In three recent rulings, the Second Chamber of the Supreme Court of Justice confirmed the validity and constitutionality of the provisions related to employer contributions in the fields of old age and retirement, within the framework of the 2020 Retirement Savings System (SAR) Reform. These decisions reaffirm the use of a progressive rate to calculate contributions, ensuring that they comply with the principles of proportionality, equity, and tax legality.
It is important to recall that the 2020 reform established that, from 2023 to 2030, employer contributions to the Old Age and Retirement sub-account will gradually increase from 3.150% to 11.875%, depending on each worker’s Base Salary for Contributions (SBC). Meanwhile, employee contributions will remain at 1.125% of their salary. In total, the combined employer-employee contributions, along with the social quota, will rise from 6.5% to 15% during this period.
Key Points of the Jurisprudence
1. Proportionality and Equity of Contributions (Registry: 2029233)
The Court determined that the use of a progressive rate for calculating employer contributions is constitutional and does not violate the principles of proportionality and equity in taxation. This rate allows contributions to be adjusted according to the employer’s ability to pay, with higher rates applied to higher base salaries of workers.
2. Adequacy and Social Justice in Contributions (Registry: 2029232)
The jurisprudence confirms that progressive contributions are adequate and proportional, as they aim to ensure dignified pensions for workers. These measures are justified as they are based on the employer’s contributive capacity, without imposing disproportionate burdens.
3. Certainty in Contribution Calculation (Registry: 2029231)
The Court also ruled that the essential elements for employers to calculate contributions can be derived from a systematic analysis of the Social Security Law. Although not all details are explicitly stated in the disputed articles, the principle of tax legality is met by providing employers with sufficient certainty regarding how to determine their tax obligations.
Importance of These Decisions
These rulings uphold the constitutionality of the 2020 SAR reform, providing a clear and secure framework for calculating employer contributions in the fields of old age and retirement. Companies must ensure compliance with these provisions and adjust their practices to reflect the progressive rates established.
It is essential for employers to review their contribution calculation procedures in the fields of old age and retirement to ensure compliance with the new provisions of the Social Security Law. For personalized advice, feel free to contact our team at VGA.
