Private pension funds defy Brazil's economic crisis
Despite Brazil's economic crisis, local private pension funds have taken in 39.4bn reais (US$10.4bn) in the last 12 months, a 9.2% jump in net worth, according to O Globo.
In September the investment portfolio of these funds exceeded for the first time half a trillion reais, said insurance regulator Susep. Experts say that private pensions are favored over savings accounts for the long-term discipline they impose on savers, its tax benefits and greater public awareness of the need for financial planning.
"[Savings accounts] recorded more withdrawals than deposits for months in a row," said Diego Kashiwakura, a senior analyst at Moody's. "Those more attentive investors end up migrating [to different methods of saving] or simply directing new investments to other savings options."
Despite being fully exempt from income taxes, savings accounts have been struggling at a fixed return of 6.17% plus a referential rate, compared to an annual inflation rate of 9.93%.
High unemployment and household debt have also led savers to withdraw funds.
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