In Portugal, the retirement age is 66 years and seven months. For next year, a reduction of three months is foreseen, that is, it passes to 66 years and four months. Before reaching this age, a pre-retirement scenario can be put in place, that is, being able to retire earlier or reduce working hours. Nonetheless, this option is not available to everyone. In this article, we address the main concepts inherent to pre-retirement, to whom it is intended and how to obtain it.
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What are the differences between pre-retirement and early retirement?
The terms pre-retirement and early retirement can raise some doubts, as they seem to be the same thing. However, they are not. Early retirement and early retirement are two different schemes for obtaining an old-age pension before the legal time.THE pre-reform it is based on a mutual agreement between the worker and the employer, that is, if the employer does not agree, this cannot be requested. This is a benefit that several companies have adopted, especially when they want to reduce the workforce. Thus, they reach an agreement with the workers, despite the fact that they do not meet the conditions to ask for a pension under the normal regime. THE early retirement it depends on the worker’s will, although he has to fulfill some requirements to be able to ask for it. However, this regime, since it is about accessing the old-age pension before the legal age, leads to penalties in the amount you will receive. Read also: Is it mandatory to retire for old age?
What is pre-retirement?
Early retirement is based on a agreement made between the worker and the employer, for individuals aged 55 years of age or older🇧🇷 This agreement can have two aspects, it can lead to a reduction in working hours, or it can even stop working, maintaining the monthly salary. In order to carry out this agreement, it is necessary that it be made in writing and signed by both parties, worker and employer. Furthermore, must contain the following information:Identification and address of both parties, with signatures Date of beginning of pre-retirement Monthly amount to be received New working hours, in case they agree on a reduction of the same With regard to the two types of pre-retirement, there are some important information. If you choose reduction of working hours🇧🇷 the worker’s rights with Social Security remain unchanged.On the contrary, if you choose to suspend your work duties, you are prevented from accessing subsidies, such as illness (regardless of its nature), unemployment or parents. Read also: Pre-retirement: What does it consist of, who can access it and what benefits do you have?
Who is it for?
There are two important requirements to be able to obtain pre-retirement. The first is be at least 55 years of age🇧🇷 The second, and since it is an agreement between employer and employee, the company must agree to the order and authorize it🇧🇷 After obtaining pre-retirement, you will have access to this benefit until the day you reach the normal retirement age. It is important to note that if your social protection scheme does not cover situations of old age, disability or death, will not be able to access pre-retirement🇧🇷 Read also: Pensão na hora: Know how to get retired faster
How to get this benefit?
O pre-retirement request must be made by the employer to Social Security. The employer must also ensure that both parties have signed the agreement. In addition to applying for early retirement, the employer must also deliver a statement of remuneration for the month in which that scheme came into force🇧🇷 After completing all these steps and, if all conditions are met, the application is ready to be approved by Social Security. As a general rule, this Approval must take place within 30 days.Also read: Pre-retirement: What the law says about this agreement with the employer
What rights do these workers have?
The fact that a worker is in a pre-retirement situation, does not mean that you cannot carry out another remunerated professional activity. You can do so, as long as it is not for the same employer with whom you have a pre-retirement agreement. Furthermore, if pre-retirement pay is not paid for another 30 days, the employee may resume the exercise of his/her duties or terminate the contract. If you decide to resume the exercise of your duties, you can do so without any prejudice to seniority. If, on the other hand, you choose to terminate the contract, you will be entitled to compensation. This compensation will correspond to the total amount that you would be entitled to receive from pre-retirement until the legal retirement age. Read also: Social old-age pension: Find out what amount you can receive
What is the value of pre-retirement?
To calculate the pre-retirement value, the last remuneration paid to the worker by the employer. However, the value of the pre-retirement benefit must correspond, at least, to 25% of this remuneration and, at most, to the value of the last salary. If there is any salary increase while you are in the pre-retirement period, the amount will be updated accordingly. both the worker and the employer may deduct less for social security. However, despite this reduction, both will have to continue to pay contributory fees. Contrary to what you might think, these rates are applied to the amount that served as the basis for determining the pre-retirement benefit and not to the benefit itself. Ie, the rates are based on the last salary earned by the employer. Also read: Renovation: when to ask and how to prepare for this phase of life?
When does pre-retirement entitlement end?
This regime may terminate in some situations.🇧🇷 For example, if the worker returns to full-time work for the employer, the pre-retirement entitlement ceases. In the same way, this regime ends in the event of the end of the employment contract, or if the worker becomes a pensioner (due to having reached retirement age or due to disability). termination of contract, you should pay attention to the clauses it contains. If the contract contains clauses referring to indemnities or compensation, these payments are due to the worker until he reaches the legal retirement age. Nonetheless, for the purpose of these indemnities, the value that the worker was receiving from pre-retirement is used as a reference. and not what you received previously. Also read: 7 ways to prepare for retirement
A professional writer by day, a tech-nerd by night, with a love for all things money.