsidiary bonuses paid over the last 2 years net of contributions towards the pension scheme.

The rest of the civil servants appointed until 1993-08-31 will have the pension calculated according to the following formula:

Calculation formula: Global Pension = (P1+P2) x FS

meaning

P1=(R*T1)/Service of Table II

R = Meaningful remuneration (pensionable salary net of contributions towards the pension scheme), like in the former formula;
T1= Years and complete months of service until 2005-12-31 expressed in years, limited to the values of Table II

meaning

P2=RR*T2*N

RR=TR/(n*14)

TR= highest remunerations related to the time of service after 2005, limited to the years necessary to have a full career (all the service before 2006 is taken into account) (Table II)
n = number of civil years with contributions
T2 = 2% (until 2015-12-31) or between 2% and 2,3% (from 2016-01-01), according to the value of the remuneration
N = number of years (after 2005) with at least 120 days of contributions necessary to have a full career (all the service before 2006 is taken into account) (Table II). FS = sustainability factor

meaning

EMV 2006 / EMV year i-1

EMV 2006 = life expectancy at age 65 years in 2006

EMV year i-1 = life expectancy at age 65 years in the year of retirement - 1

Absolut and general disability

If the scheme member is unable to perform not only his Job but any profession, he benefits from more favourable rules, such as:

• Minimum period of membership (entitlement condition) of 3 years (instead of 5);
• Pension value at least equal to the minimum pension granted to private workers with the following career:

• The sustainability factor is not taken into account in the pension calculation until the age 65 years (the sustainability factor is never taken into account if the pensioner, in that moment, has been receiving a pension for at least 20 years - since he was 45 years old).

Early retirement

The early retirement pension is calculated the same way the ordinary pension is. The pension value thus obtained is then reduced 4,5% per year (until 2014) or 0,5% per month (after 2014) the member needs to reach the retirement age (see Table I);

For instance, if the scheme member could retire, normally, at age 62 years and 6 months (2010) and he is only 3 years and 1 day short to reach that age, the reduction will be corresponding to 4 years (18% of the total pension amount) and if he retires 1 day before he reaches 62 years and 6 months, the penalty will be corresponding to 1 year (4,5%).

If the scheme member is entitled to retire before reaching the age of Table I (due to special regulations), the reduction will take into account only the years and part of years needed to reach that special age limit (mind that the scheme member must be at least 55 years old and must have served for 30 years until his 55th aniversary for qualifying for early retirement).

The number of years considered in the reduction of the pension amount is itself reduced, until 2014, in one year for each period of complete 3 years or in 6 months for each complete year the member has completed above the time of service of the Table II, and, after 2014, in one year for each period of complete 3 years above 30 years of service (at 55 years of age).

Pension bonus

If the scheme member doesn't retire immediately after he meets the qualifying conditions, his pension will have a bonus.

That bonus corresponds to a given percentage of the retirement pension, being calculated according to the following formula: Pension x (Bonus 1 + Bonus 2)

meaning

Bonus 1 = M1 x P1	M1 = number of complete months from the moment that the scheme member met, for the first time, the qualifying conditions for early retirement (without reductions) and the moment he reached the age of Table I and 36 years of service (until the 31th December 2014) or 65 years of age and 15 years of service (after the 31th December 2014)	P1 = 0,65%
Bonus 2 = M2 x P2	M2 = number of complete months from the moment that the scheme member reached, for the first time, the age of Table I and 36 years of service (until the 31th December 2014) or 65 years of age and 15 years of service (after the 31th December 2014) and retirement, limited to his 70th anniversary	P2 = Percentage of Table IV

For bonus purposes, only efective service after 2007-12-31 is taken into account.

The maximum value of the bonified pension is 90% of the scheme member last pay.

Pension payment

Pensions are deposited in pensioners Bank accounts.

The pensioners living abroad can ask for the pension to be paid in their country of residence.

The annual pension payment schedule is established and made public available (namely in www.cga.pt) in the beginning of each year.

Pension prescription

Retirement pensions prescribe one year after the date they should have been paid.

If the pensioner does not withdraw its pensions for consecutive 3 years, the unitary right to the pension will prescribe and he will loose the status of retired / pensioner.