July 2022
20Jul

Brazilian insurance regulator publishes guidelines on sustainability requirements for the insurance sector

The Brazilian Superintendence of Private Insurance (“SUSEP”) published Regulation No. 666/2022, setting forth sustainability requirements applicable to the Brazilian insurance sector. Its goal is to establish guidelines for management of risks that are directly related to ESG policies of insurance and capitalization companies, local reinsurers and pension funds. Pursuant to the new requirements, regulated entities must ensure that sustainability risks are properly managed, particularly by preparing a triennial materiality assessment identifying, assessing and classifying the risks to which the entities...

July 20, 2022
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February 2022
17Feb

Earnings Inequality and Dynamics in the Presence of Informality: The Case of Brazil

By Niklas Engbom, Gustavo Gonzaga, Christian Moser & Roberta Olivieri Using rich administrative and household survey data spanning 34 years from 1985 to 2018, we document a series of new facts on earnings inequality and dynamics in a developing country with a large informal sector: Brazil. Since the mid-1990s, both inequality and volatility of earnings have declined significantly in Brazil’s formal sector. Higher-order moments of the distribution of earnings changes show cyclical movements in Brazil that are similar to those...

February 17, 2022
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November 2021
26Nov

Brazilian bill seeks to make infrastructure bonds appealing to global pension funds

Stakeholders in Brazil’s infrastructure sector are hoping for the senate to approve a bill that extends tax breaks on infrastructure debentures, in order to attract global players to invest in financing long-term projects. The country's lower house approved the bill in July and it is now being considered by the upper house. "We’re carrying out several bidding processes that can’t be financed solely with bank financing. We’ll need deep engagement from the capital market, and infrastructure debentures will play a key...

November 26, 2021
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May 2021
04May

Union Demands CPPIB Ditch Brazil Water Privatization Involvement

Canada’s largest union is demanding that the $387.1 billion Canada Pension Plan Investment Board (CPPIB) abandon its investment in a private water and sewage treatment service provider in Brazil. The Canadian Union of Public Employees (CUPE) said CPPIB is taking part in a “risky” sell-off of public water and sewage infrastructure being led by controversial President Jair Bolsonaro. “The involvement of the CPPIB in support of Bolsonaro’s privatization program would serve to legitimize his disregard for the needs of the...

May 4, 2021
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September 2020

15Sep

(Mis)Allocation Effects of an Overpaid Public Sector

By Tiago Cavalcanti, Marcelo Rodrigues Santos There is a large body of evidence showing that for many countries the structure of wages and pensions and the labor law legislation are different for public and private employees. Such differences affect the occupational choice of agents and might generate some type of misallocation. We develop a life-cycle model with endogenous occupational choice and heterogeneous agents to study the implications of an overpaid public sector. The model is estimated to be consistent...

September 15, 2020
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August 2020

12Aug

Fitch Ratings recommendations for Brazil’s Pension Deductible Loan Regulation: Credit Neutral

Changes approved by the Brazilian Social Security National Council (Conselho Nacional de Previdencia Social, CNPS) to the pensioner deductible loan regulation in response to the economic impacts of the coronavirus pandemic are expected to be Credit Neutral for Fitch's rated portfolio of pension deductible loan (PDL) securitizations, says Fitch Ratings. Proposed changes, which seek to increase availability of credit in the economy, consider (i) increasing the maximum credit limit to 1.6x (from 1.4x) of the obligor's monthly income for...

August 12, 2020
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May 2020
15May

Selfies can help Brazil create a super supplementary pension

By Arun Muralidhar, Robert C. Merton, Alexandre Vitorino Brazilian policy makers and researchers have discussed the introduction of a complementary pension system to complement the Regime Geral de Previdência Social (RGPS), specially for those that want a retirement income above the RGPS ceiling. This article first recommends that the complementary system must be SUPER (Simple, Universal, Portable, Efficient with low cost and Robust Regulatation). It then proposes the adoption of a financial innovation called SeLFIES (Standard-of-Living, Forward-starting, Income-only Securities),...

May 15, 2020
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October 2019

23Oct

Brazil Pension Reform Clears Congress, Stocks Hit New Highs

Brazil's Senate on Tuesday approved a sweeping overhaul of the country's pension system to stabilize public finances and restore business confidence, setting up President Jair Bolsonaro to sign his keystone economic proposal into law. Read also Japan. No excuse for inaction on pension reforms The Senate approved the main text of the landmark pension reform by a margin of 60-19 in a late Tuesday session before moving on to consider amendments. Read also Irish pensions need urgent reform, industry specialist...

October 23, 2019
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04Oct

Why the Future of Brazil’s Economy Rides on Pensions

Latin America’s largest economy, Brazil, is closer than ever to overhauling its costly pension system. That’s been the focus of the first sustained legislative drive by President Jair Bolsonaro, his economic team and allies. Efforts to muster support for a major reform failed under previous administrations. Now, Brazil’s Senate is set to approve changes that could boost the nation’s public finances and open the door to a virtuous cycle of expansion. 1. Why is pension reform so important? Brazil’s pension...

October 4, 2019
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02Oct

Brazil Senate approves pension reform in first-round vote

Brazil’s Senate approved the main text of a pension reform bill in a first-round vote on Tuesday, clearing another key hurdle for the government’s bid to narrow its massive budget gap. The main text passed with a vote of 56 in favor - a comfortable margin above the 49 votes required - with 19 opposed and one abstention. Only 76 of 81 senators were present. The Senate is expected to consider amendments to the bill on Wednesday before it...

October 2, 2019
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