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Retirement Pension Scheme
2024-09-16
Eligibility to Join the 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.
Employees' Contribution
Contribution rate
The monthly contribution rate to CGA is 11% of the pensionable remuneration (8% for retirement and 3% 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).
- 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 11% 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 incapacity;
- 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.
Time of Service Counting
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 8% 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).
Other pension schemes membership
Other pension schemes membership periods might be considered for the following purposes, as long as they don't overlap CGA own periods:
- Vesting periods;
- Entitlement conditions;
- Pension bonus;
- Minimum pension (the minimum pension is granted only when the retired doesn’t receive other pensions).
Retirement
Definition
Retirement pension is the benefit granted to the scheme members (either active or deferred) 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;
- Incapacity;
- 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:
- 15 years of service and the normal retirement age (INAPV), of 66 years and 4 months (2024);
- The personal retirement age (IPAPV), according to Table I (INAPV is reduced 4 months for each year of service above 40 years), with the minimum of 60 years:
| Service (years) | Personal retirement age |
|---|---|
| =>41 e <42 | 66 years |
| =>42 e <43 | 65 years and 8 months |
| =>43 e <44 | 65 years and 4 months |
| =>44 e <45 | 65 years |
| =>45 e <46 | 64 years and 8 months |
| =>46 e <47 | 64 years and 4 months |
| ... | ... |
- 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 incapacity for work;
- Punishment with the penalty of compulsory retirement;
An early retirement pension (voluntary type of retirement) is granted when the scheme member meets one of the following conditions:
- Had, at least, 36 years of service during 2005 (accrued rights)
- Is, at least, 60 years old, as long as he had served 40 years before his 61st anniversary (new);
- Is, at least, 55 years old, as long as he had served 30 years until his 55th anniversary (old) – only scheme members that cannot apply for the new are eligible;
- Is, at least, 60 years old and has served for 48 years, regardless of scheme affiliation age (long career 1);
- Is, at least, 60 years old and has served for 46 years, if the scheme affiliation occurred under the age of 17 (long career 2);
- Is able to retire before reaching the normal or personal retirement age under a special scheme.
- Is, at least, 60 years old and has had, during the last 15 years or more of his working contributory career, and still has a disability of 80% or higher.
Deferred scheme members can only apply for early retirement if they have, at least, 5 years of membership and as long as they don’t meet the retirement entitlement conditions of any other mandatory pension scheme.
Retirement pension scheme
The voluntary retirement pension not related to incapacity (such as the early retirement due to disability) is granted according to:
- The pension scheme rules at the time of pension claim submission 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
Civil servants retire upon their last 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, in principle, calculated upon the salary of the job the member had at 2005-12-31.
However, there are some situations in which the pensionable remuneration is:
- The average of pensionable remuneration over the last 2 years (2004 and 2005) (more than one job / position in that period);
- The average of pensionable remuneration during the last 3 years (2003, 2004 and 2005) (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, 36 years of service during 2005) or to 40 years.
The scheme members that had, on the 31st December of 2005, at least, 36 years 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 at a rate of 10%)
T = Years and complete months of service expressed in years, with the maximum of 36
The meaningful remuneration (R) is the sum of:
A. 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;
B. 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
meaning
P1 = (R x T1) / 40
R = Meaningful remuneration (pensionable salary net of contributions towards the pension scheme at a rate of 11%), like in the former formula (salary until 2005 only);
T1= Years and complete months of service until 2005-12-31 expressed in years, limited to 40 years
meaning
P2 = RR x T2 x N
RR = TR / (n x 14)
TR= highest remunerations related to the time of service after 2005, limited to the years necessary to have a full career of 40 years (all the service before 2006 is taken into account).
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 of 40 years (all the service before 2006 is taken into account).
Sustainability factor
Pensions granted to civil servants that haven't met yet the normal retirement age yet are reduced by a sustainability factor, according to life expectancy at age 65 years:
- The new sustainability factor is applied to both early retirement (granted under the article 37.º-A of Statut of Retirement or under special schemes rules) and compulsory retirement pensions from the moment they are granted:
Calculation formula: EMV2000 / EMVyear i-1
meaning:
EMV2000 life expectancy at age 65 years in 2000;
EMVyear i-1 life expectancy at age 65 years in the previous year to retirement.
Both age limit, early retirement (only new, long career and disability) and incapacity pensions are not reduced by the sustainability factor, despite being granted to scheme members that haven't met the normal or the personal retirement age yet.
Absolut and general incapacity
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 (40 years);
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 (for members that had 36 years of service in 2005-12-31) or 0,5% per month (for the other members) the member needs to reach the normal or the personal retirement age.
For instance, as the scheme member could only retire at age 66 years and 4 months 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 66 years and 4 months, the penalty will be corresponding to 1 year (4,5%).
The number of years considered in the reduction of the pension amount is itself reduced in one year for each period of complete 3 years the member has completed above 36 years of service (only for members that had 36 years of service in 2005-12-31).
Long career and disability early retirement
The long career and the disability early retirement pension is calculated the same way the ordinary pension is. It doesn't have any early retirement penalties, despite being granted before the scheme member reaches the normal and the personal retirement 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
Meaning
Bonus number of complete months between the moment that the scheme member reached the normal retirement age and 15 years of service and the moment of retirement, limited to his 70th anniversary x the percentage of Table I
| Bonus M x P | |
|---|---|
| M = | Number of complete months between the moment that the scheme member reached the normal or the personal retirement age (as long as he already had 15 years of service) and the moment of retirement, limited to his 70th anniversary |
| P = | Percentage of table II |
| Career (years) | Percentage (%) |
|---|---|
| 15 to 24 | 0,33 |
| 25 to 34 | 0,50 |
| 35 to 39 | 0,65 |
| Over 39 | 1,00 |
For bonus purposes, only real service after 2008-01-01 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.