Uruguay Cabinet Backs Bill to Allow Retirement at 60

By The Rio Times | Created at 2026-10-12 18:46:57 | Updated at 2026-10-12 22:28:09 4 hours ago

URUGUAY · POLITICS

Key Facts

—What happened Uruguay’s cabinet approved a bill for optional retirement at 60 on Monday.
—Who qualifies Workers with at least 30 years of social security contributions.
—The incentive Each year worked beyond 60 raises the pension, up to age 65.
—Lowest earners The bottom 30% of pensions keep pre-2023 benefit levels or better.
—US comparison Americans can claim Social Security at 62; full age is 67.
—Still open No cost estimate or bill text was published on Monday.

Uruguay’s left-wing government wants to soften the 2023 pension reform that is raising the general retirement age in steps to 65. The bill now goes to Parliament for debate.

Uruguay’s cabinet approved on Monday, 12 October, a bill letting workers with 30 years of contributions take retirement at 60. President Yamandú Orsi’s government will now send the draft law to Parliament, the presidency said.

The plan would partly undo a 2023 reform that raises the general retirement age from 60 to 65 in steps. For US readers, it is a test of fiscal discipline in a country whose dollar bonds carry investment-grade ratings.

What the Cabinet Approved

The decision came at a Council of Ministers that Orsi chaired on a national holiday. Alejandro Sánchez, the secretary of the presidency and Orsi’s top aide, announced it after the meeting.

The presidency’s release says the bill creates “a new optional retirement ground at 60 years of age.” It applies to people who have paid into the system for at least 30 years.

Orsi’s Frente Amplio, or Broad Front, a left-wing coalition, took office on 1 March 2025. The 2023 reform, Law 20,130, was passed under his conservative predecessor, Luis Lacalle Pou of the National Party.

Montevideo Portal, a leading Uruguayan news site, reported that the meeting took place at the Suárez y Reyes presidential residence. Sánchez said the bill fulfils a Frente Amplio campaign pledge and an agreement reached in a national social dialogue on pensions.

How Retirement at 60 Would Work

Workers aged 60 to 65 with 30 years of contributions could choose to retire early or keep working. Those who wait would receive a higher pension for each year they postpone, up to the general age of 65.

The release says the plan favours people with the lowest incomes. The bottom 30% of pensions could retire at 60 on terms equal to or better than those before Law 20,130.

Glass-fronted base of the Torre Ejecutiva in Montevideo with stone columns, workers in hard hats and traffic cones on the street

The rule would cover the state social security agency, Banco de Previsión Social (BPS), and private pension funds (AFAPs). Separate funds, such as those for professionals, notaries and bank staff, could join if their boards decide.

Sánchez stressed that this is a general law, unlike the narrow exceptions in the 2023 reform for some construction workers. “Each one will decide at the moment of retiring,” he said, according to Montevideo Portal.

He argued the option matters most for people in physically demanding jobs and for those who lose work late in life. “People are left without work at 62 and have to wait until 65,” he said, even with 30 years of contributions.

Why the Government Says It Can Afford It

The presidency’s release quotes Sánchez as saying the design “does not compromise the financial sustainability” of the social security system. He added that the average retirement age in Uruguay is already 63.

The cabinet also reviewed official figures showing poverty fell from 17.7% to 14.8% in the first half of 2026. Sánchez said about 95,000 people left poverty, while poverty among children under six fell from 32.4% to 24.9%.

What It Means for You

Uruguay sells US dollar bonds abroad, and pension spending is one of the costs that rating agencies watch closely. Investors will want the cost estimate and the funding plan before judging the bill.

The design echoes US Social Security, where people can claim early at 62 with a smaller monthly check. Americans born in 1960 or later reach full retirement age at 67, two years later than Uruguay’s general age.

Foreigners who work formally in Uruguay pay into the BPS and an AFAP like local staff. Whether they gain anything depends on reaching the 30-year contribution threshold, which few short-term expats will meet.

What Is Not Known

The government released no cost estimate, no bill text and no formula for the yearly bonus for waiting. It also gave no date for the first debate in Parliament.

It is unclear how the opposition parties that passed the 2023 reform will vote. Sánchez only said he expected lawmakers to give the bill priority.

What Comes Next

Sánchez said the bill will go to Parliament this week, though it is not yet decided which chamber gets it first. The cabinet also heard a progress report on a national science plan, whose final roadmap is due in May 2027.

Monday’s decision does not change anyone’s pension yet. The 2023 schedule, which reaches 65 for people born in 1977 or later, stays in force unless Parliament passes the new law.

Frequently Asked Questions

Can Uruguayans retire at 60 now?

Only people born in 1972 or earlier, who keep the old rules, can do so today. The 2023 reform raises the age in steps to 65, and the new option needs approval from Parliament.

Who could use the new option?

Workers with at least 30 years of contributions to the BPS and an AFAP could use it. Separate funds for groups such as professionals and bank staff may opt in.