Brazilian Pension Funds Authority PREVIC used an Abrapp-hosted virtual event on risk-based supervision in closed pension funds to explain how it is orienting oversight around risks and conduct rather than rule compliance alone. The approach was framed as primarily supervisory and guidance-led, while retaining enforcement tools where needed. PREVIC presented three dimensions of supervision: preventive, protective and punitive. Preventive supervision is organised through an annual inspection programme that places entities into a size and complexity risk matrix and assigns them to four segments, S1 to S4. Under normal conditions, PREVIC expects to inspect all entities within a seven-year cycle, with continuous supervision for the largest and most complex S1 entities and periodic reviews for S2, supported by ongoing off-site monitoring of investment, actuarial, accounting and governance data and targeted inspections triggered by events or complaints. Protective supervision relies on closer engagement with governance bodies via technical meetings, information requests and a formal inspection report discussed in advance with the entity, which can lead to recommendations, follow-up points, determinations and terms of adjustment of conduct. The punitive dimension remains available when necessary, with rights to challenge findings and to defend. PREVIC also highlighted thematic supervision across all entities on issues such as variable remuneration alignment, participant communications, external audits, cybersecurity and ESG investment criteria, which it indicated could inform future cross-cutting regulation. Separately, Abrapp’s president argued that updating Decree 4942/2003 on the sanctions regime would support fuller adoption of risk-based supervision by clarifying offences, accountability and proportionality.

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