Brazil: New Rules For Investments Of Brazilian Pension Plans

Brazilian Pension Plans are occupational pension plans, organized as closed entities, used to finance private pension benefits, structured in the form of pension funds and sponsored by corporations. This type of Pension Plan in Portuguese is denominated "Entidade Fechada de Previdência Complementar- EFPC" (Closed Entity of Complementary Security). They can offer defined contribution (DC) pension benefits or defined benefit (BF) type pension benefits. These Pension Plans are not-for-profit organizations by definition and are ruled by a special Government Agency, the Secretariat of Complementary Security ("Secretaria da Previdência Complementar – SPC") under the Ministry of Social Security.

The rules, thresholds and restrictions applied to the investment of the proceeds of these Pension Plans are issued, amended and consolidated from time to time by the Brazilian Monetary Council (Conselho Monetário Nacional – CMN).

On September 24, 2009 the CMN approved new regulations which are attached to CMN Resolution 3792, of the same date, authorizing the Pension Plans to invest more aggressively in variable income instruments, structured investments and investments abroad. The main provisions are commented herein.

According to these new regulations, the investments are classified in the following categories: (i) fixed income; (ii) variable income; (iii) structured investments; (iv) offshore investments (i.e. investments abroad/outside Brazil); (v) real estate; and (vi) transactions with participants.

Fixed income investments are: Federal, State or Municipal government bonds; fixed income instruments and securities issued or with the co-obligation guarantee of financial institutions or similar entities duly authorized to operate by the Central Bank of Brazil (Banco Central do Brasil – Bacen); saving deposits at entities duly authorized to operate by Bacen; fixed income instruments and securities issued by publicly-held corporations, including Export Credit Notes (Nota de Crédito à Exportação – NTC) and Export Credit Certificates (Cédula de Crédito à Exportação – CCE); bonds of multilateral agencies issued in Brazil; receivables certificates issued by securitization companies; and units (cotas, also referred to in Portuguese as quotas) of credit rights investment funds (fundo de investimento em direitos creditórios – FIDC) or of credit funds which invest in such credit rights investment funds (fundo de investimento em cotas de fundos de investimento em direitos creditórios – FICFIDC).

Instruments or securities of other issuers which are not listed in the previous paragraph may only be acquired by Pension Plans if the following conditions are met: (a) there is a co-obligation of an entity duly authorized to operate by Bacen; (b) there is an insurance coverage that does not exclude acts of God or force majeure events and secures payment of the indemnity no longer than 15 days after the maturity date; (c) there is also a guarantee in rem in an amount equivalent at least to the agreed value of the debt, in the case of a real estate credit certificate (cédula de crédito imobiliário); or (d) if the securities are issued by a certified warehouse, in the case of agribusiness warrants (Warrant Agropecuário – WA).

Variable income investments are: shares issued by publicly-held corporations and their corresponding subscription bonuses, subscription receipts and certificates of deposits; units of index funds based on a basket of shares of publicly-held corporations traded at the stock exchange; instruments and securities issued by special purpose companies (Sociedade de Propósito Específico – SPE); debentures with profit participation rights; potential additional construction certificates (Certificado de Potencial Adicional de Construção – CEPAC), with the onerous grant and the transfer of the right to build; Certified Emission Reductions certificates or CERs (Reduções Certificadas de Emissão – RCE) or carbon credits of the voluntary market, traded at the stock, commodities and futures exchange or organized over-the-counter market, or registered in a registry, custody or financial liquidation clearing and settlement system duly authorized by Bacen or CVM, as the case may be; and gold certificates negotiated at an accepted standard at the commodities and futures exchange.

The SPE must be formed to finance new projects, for a fixed term of duration, and shall have its activities restricted to those provided for in the corporate purpose, as established and defined at the time of the incorporation.

Structured investments are: units of private equity funds (fundo de investimento em participações - FIP) and of funds which invest in units of private equity funds; units of emerging companies investment funds (fundo de investimento em empresas emergentes- FIEE); units of real estate investment funds; and units of investment funds and of funds which invest in such investment funds classified as multimarket (multimercado). The regulations of these investment funds must comply with the CVM rules, and obey the limits, requirements and conditions established for non-qualified investors1.

Offshore investments are: assets issued abroad which belong to portfolios of funds incorporated in Brazil in accordance with the CVM regulations; units of investment funds and of funds which invest in investment funds classified as foreign indebtedness (dívida externa); units of funds of index abroad trade at the Brazilian stock exchange; certificates of deposit of securities linked to shares issued by closely-held corporations or similar entities with head office abroad, the so-called Brazilian Depositary Receipts (BDR), in accordance with the CVM regulations; and shares issued by foreign companies headquartered in the countries located at the MERCOSUR region (Mercado Comum do Sul – MERCOSUL).

