Social Insurance Scheme (RPPS), Officials Pension System, havingmeet new investment rules and improve liquidity and risk management. National Monetary Council (CMN) approved today (27) resolution that changes resource management rules by managers. According to the Finance Ministry's Secretariat for Economic Policy (SPE), the measure intends to "protect" public resources covering the pensions of federal, state and municipal employees.
The action, SPE said, will strengthen RPPS's governance through improving liquidity and risk management, strengthening internal controls, creating risk analysis methods and improving selection and evaluating managers. According to the Ministry of Finance, the new rules contribute to the financial balance by ensuring the management of pension systems becomes more secure and transparent.
In exchange for strengthening controls, CMN got its own rules to diversify its investments. The decision authorized RPPS to apply funds abroad and in investment funds from companies that issue shares on the stock exchange. In order to encourage good governance, the entities consider having a high governance form of the social security secretariat havinglimits for increased investment.
According to SPE, the main change in improving resource resources was the requirement that new applications of RPPS funds be made only in investment funds managed by institutions or executives authorized by the central bank. These institutions havingnot to establish an audit and risk assessment committee under the CMN rules. According to the Ministry of Finance, RPPS today allocates 94% of the resources to managers with good management history.
In connection with the management of institutions, the Audit Committees establish the most transparent methods of corporate governance. Risk committees should follow these methods when dealing with the risk of resource applications.
In order to encourage diversification of investment, CMN has determined that RPPS may invest in investment funds with up to 50% of the portfolio of pension and pension funds by public officials. The rest of the portfolio should be associated with resources from third parties.
CMN also changed the standard for the use of resources by pension funds. The Agency has made it possible for the Funds, which make up supplementary pension funds, to re-use Funds of Investment Funds (FIPs) set up to finance concessions for infrastructure projects. In return, these FIP services may provide the guarantee, guarantees or joint commitments, which serve as partial guarantees for the projects, which guarantees the security of pension funds if the projects are not completed.
Pension funds can also invest in financial instruments already offered on the market, not just in instruments tailored to them. This will be possible because CMN has refrained from "fund" investment funds to maintain margin control to operate on derivatives markets.