Many Portuguese people with a contribution career that began before 2002 may be covered by a pension calculation mechanism that is often ignored: the P1/P2 regime. Technically, this regime applies to beneficiaries registered with Social Security until December 31, 2001 and combines two calculation installments: P1 (calculated according to the old rule) and P2 (calculated based on the contribution career).
The essential idea is simple: the final value is a weighted average of the two installments, with more weight given to the one corresponding to more years of career before/after the 2002 cutoff, and in some cases P1 can push the value upwards.
What is P1/P2 and who is covered
For beneficiaries registered with Social Security until 31‑12‑2001, the statutory pension (P) results from the combination:
P = (P1 × C3 + P2 × C4) / C (DL n.º 187/2007, art. 33.º).
• C3: years of career with remuneration records up to 31‑12‑2001
• C4: years of career with remuneration records from 01‑01‑2002
• C: total years of career with record of remuneration relevant to the rate (DL no. 187/2007, *art. 33).
Important note: for “weight” purposes (C3/C4), all years count, even if they exceed 40; There are specific rules for the formation of the reference rate and remuneration (DL no. 187/2007, art. 33 and art. 28).
Historical note from the regime itself: until 31-12-2016 the previous version of weighting existed (C1/C2); since 01‑01‑2017, C3/C4 has been used (DL no. 187/2007, art. 33).
How P1 is calculated (the “best 10 out of 15” rule)
The reference compensation used for P1 follows the old rule:
• RR(P1) = R / 140, where R is the total remuneration of the 10 calendar years with the highest values, within the last 15 years of the contributory career up to the month in which the pension started, with remuneration record (DL no. 187/2007, art. 28, no. 3).
Then, portion P1 is:
• P1 = RR(P1) × global P1 rate, with the annual rate being 2% per year, with limits of 30% (minimum) and 80% (maximum) (DL no. 187/2007, art. 34).
P1 limit: the 12×IAS ceiling (and exceptions)
There is a specific upper limit for P1:
• P1 is limited to 12×IAS, with two relevant safeguards:
- If P2 is greater than P1, no limit applies to the P1 portion;
- If P1 and P2 are greater than 12×IAS and P1 is greater than P2, then the pension will be calculated in accordance with article 32 (DL no. 187/2007, art. 101).
How P2 is calculated (contribution career, up to 40 years)
The “normal” reference salary (P2 basis) is:
• RR = TR / (n × 14), where TR is the total revalued annual remuneration for the entire contributory career and n is the number of years registered, up to a limit of 40.
• If there are more than 40 years of registration, the 40 highest revalued annual remunerations enter (DL no. 187/2007, art. 28, no. 1 and 2).
Revaluation of remunerations: it really counts (and is published by ordinance)
Before calculating RR(P1) and RR(P2), the recorded remunerations are revalued using legal coefficients (DL no. 187/2007, art. 27).
In practice, these coefficients are set every year by Ordinance (Diário da República) and apply to pensions starting in that year, for example, in 2025 this was done by Ordinance no. 83/2025/1, which approved the coefficients for pensions starting in 2025 and determined that the diploma “takes effect from January 1st to December 31st, 2025” (art. 4).
In 2026, the logic is the same: for pensions starting in 2026, the coefficients defined in the annual ordinance applicable to 2026 (to be published in the Diário da República) must be used. It is also important to take into account that these ordinances can be published after the beginning of the year and, when this happens, there may be reprocessing/recalculation and retroactive adjustments to pensions already allocated, a situation highlighted in a document from the Court of Auditors published in Diário da República (Opinion no. 2/2019).
Sustainability factor and other rules
After calculating the statutory amount based on the reference remuneration and the global rate, the *sustainability factor, when applicable, can also be applied as a multiplier of the final value (DL no. 187/2007, art. 26, no. 2 and art. 35).
Why P1/P2 can be advantageous (no promises)
P1 uses the logic of the 10 best years within the last 15, which may favor careers in which there were periods with higher salaries. P2 looks at the contributory career in a more comprehensive way. In the end, the result is weighted by the years before/after 2002 (DL no. 187/2007, art. 33).
There is also an essential point to manage expectations: the law provides a safeguard — when the pension calculated under the terms of article 32 is more favorable, it must be guaranteed (DL no. 187/2007, art. 33, no. 5).
What to do to confirm if you benefit
1. Consult your contribution career and confirm if there are any gaps/years with incomplete records (as this affects averages and weightings).
2. Use the Pension Simulator to estimate values based on the rules applicable to your case.
3. If you detect omissions, try to regularize them before submitting the request, the calculation depends on what is actually registered.
Long careers and personal age (helpful note)
Separately from the P1/P2 calculation, there is the personal age mechanism: the access age can be reduced by 4 months for each calendar year that exceeds 40 years of contributory career, without allowing access before the age of 60 (DL no. 187/2007, “personal age” rule).
What could translate into a more favorable pension value is the P1/P2 regime for beneficiaries registered with Social Security until 31-12-2001, but there are no “tricks”: the decisive thing is to have complete records and understand how the law weighs the installments.
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