Real estate investments are: development projects (empreendimento imobiliário); real estate for lease or rental; and any other types of real estate.

Transactions with participants are the cash loans granted or real estate finance made with financial resources of the pension benefits by the Pension Plan to its own participants and their beneficiaries, as well as the securities linked to receivables originated directly or indirectly of these transactions. The agreements shall contain a clause of savings reserve deposit (consignação da reserve de poupança) and the real estate finance contracts shall have clauses of trust receipt (alienação fiduciária) of the financed asset of contracting insurance policy with coverage in cases of death or permanent disability of the borrower and physical damage of the real estate.

The current thresholds for allocation of the investments by the Pension Plans in each of the different above-mentioned categories, in relation to each plan, are set forth in the subsequent paragraphs.

For fixed income investments:

  1. up to 100% in Federal government bonds;
  2. up to 80% in the aggregated assets classified as fixed income, other than Federal government bonds or any of the modalities listed in (c) below;
  3. up to 20% of each of the following modalities: banking credit bonds (cédula de crédito bancário – CCB), banking credit certificates (certificado de cédula de crédito bancário – CCCB) and promissory notes (nota promissória – NP); NCE and CCE; units of FIDC and FICFIDC; real estate receivables certificates (certificado de recebíveis imobiliários – CRI); real estate credit certificates (cédula de crédito imobiliário – CCI); rural product certificates (cédula de produto rural – CPR), agribusiness credit rights certificates (certificado de direitos creditórios do agronegócio – CDCA) agribusiness receivables certificates (certificado de recebíveis do agronegócio – CRA) and WPA; or the aggregated other modalities of instruments and securities issued by publicly-held corporations other than debentures, or by the securitization companies.

For variable income investments, the maximum limit is 60% in shares issued by publicly-held corporations, provided, however, that this ceiling is maintained or decreased as follows:

  1. up to 60% when the shares are listed in the New Market (Novo Mercado) of BM&FBovespa;
  2. up to 60% when the shares are listed in Level 2 (Nível 2) of BM&FBovespa;
  3. up to 50% when the shares are listed in Bovespa Plus (Bovespa Mais) of BM&FBovespa;
  4. up to 45% when the shares are listed in Level 1 (Nível 1) of BM&FBovespa;
  5. up to 35% in the case of shares which are not listed in (a) to (d) above, as well as in the case of units of index funds based on shares traded at the stock exchange;
  6. up to 20% in instruments and securities issued by SPE; and
  7. up to 3% in any other type of variable income investment.

For structured investments, the maximum limit is 20%, but it is reduced to 10%, in the case of units of real estate funds, and the same percentage (10%) is applicable to units of investment funds which in turn invest in units of multimarket funds.

For offshore investments, the limit is 10%.

For real estate investments, the limit is 8%.

For transactions with participants, the limit is 15%.

There are also allocation limits per issuer, in relation to each plan administrated by the Pension Plan: (i) 100%, if the issuer is the National Treasury; (ii) 20%, if the issuer is a financial institution duly authorized to operate by Bacen, including saving deposits and co-obligations of the responsibility of such financial institution; (iii) 10%, if the issuer is any State or Municipal Treasury, a publicly-held corporation registered with CVM or any similar entity, a multilateral agency, a securitization company, a sponsor of the pension benefits, a FIDC or FICFIDC, an index fund based on a basket of shares of publicly-held corporations, an SPE or an investment fund or a fund that invests in units of a structured fund; and (iv) 5%, if the issuer is not included in items (ii) and (iii). In this regard, all the members of the same economic or financial group or the companies controlled by one State or Municipal Treasury are considered as "one single issuer". However, equity investments made in companies formed with the exclusive purpose of participating directly or indirectly in the capital stock of publicly-held corporations are not computed to calculate these limits. If receivables certificates are issued by the securitization company subject to the fiduciary system (regime fiduciário), each segregated asset is deemed to be one issuer.

The concentration limit per issuer, considering the aggregate sum of the resources administrated by the Pension Plan, is 20% of: (i) the total capital of the same publicly-held corporation or of the same SPE; (ii) of the voting capital of the same publicly-held corporation; (iii) of the net worth value of the same financial institution duly authorized by Bacen; (iv) of the net worth value of the same index fund based on a basket of shares of publicly-held corporations, the same structured fund2, the same fund incorporated in Brazil with a portfolio of offshore investments or the same foreign index fund traded at the stock exchange in Brazil; and (v) of the segregated asset formed in the issuance of receivables certificates subject to the fiduciary system. For the purposes of items (i) and (ii) it is necessary to consider additionally the subscription bonuses, subscription receipts and debentures which may be converted into shares of one single company. To determine compliance with the limit, it is paramount to observe the final investments of the Pension Plan3.

