Private pension plans enter a "loot-grab" mode after IOF tax on VGBL (Variable Annuity Life Insurance)

The private pension industry has definitively entered a game of stealing money, with insurers reinforcing attack and defense strategies to capture funds through portability, promotional campaigns, and financial benefits.

The trigger for this change was the imposition of the tax on financial transactions ( IOF ) on contributions to VGBL (acronym for Vida Gerador de Benefício Livre plan), a measure that turned the sector upside down.

With no new money coming in, the market is now competing for the existing stock – more than R$1.5 trillion in assets. The consequence is that fundraising has dried up, competition has intensified, and even the giants, traditionally more defensive, have been forced to change their approach. What was once an industry driven by new money now functions as an arena for asset redistribution.

“We expect an even more competitive market regarding portability, and we are strengthening our offensive and defensive strategies to maintain positive net inflows,” says Amâncio Paladino, director of XP Seguros.

Since June 2025, when the government instituted a 5% IOF tax on VGBL (Variable Annuity Life Insurance) contributions exceeding R$ 300,000 per CPF (Brazilian individual taxpayer ID) per year within the same insurance company, promotional campaigns have multiplied, offering cashback, prizes, exclusive benefits, and reduced rates to attract customers willing to transfer their plans.

From January 1, 2026, the limit will increase to R$ 600,000 per individual taxpayer ID (CPF) per year, considering the total amount invested across all insurance companies. “This tax on the principal amount is very penalizing, it has completely stalled the investment market, and clients are seeking other solutions. It was a very difficult year and there are no prospects for change in 2026,” says Marcelo Mello, CEO of SulAmérica Vida, Previdência e Investimentos.

The imposition of IOF tax on VGBLs interrupted a continuous growth cycle and led, for the first time in the historical series, to a significant slowdown. The impact is profound because VGBLs account for approximately 90% of the entire industry.

Data from the National Federation of Private Pension and Life Insurance (FenaPrevi), from October, shows redemptions of R$ 3.1 billion in the month and R$ 4.2 billion in the accumulated year, a drop of 92% compared to 2024. Gross inflows totaled R$ 132 billion, a decrease of 18.6% year-on-year.

According to the government, the goal was to tax large fortunes. But, in practice, the measure affected the middle class, precisely the segment of the population that sustains the private pension market. The reason is that Brazilians tend to make significant contributions only during extraordinary liquidity events.

"In Brazil, a culture of saving little by little for the long term has not been created. It is events such as inheritance, sale of property, profit-sharing, or voluntary redundancy programs that generate these resources," says João Batista Ângelo, statutory director of FenaPrevi.

Data from the organization shows that 80% of contributions above R$ 600,000 are made only once by the insured. According to estimates by FenaPrevi, the measure could cause losses exceeding R$ 500 billion for the sector over ten years.

Attack and defense

Given this scenario, insurance companies know they cannot count on a reversal of the IOF (Tax on Financial Operations) in the short term. For 2026, the priority is to show better results even with a smaller market. The strategy becomes encouraging recurring investments (which requires financial education) and competing for the money already in the system.

Not even BrasilPrev , the country's largest insurance company with R$454 billion in assets and approximately 27% market share, was left out of the new dynamic. Traditionally focused on new entrants through Banco do Brasil's branches, the company began to pay closer attention to portability.

“With the IOF tax limitation, any insurer that wants to grow will have to focus on portability,” says Mauro Emanuel Guadagnoli, commercial superintendent of BrasilPrev. “We have always led in new enrollments and we want to continue to do so.”

The insurance company is expanding its portfolio, which currently includes more than 50 funds, among products from BB Asset and third parties, and has strengthened its financial advisory services. In partnership with Banco do Brasil, it has launched campaigns offering Livelo points and travel raffles for those who make investments until January.

Bradesco also intensified its operations. Bradesco Vida e Previdência, with R$ 365 billion in reserves, hired its first digital influencer this year to talk about retirement planning in a simpler way, in addition to expanding partnerships with investment firms.

“The fight for portability has intensified considerably. But we believe the game is less about price and more about benefits and relationships,” says Estevão Scripilliti , director of Bradesco Vida e Previdência .

Itaú Vida e Previdência, with over R$ 335 billion in assets, is betting on the combination of its large branch network, investment specialists, and digital expertise to stem exits and gain ground on competitors.

“We are paying attention to market campaigns, but we prefer to focus on long-term relationships,” says Rogério Calabria, superintendent of investment and pension products at Itaú.

Among independent insurers, Icatu is diversifying its channels and expanding access. With over 150 managers on its platform, the insurer has reduced the minimum entry ticket to R$ 50.

“To win over the customer, we need to reach them. That's why we are expanding partnerships with investment firms and brokers, which already total more than 2,000,” says Henrique Diniz, director of pension products at Icatu.

XP follows a similar strategy, using its advisory network and studying specific campaigns for 2026. "In the end, there will be margin compression, which is good for the client," says Paladino.

SulAmérica, for its part, avoids entering into a price war. "We're not going to compete on portability fees with intermediaries. This type of incentive can go against the client's interests," says Marcelo Mello.

According to data from Susep up to September 2025, the insurance companies that received the most VGBL (Variable Life Insurance) transfers by amount were XP, Itaú, BTG Pactual, Bradesco, and Icatu. Those that transferred the most funds were BrasilPrev, Icatu, Bradesco, SulAmérica, and XP.

IOF reversal?

Meanwhile, the sector is maintaining dialogue with SUSEP (the Brazilian insurance regulator), the government, and the National Congress to try to eliminate the tax. The central argument is that the measure penalizes the long-term savings of the middle class and pushes resources towards tax-exempt assets, short-term investments, or even out of the country.

“If the goal was to raise revenue, it won’t work. We don’t want to adjust the rule, but to eliminate it,” says Alexandre Leal, technical director of CNseg.

João Batista Ângelo, from FenaPrevi, points out that there is no pension model in the world that taxes the principal upon entry and warns of the legal uncertainty created by the change.

"It's like this today, it could be different tomorrow. How can you trust investing for 30 years?", he says.

Even so, the industry recognizes that it needs to reinvent itself. One way is to broaden access for the C class and educate new generations about regular contributions. Another is to further develop the PGBL market, which allows for income tax deductions and still has significant room for growth.