Consultancy: Open pension funds could double assets this year

Brazil's open private pension funds could see last year's combined assets of 61.4bn reais (US$23bn) double this year on the back of soaring demand, Fernando Lovisotto, partner at local investment consultancy Risk Office Consultoria told BNamericas. In Brazil there are pension funds that are open to the general public and there are also so-called closed pension funds that are only open to employees of a company, an institution or a certain industry. Demand to invest in pension plans offered by the open pension funds will be very strong this year because of the Brazilian public's growing concern over the ailing state of the government-run pension system - and also due to new tax rules, favouring long-term savings, Lovisotto explained. Last year the open pension funds saw their assets jump 38.4% compared to 2003. The open funds also saw their number of pension plans expand at healthy rates last year. Individual plans showed a 14.8% increase to 7.11 million and corporate plans were up 33% to 120,662. The open pension fund business in Brazil is dominated by the country's largest insurance groups and there are approximately 200 open pension funds operating today, according to Lovisotto.