This content is from: Local Insights

Brazil

Proposals for complementary social security and pension plans

Since March 26, 1999, the Brazilian National Congress has been debating three bills that will regulate Brazilian complementary social security and pension plans within the public and private sectors.

These bills are based on seven main premises:

flexibility in the creation, organization and operation of complementary social security entities and pension plans;

greater credibility and security for the system to maintain and enlarge popular savings in the long term;

ensuring the proficiency of the complementary social security administrators;

inclusion of the public service in the system;

greater transparency for the administration of the complementary social security entities and pension plans;

strengthening of the state's capacity to regulate and inspect the system; and

preservation of the elective nature of the complementary social security and maintenance of the public social security.

Today, pension plan equity in Brazil represents approximately 11% of the gross national product. The approval of the new system is expected to duplicate such volume in the next four years as pension plans generate the greatest capital towards economic development in Brazil.

Privatization
CESP (the electric energy company of the state of São Paulo) is about to be sold with American companies the most interested in its purchase. As a resutl the Electric Energy Secretary of the State of São Paulo recently announced, that the government is considering a road show presentation in New York City.

CESP is divided into three different companies. Its electric energy generation is scheduled to be auctioned on three different dates. The Paraná Generator, which even after the split-up remains Brazil's second largest electric energy generator, will be auctioned on May 26 1999 (its electric energy generation capacity is of 6.218 megawatts (MW)). On June 9, the Paranapanema Generator, whose electric energy generation capacity is 2.152 MW, will be auctioned. And on June 16, the Tietê Generator, with an electric energy generation capacity of 2.644 MW will also be auctioned. The minimum price for the companies is due to be published between April 20 and 25. Publication of the invitation to bid will take place on April 28.

Eliana Maria Filippozzi

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