December 6, 2016 / 2:52 PM / 2 years ago

UPDATE 1-Brazil expects to save $200 bln by 2027 with pension reform

(Adds details on pension plan)

BRASILIA, Dec 6 (Reuters) - Brazil’s government expects to reduce expenditures by about 687 billion reais ($200 billion) between 2018 and 2027 with proposed changes to its costly pension system, the government’s pension secretary said on Tuesday.

The proposal to overhaul Brazil’s pension system, seen by investors as the most important of President Michel Temer’s agenda to shore up the country’s public finances, would automatically adjust up the minimum age of retirement as the population’s life expectancy grows, pension secretary Marcelo Caetano said.

Other changes would include removing tax exemptions on revenues from exports and demand rural workers to start contributing to the pensions system, Caetano told journalists.

The controversial pension reform plan at the heart of Temer’s austerity drive aims to shore up an economy mired in its worst recession on record by bringing under control a widening budget deficit. Temer unveiled the reform on Monday by saying it was necessary to avoid a collapse in the pension system.

$1 = 3.4445 Brazilian reais Reporting by Alonso Soto; Editing by Bill Trott

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