June 8, 2018 |
With 842 billion reais ($227 billion) in assets under management at the end of last year, Brazil's pension funds are a key source of funding for the local capital markets. But the industry's investment capacity has been severely compromised by years of poor performance and a series of high profile scandals.
The pension funds for employees of the state-owned postal service Correios, the state-owned banks Caixa Econômica Federal and Banco do Brasil, and the state-owned energy company Petrobras, among others, have amassed billions of reais of losses due to risky bets that were allegedly connected to fraud and kickback schemes.
The funds stand accused of diverting workers' contributions to com
Pension funds in Brazil are reeling from corruption scandals that caused billions of reais in losses. Now they are implementing stricter rules for picking investments, but options are slim.