BRAZIL - ANAPP, the National Association of Private Social Security in Brazil, is lobbying the government to have private pension funds included under newly introduced legislation that removed the former tax on the movement of investments.
Previously in Brazil, investors and funds were taxed 0.38% under the Contribuicao Provisoriasobre Movimentacao Financeira (CPMF) when moving money from one fund to another.
Under the new investment accounts law, which came into effect on October 1, 2004, investors no longer pay CPMF on the movement of their investments. But the new law does not apply to pension funds.
ANAPP director Eduardo Freitas said: “We believe that this new rule, if applied upon open complementary pension funds, will increase the competition between the operators and, in consequence, reduce the assets management fees and leverage the funds’ performance.”
Freitas said ANAPP has had contact with government officials and legislators in an effort to convince them that the new rule should be applied to pension funds.
The group plans to continue lobbying until its voice is heard but the push for change does not necessarily have the backing of Brazil’s pension regulator, the Secretaria de Previdencia Complementar.
Dr Waldemir Bargieri, director of closed pension fund supervision at the Secretaria de Previdencia Complementar said: “People can’t invest their money from investment accounts to pension funds without the payment of CPMF tax because in Brazil, pension funds are not similar to investment funds.
“When ANAPP lobbies to have that possibility, it recognises that the open pension funds are more similar to rental funds than to previdencial funds, and I don’t know if it’s good for this industry.”
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