In Brazil, two main types of corporate pension vehicles are available for long-term savings: closed entity and open entity.
Closed pension plans are private and have their own management structure. They are also available as multi-sponsored plans, and offer solid advantages to medium and big companies.

Open pension plans can be either collective or individual, and may be operated by insurance companies, banks, or non-profit organisations. The most common open pension plans are the Plano Gerador de Beneficios Livres (PGBL) – similar to the US 401k plan, and the Vida Gerador de Beneficios Livres (VGBL), for employees’ contributions.

Icatu Hartford’s IhPrev plan
Icatu Hartford created “IhPrev” as a multi-sponsored plan in 1996. The company is one of the few insurers to specialise multi-sponsored plans. IhPrev allows a sponsoring company to outsource its pension fund administration and asset management, but keep its plan exclusive and segregated from other sponsors’ plans. IhPrev is a solution for companies seeking improved services for participants, supported by high-tech systems. In addition, IhPrev’s modern governance structure, which is approved by the regulator, allows the company to outsource criminal and financial liabilities. These would normally be assumed by directors in the case of in-house managed plans.

IhPrev uses external banks for asset management, with no conflict of interest, since Icatu Hartford is not affiliated to any banking group.

The second half of 2008 saw the multi-sponsored market grow even stronger, since these plans normally have lower costs due to their shared overheads. They thus help companies reduce their expenses - a particularly important advantage during these difficult financial times.

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