A Previdência Complementar é, de fato, Complementar?

Due to the deficit in the retirement accounts, pension reforms are discussed in many countries. However, most countries consider reforms that seek to extend working years, reduce the value of retirement or increase social security contribution rates. Just a few countries implemented a transition from the pay-as-you-go to the fully-funded system. In this sense, it is useful to analyse if the fully-funded system, which is characteristic of private pensions, is substitute or complementary to the pay-as-you-go system, which is characteristic of social security. If they are perceived as substitutes, then there is an opportunity for future pension reforms to implement a system transition. With this questioning and using Brazilian data, this work obtains strong evidence that these forms of pension are perceived as substitutes, with substitution rates varyng from 8.15% to 18.0%. For this reason, there is space for future social security reforms to propose a change in the way that pensions are financed instead of just changing the parameters of current systems.