Marcio Monzane

Postal staff in Brazil are difficult that Financial institution of New York Mellon quilt greater than $2 billion of funding losses associated with the employees’ pensions, arguing that the U.S.-based financial institution mismanaged the price range.

The losses have led to lowered pension advantages for loads of hundreds of Brazilian retirees and better out-of-pocket prices for present postal employees, in step with teams that constitute the employees.

Greater than 100 representatives from the postal employees federations of Brazil and group teams within the U.S. and Brazil accrued in entrance of BNY Mellon’s Wall Side road headquarters ultimate Friday afternoon to suggest for restitution. They carried indicators difficult the go back of price range misplaced by means of the pension fund for Brazil’s postal employees retirement gadget, referred to as Postalis.

“We intend to place force on BNY Mellon to recognize its accountability and satisfy its legal responsibility to totally reimburse Postalis for the whole lot of the losses incurred,” José Aparecido Gimenes Gandara, president of the Brazilian Postal Staff Federation (FINDECT), stated in a commentary.

A BNY Mellon subsidiary controlled a part of Postalis from 2011 to 2019. Managers of the fund, together with the previous head of the New York financial institution’s Brazilian trade unit, embezzled cash from Postalis funding price range and positioned different dangerous bets that contributed to the mismanagement, advocates for the postal employees stated.

In a commentary, BNY Mellon gave no floor to the protesters.

“Any funding losses suffered by means of the Brazilian Postal Staff Pension Fund, Postalis, had been in the end the results of Postalis’ personal habits,” BNY Mellon stated. 

The advocacy teams stated that retired postal employees within the nation of 216 million have noticed their pension advantages reduce by means of up to 25%, and that the ones discounts will ultimate for existence.

On the similar time, present postal staff at the moment are required to pay extra into their pension plans than they had been earlier than the pension fund suffered the losses. The losses additionally resulted in the cutting down of a number of advantages, together with one that gives a existence insurance coverage cost in a lump sum when a employee dies.

An estimated 55,000 retired employees and 117,000 present staff were suffering from the discounts, in step with the postal employees unions. With reference to 500,000 Brazilians depend at the postal employees retirement gadget, together with present employees, retirees and dependent members of the family.

BNY Mellon’s contract with the retirement gadget “assigns fiduciary accountability for the result of the investments to Financial institution of New York Mellon,” Emerson Marinho, president of the Brazilian Postal Staff Federation, stated in an interview.

The financial institution has stated that it does not consider that fiduciary managers are accountable for monetary selections.

The dispute could also be matter to ongoing felony motion, together with motion by means of Brazil’s federal prosecutor, in step with teams advocating for the postal employees.

In 2018, govt prosecutors in Brazil attempted unsuccessfully to get well the losses from the New York financial institution. They argued that BNY Mellon failed to observe the dangers dealing with Postalis and didn’t conform to related asset allocation laws.

On the time, the prosecutors estimated the wear to the pension fund to be value about 8.2 billion Brazilian reals, or greater than 2 billion U.S. greenbacks.

Brazil’s parliament and BNY Mellon have mentioned attainable restitution, in step with fresh information reviews, however no settlement has been introduced. The advocacy teams stated they plan to interact with U.S. lawmakers and proceed to arrange occasions in each Brazil and the US to boost consciousness concerning the misplaced pension price range.