Turning Brazil’s “Invisible Insured” Into Part of the Pension Solution

Brazil’s pension policymakers face a challenge that is becoming increasingly difficult to defer.

Around 38.5 million Brazilian workers, approximately one-third of the country’s labour force, operate in the informal economy. Sometimes described as the segurados invisíveis, or the “invisible insured”, they include ride-hailing drivers, housecleaners, street vendors, food delivery couriers and many others whose work is essential to Brazilian economic life.

For many of these workers, saving for retirement is difficult. Their incomes may be low, irregular or unpredictable, while immediate household needs understandably take priority. Pension products can also seem complex, inflexible or poorly suited to the realities of informal work. As a result, many informal workers do not contribute regularly to a pension and risk reaching old age without adequate retirement income.

This is not simply a question of income or access. It is also a question of behaviour.

Behavioural economics shows that retirement saving can be hindered by factors such as present bias, the tendency to prioritise immediate needs over future well-being, and status quo bias, the tendency to postpone or avoid action, particularly when decisions appear complex. For a worker managing an uncertain income, an unfamiliar pension product with fixed payments and distant benefits may be especially difficult to prioritise.

The consequences extend beyond individual workers and their families. Low pension participation among informal workers can increase long-term pressure on Brazil’s public finances, particularly as the population ages. Brazil’s public retirement benefits are also constitutionally linked to the national minimum wage, adding to the importance of ensuring the long-term sustainability and adequacy of the country’s pension system.

This is why increasing pension participation among informal workers should not be seen only as part of the problem. It can also become part of the solution.

Helping informal workers save for retirement could strengthen their financial security in later life, reduce future pressure on the Brazilian treasury and create new pools of long-term capital with the potential to support economic growth.

Support from the Coller Pensions Institute

This is exactly the type of challenge that the Coller Pensions Institute was created to address.

In June 2026, we signed a formal technical cooperation agreement with ABRAPP, the Associação Brasileira das Entidades Fechadas de Previdência Complementar, one of Brazil’s leading pension associations. Through this collaboration, we aim to combine ABRAPP’s deep knowledge of the Brazilian pension landscape with CPI’s international research and experience.

The partnership will explore the barriers that prevent informal workers from participating in pensions, draw lessons from relevant international experience and engage stakeholders from across the Brazilian pension ecosystem. It will also examine how potential solutions could be adapted to Brazil’s institutional, economic and cultural context.

Rather than assuming that a model successful elsewhere can simply be replicated in Brazil, the objective is to identify the elements that appear most promising, assess their local feasibility and translate them into a solution that can be tested in practice.

Learning from international experience

Our work will draw on the findings of the CPI White Paper, How Incentives Can Boost Pensions for Informal Sector Workers, written in collaboration with D3P Global.

The research reviewed pension programmes in 11 emerging and developing economies, from Malaysia to Mexico. It considered how different incentives, including free insurance, digital technology and “second-generation” automatic enrolment, have been used to encourage pension participation among informal workers.

The research found that programmes in Malaysia, Rwanda and Thailand had reached approximately 15% of their informal workforces through different combinations of incentives, considerably higher coverage than in many comparable countries. These experiences suggest that meaningful participation is possible when pension arrangements are designed around the circumstances, needs and behaviours of informal workers.

Financial incentives alone, however, may not be sufficient. Pension systems also need to make participation easy, understandable and relevant. Solutions such as automatic enrolment, simplified choices, timely reminders and well-designed contribution mechanisms can help workers translate their intention to save into action.

Exploring a micro-pension pilot

As part of the collaboration, CPI and ABRAPP will explore the potential development of a micro-pension pilot for Brazil’s informal workforce.

A pilot would offer an opportunity to test these ideas on a manageable scale. It could help:

Generate evidence about how informal workers respond to different programme features;
Demonstrate what practical barriers they face; and
Explore which approaches are most effective in encouraging initial enrolment and sustained contributions.

Placing workers’ experiences at the centre of the design process will be essential. A pension solution can only succeed if it works not merely in theory, but also in the daily lives of the people it is intended to serve.

Brazil is not alone

The challenges facing Brazilian policymakers are not unique.

Longer life expectancy and declining birth rates are placing pressure on pension systems around the world. At the same time, high levels of informality and low pension participation remain common, particularly in emerging and developing economies.

Solutions developed and tested in Brazil could therefore have relevance well beyond the country itself. By combining local expertise, international evidence and behavioural insights, the CPI–ABRAPP partnership has the potential to contribute to a broader understanding of how pension systems can better serve workers whose needs have historically been overlooked.

Brazil’s segurados invisíveis should not remain invisible to the pension system. With the right combination of evidence, collaboration and worker-centred design, they can become an important part of building a more inclusive and sustainable pension future, in Brazil and beyond.

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