Portugal Social Security faces 1.9 billion euro deficit

A government-appointed working group has warned that reported surpluses in Portugal’s Social Security system are an “illusion.” Experts argue that current accounting methods provide an incomplete picture by failing to account for the liabilities of the Caixa Geral de Aposentações (CGA).

When viewing the pension system as a whole—combining Social Security with the CGA—the group calculates a combined deficit of approximately 1.9 billion euros by the end of 2025. The reported surpluses are attributed to factors such as the migration of public employees to the Social Security regime, migratory flows, employment expansion, and wage increases, rather than true systemic health.

The study suggests that the pension system's future is not promising and offers several recommendations, including correcting the pension update mechanism to ensure all pensioners receive adjustments at least equal to inflation.