However, the official earnings reported by FGTS are well below these shown amounts because the Brazilian government uses this money to fund its own projects like “Minha Casa Minha Vida”
Now here is the catch: at the same time that FGTS has been profitable by investing in government securities, the fund paid a very low return to the workers (which own the money). The law says that the return should be the TR (Reference Rate) plus 3% per year, but the fund paid back less than 4% in 2010… lower than inflation!
What ‘s the takeaway? FGTS is very profitable, but for the government. So far, not a penny of that profit was credited to the accounts of workers, who are losing buying power as the inflation (7%+) is higher than the return (4%) they are earning in the fund.