The concentration limit per investment, also considering the aggregate sum of the resources administrated by the Pension Plan, is 25% of: (i) the same series of instruments or securities; (ii) of the same class or same series of units of FIDC; or (iii) of the same development project. However, shares, subscription bonuses, subscription receipts, receivables certificates subject to the fiduciary system and debentures issued by an SPE are excluded from this limit.

Pension Plans can also enter into transactions with derivatives, provided that the following conditions are jointly complied with: (i) previous evaluation of the involved risks; (ii) existence of internal control systems adequate to such operations; (iii) registry of the transaction or trading at the stock or commodities and futures exchange; (iv) participation of a clearing house and service providers acting as the central counterparty responsible for guaranteeing the clearing and settlement of the transaction; (v) a margin deposit limited to 15% of the position in Federal government bonds, instruments and securities issued by financial institution(s) duly authorized to operate by Bacen and Bovespa Index shares of the portfolio of each plan or investment fund; and (vi) the total value of the paid option premiums shall not exceed 5% of the position in the same investments set forth in the previous item (v).

Now that Brazil is facing a scenario of low inflation and reduction of the basic interest rates, these regulations are expected to give to the Pension Plans the possibility and opportunity to search for more attractive investments, which require the assumption of more risks but in exchange will enable them to obtain and offer to their participants a better financial return.


1. According to article 109 of CVM Instruction No. 409, of August 18, 2004, as amended, "qualified investors" are: (i) financial institutions; (ii) insurance companies and capitalization societies; (iii) pension plans and open entities of complimentary security; (iv) individuals or legal entities that hold financial investments in an amount superior to R$ 300 thousand and that additionally attest in writing their qualified investor condition; (v) investment funds directed exclusively to qualified investors; (vi) portfolio administrators and securities consultants authorized by CVM in relation to their own monies; and (vii) own social security regimes instated by the Federal Government, by the States, by the Federal District or by Municipalities. All the other investors are deemed to be non-qualified investors.

2. This limit is not applicable to funds which invest in units of investment funds which already comply with such limit, nor to real estate funds with a portfolio formed exclusively by projects already completed and with license to inhabit (certidão de habite-se).

3. Equity investments made in companies formed with the exclusive purpose of participating directly or indirectly in the capital stock of publicly-held corporations are not computed to calculate this limit.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

To print this article, all you need is to be registered on

Click to Login as an existing user or Register so you can print this article.

Walter Stuber
Adriana Maria Gödel Stuber
Some comments from our readers…
“The articles are extremely timely and highly applicable”
“I often find critical information not available elsewhere”
“As in-house counsel, Mondaq’s service is of great value”

Up-coming Events Search
Font Size:
Mondaq on Twitter
Register for Access and our Free Biweekly Alert for
This service is completely free. Access 250,000 archived articles from 100+ countries and get a personalised email twice a week covering developments (and yes, our lawyers like to think you’ve read our Disclaimer).
Email Address
Company Name
Confirm Password
Mondaq Topics -- Select your Interests
 Law Performance
 Law Practice
 Media & IT
 Real Estate
 Wealth Mgt
Asia Pacific
European Union
Latin America
Middle East
United States
Worldwide Updates
Check to state you have read and
agree to our Terms and Conditions

Terms & Conditions and Privacy Statement (the Website) is owned and managed by Mondaq Ltd and as a user you are granted a non-exclusive, revocable license to access the Website under its terms and conditions of use. Your use of the Website constitutes your agreement to the following terms and conditions of use. Mondaq Ltd may terminate your use of the Website if you are in breach of these terms and conditions or if Mondaq Ltd decides to terminate your license of use for whatever reason.

Use of

You may use the Website but are required to register as a user if you wish to read the full text of the content and articles available (the Content). You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these terms & conditions or with the prior written consent of Mondaq Ltd. You may not use electronic or other means to extract details or information about’s content, users or contributors in order to offer them any services or products which compete directly or indirectly with Mondaq Ltd’s services and products.


Mondaq Ltd and/or its respective suppliers make no representations about the suitability of the information contained in the documents and related graphics published on this server for any purpose. All such documents and related graphics are provided "as is" without warranty of any kind. Mondaq Ltd and/or its respective suppliers hereby disclaim all warranties and conditions with regard to this information, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. In no event shall Mondaq Ltd and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use or performance of information available from this server.

The documents and related graphics published on this server could include technical inaccuracies or typographical errors. Changes are periodically added to the information herein. Mondaq Ltd and/or its respective suppliers may make improvements and/or changes in the product(s) and/or the program(s) described herein at any time.


Mondaq Ltd requires you to register and provide information that personally identifies you, including what sort of information you are interested in, for three primary purposes:

  • To allow you to personalize the Mondaq websites you are visiting.
  • To enable features such as password reminder, newsletter alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our information providers who provide information free for your use.

