What changes with the Supreme Court’s decision on the FGTS?

According to the decision, FGTS accounts cannot be corrected solely by the Reference Rate (TR) – a rate with a value close to zero –, as is currently done. The STF decided that the accounts must guarantee real correction following the Broad National Consumer Price Index (IPCA) – which is the main indicator of inflation in the country.

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Under the new rule, the TR remains at an additional 3% per year and the FGTS balance must be corrected, at least, for inflation, following the IPCA, calculated by the Brazilian Institute of Geography and Statistics (IBGE).

If the current calculation does not reach the IPCA, the FGTS Board of Trustees must establish the form of compensation. The calculation proposal was suggested to the STF by the Attorney General’s Office (AGU), after conciliation with trade unions during the process.

Furthermore, the new form of correction will not be applied to retroactive values. In other words, it applies to new deposits following the Supreme Court’s decision.

The new correction should come into effect after the publication of the trial minutes – which should occur in the next few days, according to the STF press office.

Purchasing power guarantee

The advisor to the Federal Economic Council (Cofecon), Ana Cláudia Arruda, explains that the correction of the FGTS by the IPCA is a long-standing demand from Brazilian workers. “FGTS has always been the worst remuneration in the financial market, even being below savings”, she states.

For her, the new rule is beneficial for workers, while this public has suffered significant losses over the last few years without correction for inflation.

“This decision by the Supreme Court aims to minimize the financial losses that workers should have, which are historic losses due to inflation and high hyperinflations in the Brazilian economy over the last few decades”, highlights Ana Cláudia Arruda.

In a written statement, the Union’s attorney general, Minister Jorge Messias, assesses that the decision benefits several sectors.

“The workers, those who finance their homes and employees in the construction sector win”, mentions the minister.

Impact on the economy

The FGTS is collected directly from the salaries of workers who have a formal contract. The new rule makes it possible to use withdrawals to move the economy, as explained by Ana Cláudia Arruda.

“It is, therefore, an important change and one that will enable Brazilian workers to receive better remuneration from this resource, therefore enabling better financial accumulation for important moments in their lives”, he points out.

The administrative director of Line Bank BR, Helio Lima, highlights that the decision will impact the government’s social programs, and that the government uses FGTS resources for this purpose.

“This will lead to greater expenses, so it will probably increase public debt and generate an increase in the interest rate on real estate financing for families with incomes of up to R$2,000”, he emphasizes. “We can expect an increase in financing rates and basic sanitation in the coming months, as this happens through the FGTS fund”, adds Helio Lima.