Many Portuguese people with a long-standing contributory career may be covered by a pension calculation mechanism that is often ignored: the P1/P2 regime. According to Decree-Law No. 187/2007 and the Social Security Practical Guide, this regime applies to beneficiaries enrolled in Social Security until December 31, 2001 and combines two calculation installments: P1, calculated according to the old rule, and P2, calculated based on the contributory career according to the general rules.
The essential idea is simple: the final value results from a weighted average between the two installments, giving more weight to the part that corresponds to more years of career before or after the 2002 cutoff. In certain cases, this combination may be more favorable than a calculation purely made according to the new rules. Even so, the law itself provides an important safeguard: if the full calculation under the rules of article 32 is more favorable, this is the value that must be guaranteed.
What is P1/P2 and who is covered
For beneficiaries enrolled in Social Security until December 31, 2001 and with a pension starting after January 1, 2017, the statutory pension results from the formula P = (P1 × C3 + P2 × C4) / C, in accordance with article 33 of the . C3 corresponds to the years of the contributory career completed up to December 31, 2001, C4 to the years completed from January 1, 2002 and C to the total of relevant years of the contributory career.
The law itself adds an important detail: for the purposes of the weight of C3 and C4, all years of the contributory career count, even if they exceed 40. As for the reference remuneration and the pension formation rate, there are their own rules, including specific limits.
How is P1 calculated
The reference salary used for P1 follows the old rule of the 10 best years within the last 15 years of the contributory career until the month in which the pension starts. According to article 28 of Decree-Law No. 187/2007, this remuneration is obtained using the formula R/140, where R represents the total remuneration for the 10 calendar years with the highest values within this universe.
Then, the P1 portion is obtained by multiplying this reference salary by the overall pension formation rate. Article 34 sets an annual rate of 2% for each calendar year with remuneration registration and determines that the global rate has minimum and maximum limits, respectively, 30% and 80%.
P1 limit: the ceiling of 12 times the IAS
There is a specific upper limit for P1. According to article 101 of Decree-Law No. 187/2007, P1 is limited to 12 times the IAS, but with two relevant exceptions: if P2 is greater than P1, no limit applies to that portion; and, if P1 and P2 are both greater than 12 times the IAS and P1 is greater than P2, the pension will be calculated in accordance with article 32. In 2026, the IAS is 537.13 euros, in accordance with Ordinance No. 480-A/2025/1.
How is P2 calculated
The normal reference remuneration, which serves as the basis for P2, is defined by article 28 as TR / (n × 14), where TR represents the total revalued annual remuneration of the entire contributory career and the number of calendar years with remuneration records, up to a limit of 40. If there are more than 40 years with registration, the 40 highest revalued annual remunerations are included.
This means that P2 looks at the contributory career more comprehensively, unlike P1, which favors the 10 best years within the last 15. This is precisely why the combination between the two can benefit some careers, although not in all cases.
Revaluation of remunerations: it really counts
Before determining the reference remuneration of P1 and P2, the registered remunerations are revalued in accordance with article 27 of Decree-Law No. 187/2007. For pensions starting in 2026, the applicable coefficients have already been established by Ordinance No. 88/2026/1, published on February 23, with effects from January 1 to December 31, 2026.
Sustainability factor and other rules
After the value of the statutory pension has been determined, the social security factor may still be applied, when applicable. But the law also establishes several safeguards. Since 2019, article 35 of Decree-Law No. 187/2007 excludes from this factor, among others, pensions awarded at the normal age or at the personal age of access to the pension, as well as certain early pensions provided for by law.
Why P1/P2 can be advantageous, without 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 broader way. In the end, the result is weighted by the years before and after 2002. But there are no automatisms: the effect always depends on the beneficiary’s specific career.
There is also an essential point to manage expectations: the law guarantees that, if the pension calculated according to the rules of article 32 is more favorable, that is the amount that should be granted. In other words, the system does not work as a new “bonus”, but as a calculation mechanism that seeks to protect those with older contributory careers.
What to do to confirm if you benefit
Those who are approaching retirement should start by consulting their contribution career and confirming whether there are any gaps or years with incomplete records, as this affects averages and weightings. Social Security also offers simulators and consultation tools that help estimate the likely value of retirement.
If you detect omissions in your contribution career, the ideal is to regularize them before applying for the pension. When calculating retirement, what is actually registered and validated counts.
Long careers and personal age
Separately from the P1/P2 calculation, there is also the mechanism of personal pension access age. According to Decree-Law No. 119/2018, this age results from a reduction of 4 months for each calendar year that exceeds 40 years of contributory career with relevant remuneration record, without allowing access before the age of 60. In 2026, the Social Security Practical Guide continues to summarize this rule in the same terms.
Basically, what could translate into a more favorable retirement value for those who were enrolled in Social Security until December 31, 2001 is not an extraordinary increase now created, but the correct application of the P1/P2 regime when calculating retirement. And, as almost always happens in these cases, the decisive factor remains having a well-recorded contribution career and understanding how the law weighs each installment.
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