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Fundacao Cesp, the pension fund for workers of Cia. Energetica de Sao Paulo, is negotiating lower actuarial targets with clients as cuts in Brazil’s borrowing costs and a bear market for Brazil stocks cut into returns, said Euzebio Bomfim, the fund’s director of retirement.
“We have some plans where we still haven’t been able to convince the participants” to accept lower targets, Bomfim said in a phone interview from Sao Paulo. “You can’t use targets to calculate returns that aren’t reachable. It’s not just in terms of government bonds, it’s also stocks. There’s great volatility.”
The Bovespa index plunged into a bear market on May 17 on concern a worsening global economy will curb demand for Brazilian exports after a quarter in which most companies reported earnings that trailed estimates.
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