Brazil police target Rio pension fund in probe linked to Banco Master, sources say

Key Highlights

• Sources familiar with the matter said the probe was related ⁠to Master, which was shut ‌down in November by Brazil's central bank amid a severe liquidity crisis and violations of financial-system rules.
• The liquidation ‍triggered the largest-ever payout by Brazil's private deposit guarantee fund, but the securities purchased by Rio de Janeiro state's pension fund Rioprevidencia were not eligible ​for coverage.
• In a statement, Rioprevidencia said it is protected by a ‌court ruling issued in December, which ordered the retention of roughly 970 million reais related to the invested amounts in order to safeguard the retirement assets of active and retired civil servants and pensioners.
• "As a result, the investment is already being repaid through the retention of ⁠proceeds from payroll-deducted loans that would otherwise ​have been transferred to Banco (Master)," the fund ​said.
• According to Rioprevidencia, this means the funds are available to the pension system's cash flow, and the investment is ‍expected to be ⁠fully settled within around two years.