Law changes choice of taxation of supplementary pension – 01/11/2024 – Market

A law sanctioned by President Luiz Inácio Lula da Silva gives participants and beneficiaries of supplementary pension plans more autonomy to decide on the investment taxation regime. The legislation was published in the Official Gazette of the Union this Thursday (11).

Taxation of supplementary pensions can be regressive or progressive. Until then, the choice between the regimes had to be made at the time of joining the plan.

Now, investors or their beneficiaries can decide the type of taxation not only when contracting the plan, but also on the first withdrawal or redemption of accumulated values.

According to the regressive table, the rate starts at 35% in the first two years and decreases until it reaches ten years of application, when the rate is set at 10%.

The progressive regime follows the Personal Income Tax table, with rates from 0% to 27.5%, depending on the amount that will be redeemed.

Investors who have already made the choice “will be able to exercise their option again under the taxation regime prior to said law until the moment they obtain the benefit or request the first redemption made after the publication of this law”, states the text sanctioned by Lula.

The new rule applies to plans operated by a supplementary pension entity, an insurance company or Fapi (Individual Programmed Retirement Fund).

“The possibility of choosing at the appropriate time provides beneficiaries with a unique opportunity to adapt taxation to their specific needs and financial realities”, says Renato Munduruca, from RVM Law.

“Imagine a worker who joined a supplementary pension plan at the age of 30. At the time of joining, he opted for the progressive regime, aiming for a short-term investment. However, only now, at the age of 55, is he considering retiring and redeem his supplementary pension plan. With the new law, he can stop paying a rate of 27.5% and start paying a rate of 10% when opting for the regressive regime”, explains Munduruca.

For André Mendes Moreira, professor of tax law at USP and partner at Sacha Calmon-Misabel Derzi Advogados, the alternative given to investors to modify the taxation regime of their pension plan, be it a PGBL or a VGBL, is a big advance that will certainly stimulate this type of investment.