Brazilian Pension Funds Authority links closed pension funds’ lack of Banco Master exposure to risk based supervision and backs fines up to BRL 4.3 million

In an article published on JOTA, Brazilian Pension Funds Authority superintendent Ricardo Pena set out PREVIC’s assessment that closed pension funds’ absence from Banco Master at the time of its liquidation in 2025 reflected the sector’s more mature, risk-based governance and supervision framework. The piece presents this as an explanation for the non-investment or divestment decisions of entities in the closed supplementary pension regime, rather than a new supervisory measure. The article distinguishes that regime from the public sector pension system, noting that PREVIC supervises 264 closed pension funds, while the Ministry of Social Security oversees 2,132 own-regime pension schemes. PREVIC said its framework uses four supervisory segments based on size, complexity and risk, alongside selection processes and certification requirements for investment managers and, in some cases, statements of purpose and technical interviews. The authority also highlighted investment and risk management policies, an annual inspection program built on risk matrices for entities and pension plans, and supervision carried out both within entities and through analysis of investment, accounting, actuarial, pension and governance data, including information cross-checks with the Central Bank of Brazil and the Brazilian Securities and Exchange Commission. Pena also argued that the sanctions regime should be updated. He said a revision of the 2003 sanctions decree is with the Civil House of the Presidency and should introduce preventive prudential measures, individualization of conduct, better calibration and classification of irregularities, and an increase in the maximum fine per manager from BRL 87,000 to BRL 4.3 million.