Brazilian Pension Funds Authority position upheld as Superior Labour Court assigns deficit pension plan damages suits against sponsors to ordinary courts

The Brazilian Pension Funds Authority (PREVIC) reported that Brazil’s Superior Labour Court (TST) has unanimously ruled, under Theme 24, that ordinary courts rather than labour courts have jurisdiction over damages claims brought by members and beneficiaries of underfunded pension fund plans against sponsor companies. PREVIC participated as amicus curiae, and the decision is presented as ending a jurisdictional impasse with repercussions across the labour court system. The ruling establishes that only the ordinary courts may hear claims by participants and beneficiaries against sponsors of closed supplementary pension entities (EFPC), including cases involving extraordinary contributions arising from deficit recovery measures where the shortfall is alleged to have been caused by mismanagement by a sponsor-appointed manager. PREVIC linked the outcome to Article 202 of the Federal Constitution, which treats supplementary pension contracts as distinct from employment contracts, and framed the decision as increasing legal certainty for the pension fund sector and potentially reducing sponsor costs. PREVIC also highlighted its institutional approach to monitoring litigation with sector-wide impact through the Commission for Monitoring Relevant Actions (CMAR), a collegial body created under PREVIC Resolution 23/2023 and Ordinance 722/2024 that maps and analyses cases capable of affecting large numbers of EFPC.