Banco Master Collapse Threatens Retirement Funds, Sparks Fraud Investigation
Rio de Janeiro – Theโข liquidation of Banco Master following allegations of widespread fraud is poised to trigger a cascade โof defaults impacting โpension funds across brazil, perhaps necessitating futureโฃ reforms to the country’sโ retirement system. A Folha deโค S.Paulo investigation reveals that R$1.86 billion in retirement savings were invested in the โฃnow-defunct bank, fueled in part by political connections and, inโ some cases, despite internal warnings.
The scandal centers on financial instruments sold by Banco Master, with โคinvestigators now scrutinizing the bank’sโข operations. Theโ opening for investors was reportedly facilitated by the bank’s president’s relationshipsโค with prominent politicians.
Among the hardest hit are state-level pension entities. Rioprevidรชncia, whichโฃ closed 2024 with a deficit โคof R$17 billion, allocatedโ approximately R$970 million to Master’s financialโข bills. Amprev (Amapรก Previdรชncia), facing a R$6.9 billion deficit, invested R$400 million. Both entities maintainโ that current benefitโ payments remain secure despite the losses.
However, the impact extendsโ beyond large state funds. Smaller municipalities, including Cajamar, Sรฃo Paulo (populationโ 92,000), also participated, investing a considerableโ R$87 million – nearly depleting its R$34 million surplus fromโ 2024 – in Banco Master.
Two managers at Caixa Econรดmica Federal reportedlyโข lost their positions after โobjecting to aโ R$500 million investment in Master’s financial bills.
Authorities are currently investigating the fraud, and the โคunfolding crisis is expected to reignite debate over pension fund investment practices and the need for stricter regulations, potentially leading to new pension reforms under the guise of fiscal necessity.
