Reuters reports today that the Brazilian government has taken control of the largest pension fund in Brazil. The Pensions and Welfare Ministry announced that Previ – the $15 billion pension fund for workers at the state-owned Banco do Brasil – will now be managed by a government-appointed caretaker, Carlos Eduardo Esteves Lima, for at least two months.
This follows the failure by the Previ board to bring the corporate statutes of the fund in line with new rules for the sector, which stipulate a maximum of six board members, three chosen by pension participants and three by the government body they work for, each with equal say. The rules also require one of the bank’s board members to be voted president with a casting vote. The ministry said Previ’s current board had four members representing participants and three representing Banco do Brasil, and that neither had the tie-breaking vote. Previ’s fiscal board, which should have a maximum of four members, did not comply with the new regulations either. Previ accounts for about a quarter of the total assets of the pension fund sector in Brazil.
The Complimentary Pensions Department (SPC) of the Pensions and Welfare Ministry said that Previ was the only one of 93 government pension funds that failed to turn in new corporate statues in compliance with the new law last week. “The intervention in Previ is aimed at guarding the rights of its participants,” an SPC spokesman said.