The reduction in pensions due to the sustainability factor, applied to certain early retirements, is expected to be 17.6% in 2025, up from 16.9% this year, based on calculations using data from INE.
This pertains to the provisional data from the National Institute of Statistics (INE) released today regarding life expectancy at age 65, an indicator used to determine the standard retirement age in the general Social Security regime and the sustainability factor.
In addition to this cut, there is a penalty of 0.5% for each month of early retirement compared to the legal retirement age.
The sustainability factor used in calculating old-age pensions in the general Social Security regime considers the evolution of life expectancy at age 65 between the year 2000 and the year prior to the start of the pension.
The current pension system includes several scenarios where the sustainability factor cut is not applied, even if the person retires before the normal age.
This applies to individuals who, while aged 60, complete 40 years of contributions, in which case the 0.5% penalty for each month of early retirement is applied.
Those who meet the conditions under the very long contribution career regime—where workers aged 60 or older with 46 or more years of contributions and who started working before 16—can retire without any penalties.
The provisional life expectancy at age 65, calculated annually by INE, is published in November, serving as a reference for determining the normal retirement age in the general Social Security regime and the sustainability factor to be applied to the statutory amount of old-age pensions in the general Social Security regime.
