The public pension system appears to be getting it from both ends in some countries.

Public pensions were designed on the pretence that those working would pay for the benefits of those retired, the population would keep growing, paying for pensions in the future would not be a problem, or so they thought.

Of course the spectre of falling birth rates and higher competition for high-skilled immigrants has long put politicians on notice that things in future would not turn out as originally planned. Now it seems, longer life expectancy and family breakdown are also taking an effect on the pensions of at least one country, Brazil.

A story on the wires tells of how older, divorced men in Brazil are not only remarrying but also choosing women much younger, it’s called the “Viagra effect.”

From the story:

According to the INSS report, two out of three men who are separated remarry; while only one out of three separated women find a new husband.

Of the separated men, 64 per cent of those aged over 50 remarry women younger than them. In the 60-64 age range, the proportion is 69 per cent.

And the marked preference is for women aged 30 years and younger.

So how does this challenge the pension system? Widows pensions. The bureaucrats that designed the system expected wives of deceased men to get their late husband’s pension for maybe 15 years. With some men marrying women 30 years their junior, the “Viagra effect” is costing Brazil’s pension system plenty.

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