CMS Expert Guide to Pensions in Brazil

The Brazilian pension system is composed of three regimes:

• General Social Security Regime (RGPS): mandatory for most workers, governed by Law No. 8,213/1991 and Decree No. 3,048/1999, jointly financed by employers and employees. It provides retirement, disability, maternity, death, and other benefits within limits ranging from the minimum wage (BRL 1,518.00 in 2025) to the social security ceiling (BRL 8,157.40 in 2025).
• Special Public Regimes (RPPS): established by federal, state or municipal entities for their own civil servants, financed by employees and public budgets.
• Complementary Pension System: voluntary, private and autonomous, regulated by Complementary Laws No. 108/2001 and 109/2001, offered through:
  • Closed Entities (EFPCs): pension funds set up by companies or associations, restricted to employees/members.
  • Open Entities (EAPCs): offered by banks/insurers to the general public.

Brazilian private pensions are complementary and provided through EFPCs and EAPCs.

• EFPCs are non-profit funds linked to companies or associations, offering Defined Benefit (DB), Defined Contribution (DC) or Variable Contribution (VC) plans. Contributions come from sponsors and/or participants.
• EAPCs are for-profit institutions (banks/insurers) offering open products (mainly PGBL, VGBL) to any individual.

Brazilian private pensions are complementary, through EFPCs and EAPCs.

• EFPCs are non-profit funds linked to companies or associations, offering Defined Benefit (DB), Defined Contribution (DC), or Variable Contribution (VC) plans. Contributions come from sponsors and/or participants.
• EAPCs are for-profit institutions (banks/insurers) offering open products (mainly PGBL, VGBL) to any individual.

Participation is voluntary, except for public servants subject to the 2019 reform, who must join supplementary plans when their benefits are capped.

Participation is voluntary, except for public servants subject to the 2019 reform who must join supplementary plans when their benefits are capped.

• Closed plans (EFPCs): may only be created by employers, associations or unions.
• Open plans (EAPCs): can only be operated by licensed insurers/financial institutions under SUSEP.
• Closed plans (EFPC): may only be created by employers, associations, or unions.
• Open plans (EAPC): can only be operated by licensed insurers/financial institutions under SUSEP.

Both EFPCs and EAPCs are under strict supervision by PREVIC and SUSEP respectively.

There is no general obligation to contribute. Rules are set out in each plan’s regulation. Employers typically match employee contributions in EFPCs.

Plans must maintain actuarial reserves and undergo annual assessments (EFPCs). EAPCs must comply with solvency and capital rules under SUSEP.

7. What age are benefits taken?

Plans often require retirement age (55–65) but may also provide disability or survivorship pensions. Rules vary by plan.

Costs are borne by participants or jointly with sponsors, with employers often matching contributions.

Yes. For contributions to qualify for tax benefits (deductibility or deferral), the pension plan must be duly registered and operated by an authorised supplementary pension entity — either a Closed Entity (EFPC), supervised by PREVIC, or an Open Entity (EAPC), supervised by SUSEP. Compliance with the applicable legislation and regulatory oversight is mandatory.

Yes. Contributions are subject to specific tax rules depending on the plan and tax regime:

• PGBL (EAPC): deductible up to 12% of an individual’s annual taxable income (if also contributing to the public pension system). Companies may also deduct contributions within legal limits.
• VGBL (EAPC): contributions are not deductible, as the product is legally treated as life insurance.
• EFPC (closed plans): employer contributions deductible up to 20% of active participants’ payroll; participant contributions deductible up to 12% of gross annual income.

No. Investment income earned during the accumulation phase is not immediately taxed. Taxation occurs only when benefits are paid out or funds are redeemed.

12. Are benefits taxed?

Yes. Pension benefits and withdrawals are subject to income tax, according to the regime chosen at enrolment:

• Progressive regime: monthly tax rates from 0% to 27.5%, with offsetting allowed.
• Regressive regime: exclusive withholding tax, with rates decreasing from 35% (up to 2 years) to 10% (after 10 years).

Yes. In addition to tax advantages, supplementary pension plans offer incentives such as: succession benefits (assets may bypass probate), portability between plans without taxation, flexible contribution options, and the use of company-sponsored plans in executive compensation and retention strategies.

Yes. Legal limits apply depending on the plan type:

• PGBL: contributions deductible up to 12% of annual taxable income.
• VGBL: no legal limit, but contributions are not tax-deductible.
• EFPCs: employer contributions limited to 20% of payroll; participant contributions limited to 12% of annual income, with additional voluntary contributions allowed.

Benefit limits follow actuarial rules and plan regulations.

Supplementary pension entities are regulated and supervised by federal authorities, under distinct frameworks:

• Closed entities (EFPCs): regulated by the National Supplementary Pension Council (CNPC) and supervised by PREVIC, which authorises their creation and operation, approves plan documents and amendments, oversees solvency, and may impose sanctions, interventions, or liquidation.
• Open entities (EAPCs): regulated by the National Council of Private Insurance (CNSP) and supervised by SUSEP, which licenses entities, approves benefit plans, monitors governance and solvency, and may intervene in cases of irregularities or undercapitalisation.

These powers ensure transparency, solvency, and legal certainty in the management of pension plans.

Pension entities must submit regular financial statements, actuarial valuations, governance and risk management reports, and investment performance data through electronic systems maintained by PREVIC (for EFPCs) and SUSEP (for EAPCs). They must also disclose relevant information to participants, maintain internal controls, and promptly report material events or irregularities.

Yes. Supervisory authorities have broad intervention powers:

• PREVIC (EFPCs): may order intervention, appoint temporary administrators, approve or reject recovery plans, or determine liquidation.
• SUSEP (EAPCs): may monitor solvency, apply early intervention measures, restrict operations, or impose extraordinary supervision in cases of undercapitalisation.

These mechanisms ensure solvency protection and safeguard participants’ rights.

Yes. Brazilian law, aligned with the Federal Constitution and international treaties, expressly prohibits any form of discrimination in supplementary pension provision.

Participants who leave a plan before qualifying for retirement benefits may choose among the following options (known as institutos):

• Redemption: withdraw accumulated amounts (with or without sponsor’s share, depending on plan rules).
• Portability: transfer reserves to another plan/entity.
• Self-sponsorship: continue contributing individually to maintain the plan.
• Deferred proportional benefit: preserve accrued rights for future payment.

These mechanisms protect contributions already made and ensure flexibility for participants changing jobs or leaving early.

They aim to maintain the value of the contributions already made and encourage long-term savings behavior.

Yes. In closed supplementary pension entities (EFPCs), unions may act as founders (instituidores) of benefit plans or participate in governance bodies (deliberative or fiscal councils) when elected as representatives of participants and beneficiaries.

Yes. In EFPCs, unions or professional associations may establish plans and take part in governance, either by sponsoring collective schemes or by electing representatives to councils, as permitted by each plan’s regulation. This ensures participant representation and collective oversight in plan management.

Yes, but with limitations. Brazil allows portability of reserves to international pension plans where bilateral agreements exist or with regulatory approval, and expatriates may participate in local plans. Multinational group plans may operate if registered with PREVIC or SUSEP. However, tax and operational barriers still limit full cross-border integration.

Yes. Portability between plans is allowed but subject to conditions: compatibility of plan type and tax regime, fulfilment of grace/vesting periods, and regulatory approval. In closed plans (EFPCs), portability is not permitted while the participant remains employed by the sponsoring company.