SAO PAULO, Nov 18 (Reuters) - A Brazilian policy body will discuss a rule allowing pension funds in state companies to take longer before recognizing shortfalls accumulated over a three-year long market rout, three sources with direct knowledge of the plan said on Wednesday.
Under the plan being studied by the National Pension Industry Council (CNPC), the new rule would permit companies and employees contributing additional retirement savings to forego immediate one-time contributions, said two of the sources who requested anonymity because the matter is not yet public.
The CNPC, which includes representatives from the Finance, Budget and Planning, Labor and Social Security ministries as well as pension fund watchdog Previc, began a meeting in Brasilia to discuss the changes at 10 a.m. local time (1200 GMT).
If approved, changes would apply to state as well as private complementary pension plans, the sources added. The criteria behind the changes is a reduction in so-called duration of the pension fund portfolio, which could give extra time for stocks, bonds and other securities in fund portfolios to recover, they added.
Some funds, especially those managing money for state workers, have been saddled with enormous losses in the wake of ill-timed investment decisions since the start of President Dilma Rousseff's first term in January 2011. She was re-elected last year for another four-year term.
For Funcef, the pension fund for the workers of state lender Caixa Econômica Federal, the three-year accumulated shortfall could narrow to about 500 million reais ($131 million) from 5.6 billion reais currently, said one source. Funcef declined to comment.
Brazil's largest pension funds are facing a couple of difficult years as a lengthy recession will likely stoke redemptions and outpace contributions by a large margin.
Average profitability in the industry is likely to end this year at around 8.7 percent, well below the targeted actuarial rate of return, or minimum expected return on investments, of 15.94 percent, according to Abrapp, the group that represents pension funds. ($1 = 3.8042 Brazilian reais) (Editing by Jeffrey Benkoe)