Pension funds close 2021 with a deficit of BRL 36.4 billion, says Abrapp

The consolidated portfolio of closed supplementary pension entities recorded a net deficit of R$ 36.4 billion last year, according to data released this Wednesday (20) by the Brazilian Association of Closed Pension Entities (Abrapp). It was the worst performance since 2016, when the sector recorded a net deficit of BRL 53.5 billion.

According to Luis Ricardo Martins, president of Abrapp, the 2021 result was impacted by factors such as high inflation, fiscal uncertainties, low shares on the stock exchange and even fluctuations in the global economic scenario.

“An extremely difficult scenario that has already completed two years, but we are managing to recover despite all the difficulties”, said Martins.

The sector’s net deficit means that the entities are, together, with profitability below the target set for 2021.

Martins said he expects to send a proposal in the coming weeks to the National Superintendence of Complementary Pensions (Previc) on how to balance the plans, which usually involves extra contributions. For him, this equation would be unnecessary.

“Abrapp will formalize, based on a study, for Previc and CNPC (Conselho Nacional de Previdência Complementar) the request to freeze any attempt to solve the problem”, he said, during a press conference, adding that the deficit presented by the funds would be conjunctural. “In January and February of this year, our estimates show a recovery of BRL 5 billion in the system deficit.”

The total value of pension fund assets amounted to BRL 1.11 trillion at the end of 2021, which is equivalent to 12.8% of the Brazilian Gross Domestic Product (GDP). The accumulated profitability of the plans was 5.88%.