Mondaq (and its affiliate sites) do not sell or provide your details to third parties other than information providers. The reason we provide our information providers with this information is so that they can measure the response their articles are receiving and provide you with information about their products and services.

If you do not want us to provide your name and email address you may opt out by clicking here .

If you do not wish to receive any future announcements of products and services offered by Mondaq by clicking here .

Information Collection and Use

We require site users to register with Mondaq (and its affiliate sites) to view the free information on the site. We also collect information from our users at several different points on the websites: this is so that we can customise the sites according to individual usage, provide 'session-aware' functionality, and ensure that content is acquired and developed appropriately. This gives us an overall picture of our user profiles, which in turn shows to our Editorial Contributors the type of person they are reaching by posting articles on Mondaq (and its affiliate sites) – meaning more free content for registered users.

We are only able to provide the material on the Mondaq (and its affiliate sites) site free to site visitors because we can pass on information about the pages that users are viewing and the personal information users provide to us (e.g. email addresses) to reputable contributing firms such as law firms who author those pages. We do not sell or rent information to anyone else other than the authors of those pages, who may change from time to time. Should you wish us not to disclose your details to any of these parties, please tick the box above or tick the box marked "Opt out of Registration Information Disclosure" on the Your Profile page. We and our author organisations may only contact you via email or other means if you allow us to do so. Users can opt out of contact when they register on the site, or send an email to with “no disclosure” in the subject heading

Mondaq News Alerts

In order to receive Mondaq News Alerts, users have to complete a separate registration form. This is a personalised service where users choose regions and topics of interest and we send it only to those users who have requested it. Users can stop receiving these Alerts by going to the Mondaq News Alerts page and deselecting all interest areas. In the same way users can amend their personal preferences to add or remove subject areas.


A cookie is a small text file written to a user’s hard drive that contains an identifying user number. The cookies do not contain any personal information about users. We use the cookie so users do not have to log in every time they use the service and the cookie will automatically expire if you do not visit the Mondaq website (or its affiliate sites) for 12 months. We also use the cookie to personalise a user's experience of the site (for example to show information specific to a user's region). As the Mondaq sites are fully personalised and cookies are essential to its core technology the site will function unpredictably with browsers that do not support cookies - or where cookies are disabled (in these circumstances we advise you to attempt to locate the information you require elsewhere on the web). However if you are concerned about the presence of a Mondaq cookie on your machine you can also choose to expire the cookie immediately (remove it) by selecting the 'Log Off' menu option as the last thing you do when you use the site.

Some of our business partners may use cookies on our site (for example, advertisers). However, we have no access to or control over these cookies and we are not aware of any at present that do so.

Log Files

We use IP addresses to analyse trends, administer the site, track movement, and gather broad demographic information for aggregate use. IP addresses are not linked to personally identifiable information.


This web site contains links to other sites. Please be aware that Mondaq (or its affiliate sites) are not responsible for the privacy practices of such other sites. We encourage our users to be aware when they leave our site and to read the privacy statements of these third party sites. This privacy statement applies solely to information collected by this Web site.

Surveys & Contests

From time-to-time our site requests information from users via surveys or contests. Participation in these surveys or contests is completely voluntary and the user therefore has a choice whether or not to disclose any information requested. Information requested may include contact information (such as name and delivery address), and demographic information (such as postcode, age level). Contact information will be used to notify the winners and award prizes. Survey information will be used for purposes of monitoring or improving the functionality of the site.


If a user elects to use our referral service for informing a friend about our site, we ask them for the friend’s name and email address. Mondaq stores this information and may contact the friend to invite them to register with Mondaq, but they will not be contacted more than once. The friend may contact Mondaq to request the removal of this information from our database.


This website takes every reasonable precaution to protect our users’ information. When users submit sensitive information via the website, your information is protected using firewalls and other security technology. If you have any questions about the security at our website, you can send an email to

Correcting/Updating Personal Information

If a user’s personally identifiable information changes (such as postcode), or if a user no longer desires our service, we will endeavour to provide a way to correct, update or remove that user’s personal data provided to us. This can usually be done at the “Your Profile” page or by sending an email to

Notification of Changes

If we decide to change our Terms & Conditions or Privacy Policy, we will post those changes on our site so our users are always aware of what information we collect, how we use it, and under what circumstances, if any, we disclose it. If at any point we decide to use personally identifiable information in a manner different from that stated at the time it was collected, we will notify users by way of an email. Users will have a choice as to whether or not we use their information in this different manner. We will use information in accordance with the privacy policy under which the information was collected.

How to contact Mondaq

You can contact us with comments or queries at

If for some reason you believe Mondaq Ltd. has not adhered to these principles, please notify us by e-mail at and we will use commercially reasonable efforts to determine and correct the problem promptly.