Program’s second phase to provide training and modernize pension systems
The Inter-American Development Bank (IDB) approved loan for up to $10 million to the Brazilian government to modernize the pension system management for civil servants under the Public Sector Pension Plan (RPPS, in the Portuguese acronym).
The program’s first phase, which was completed in 2010, identified the need to strengthen the National Social Security Institute (INSS), within the Pension Policy Secretariat, to expand its capacity to provide technical assistance to local governments. This stage of the program, which will be carried out by the Social Security Ministry, will focus on strengthening management of RPPS at the local and regional level to improve their administration capacity and ability to generate information about the system’s beneficiaries.
The IDB operation will strengthen the public sector pension plan of participating federative entities, which presently lack adequate systems and structured information needed for to managing and formulating pension policy. The lack of trustworthy information causes financial losses as well as difficulties in meeting the needs of civil servants and their relatives.
The program will support the updating of the records of active employees, inactive employees, and pensioners, which will result in significantly lower costs and improved financial sustainability of the system. At the end of this program, at least 50 additional local governments are expected to be provided with technology systems needed for RPPS management, and have the Integrated Pension Management System operating. Some 1,040 municipal and state employees and 240 RPPS managers will receive training in finance, accounting, and information technology.
Moreover, the program will support the Pension Policy Secretariat with 12 diagnostic studies and research. In addition, distance learning courses will be offered to 150 local governments, and training will be provided for 500 pension auditors.
According to the IDB project team leader Claudete Camarano, the program will help instill a culture of public management focused on providing quality services to pensioners and their families. “In addition, we will seek to improve municipal and state accounts and produce and disseminate specialized knowledge to meet the challenges of a social security system operating in a dynamic society in terms of labor, social conditions, and demographics," she said.
The IDB loan is comprised of a one-time payment due in 15 years and an interest rate based on LIBOR.