Brazil’s second-largest pension fund is reeling after a year of scandal and investment losses.
The fund, Petro, is the pension fund for employees of the state-run oil company Petrobas, which has been embroiled in a corruption scandal for months.
As of January, Brazilian authorities had also been investigating the pension fund for alleged wrongdoing.
But Petros and the employees that rely on it have a bigger problem: the fund lost nearly $2 billion in 2014, or about eight percent of its value, according to a report from Bloomberg.
From Bloomberg:
Petroleo Brasileiro SA’s employee pension fund, known as Petros, lost more than 6 billion reais ($1.9 billion) last year, according to a person with direct access to the fund’s preliminary results.
The deficit widened from 2.4 billion reais in 2013 partly because of Brazilian share declines, the person said, asking not to be identified before results are released publicly. Petrobras’s balance sheet could be affected when Petros charges it for part of its losses, the person said.
The pension fund can’t comment on financial results that haven’t been formally approved and has until July 31 to file to regulators, it said in an e-mailed response to Bloomberg.
Petros had 158,000 participants at the end of 2013, according to regulatory filings. Brazil’s benchmark stock index fell 2.9 percent last year as economists forecast the first economic contraction this year since 2009. Internal rules would force Petrobras or its employees to allocate more funds to Petros if it registers a third straight year of losses.
Petros managed approximately $22 billion in pension assets as of 2013.
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