On Thursday (9), the Federal Supreme Court will resume the ruling in the case discussing the correction index to be applied to the End of Service Compensation Fund (FGTS) accounts.
Analysis of the case was halted in April of this year, after a request for reconsideration by Minister Nunes Márquez.
President Luis Roberto Barroso announced on Wednesday (8) that this will be the first item on the agenda. Last week, there was a request from the government to remove this issue from the agenda and for the court to allow 30 days for negotiations.
Judgment has been suspended on the FGTS correction indicator in the STF
This is because, at the end of October, there were meetings between the ministries, representatives of the Caixa Econômica Federation and the trade unions to reach an agreement.
Two votes have already been submitted – that of Minister Barroso; Minister Andre Mendonça (See more below).
This measure, introduced by the Solidarity Party in 2014, questions the current model of readjusting amounts deposited in the fund, which are currently compensated on the basis of the so-called reference rate (TR) – a type of interest rate created in the 1990s, and used as a parameter for some… Financial applications
For the party, the correction form imposes losses on workers, since there is a difference between the ratio given by the applied formula, which uses TR, and inflation. This violates constitutional principles, such as property rights.
The FGTS was established in 1966 with the aim of protecting employees who have been dismissed without just cause. Workers can also withdraw the Fund’s resources while working in cases provided by law – where they are used, for example, to buy their own house.
The government also uses it, for example, to finance basic sanitation works, urban infrastructure and housing.
According to the established rules, FGTS has a return equal to the value of TR plus 3% per annum.
A change in the way income is calculated could have a billion-dollar impact on the fund’s cash flow, with an impact on public policies such as housing.
So far, two ministers – Luis Roberto Barroso, the rapporteur, and André Mendonça – have voted in favor of a definition that Social Security Fund rewards cannot be less than savings account rewards.
The rapporteur of the case, Minister Luis Roberto Barroso, stated in his vote that any change in the FGTS correction should not be applied until after the end of the trial in the Supreme Court.
Previous losses, if the rate changes, must be resolved by the legislature or by collective bargaining with the executive, in the opinion of the Minister.
In his vote, Mendonça said that “it is unconstitutional to use the real interest rate for monetary adjustment purposes.”
At the time of the ruling in April, the Workers’ Guarantee Fund Institute (IFGT) said more than 200,000 claims were pending and awaiting a ruling from the STF.
At the time, the Attorney General’s Office (AGU) told the STF that the impact of the ruling was R$661 billion, with Caixa providing about R$118 billion in cash to the fund. The Public Prosecutor’s Office of the National Treasury (PGFN) speaks of an impact of R$400 billion.
“The difference between the potential impact on the FGTS (R$661 billion) and its net worth could lead to the need for a contribution from the federation of approximately R$543 billion,” the AGU says.
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