Brazilian Pension Funds Authority sets viability assessment criteria for authorising new closed pension funds and benefit plans

Brazil’s Pension Funds Authority (PREVIC) issued rules setting the criteria its Licensing Directorate will use to assess the financial, actuarial and administrative viability of proposals to create new closed pension entities and new benefit plans. The criteria rely on indicators calculated from current and projected information provided by applicants and classify results into green, yellow or red bands. For new entities, PREVIC will assess participant numbers, per-capita administrative expenses and administrative expense coverage, and will recommend refusal where at least two indicators are red. For new benefit plans, the review will consider participant numbers, per-capita administrative revenues and administrative revenues relative to mathematical provisions, with refusal recommended where three indicators are red, or where two are red and one is yellow. With the ordinance in force, authorisation analyses for new entities or plans will follow these criteria, supported by new Licensing Directorate instructions and data-submission spreadsheets made available on the PREVIC portal, including for entity and plan spin-offs.