Caixa Starts Distribution of Nearly R$ 13 Billion in FGTS Profits

FGTS Profit Distribution Approved: Millions to Benefit from R$12.9 Billion Payout

Brasília, Brazil – In a significant move for millions of Brazilian workers, the FGTS (Fundo de Garantia por Tempo de Serviço) curator board on friday, the 25th, officially published its resolution approving the fund’s 2024 balance sheet. This paves the way for a substantial distribution of profits, with R$12.929 billion, representing 95% of the fund’s earnings from the previous year, set to be allocated to eligible FGTS account holders.

The distribution, confirmed on Thursday, the 24th, will see the profits divided proportionally based on the balance of each worker’s FGTS account as of December 31st of last year. In essence, individuals with larger balances will receive a more substantial share of the distributed profits.

Understanding Your Payout:

To calculate an individual’s portion of the profit, workers can multiply the balance of each FGTS account thay held on December 31st by a specific factor: 0.02042919. This translates to practical terms: for every R$1,000 in an account, the holder will receive an additional R$20.43. those with R$2,000 will see a credit of R$40.86, and an account balance of R$5,000 at the end of last year would result in a credit of R$102.15.

FGTS Performance Surges,Outpacing Inflation

The decision to distribute 95% of the R$13.61 billion profit generated by the FGTS last year will considerably boost the fund’s annual performance. This year,the FGTS is projected to yield 6.05%, a figure that comfortably surpasses the official inflation rate of 4.83% as measured by the National Consumer Price Index (IPCA) for 2024.

A Look at Investment Avenues:

While the FGTS’s enhanced performance is positive news, its worth noting that savings accounts, influenced by the Selic rate (Brazil’s basic interest rate), achieved a yield of 6.41% last year.When the Selic rate exceeds 8.5% annually, savings accounts typically offer a monthly yield of 0.5% (equivalent to 6.17% annually) plus the Referential Rate (TR).

By law, the FGTS’s base yield is 3% per year plus the TR. Though, the introduction of profit distributions, a practise in place as 2017, has demonstrably improved the fund’s overall yield. These distributed profits are directly incorporated into the existing account balances, providing an immediate benefit to workers.

Future Outlook and Protective Measures:

The Federal Supreme Court (STF) has mandated that the FGTS must provide a minimum correction equivalent to the IPCA. While this ruling is not retroactive to past account balances, it is indeed applicable from the date of the court’s decision.In scenarios where the combined yield from conventional interest and profit distribution falls short of the IPCA, the curator board is tasked with implementing compensatory measures to ensure the fund’s correction meets the IPCA benchmark. This regulatory framework aims to protect the purchasing power of workers’ FGTS savings over the long term.

How does eligibility for FGTS profits depend on account activity?

Understanding the FGTS Profit Distribution

Caixa Econômica Federal (Caixa) has commenced the distribution of approximately R$ 13 billion in profits from the Fundo de Garantia do Tempo de Serviço (FGTS), or Severance Indemnity fund, to over 93 million Brazilian workers. This distribution represents profits earned during the 2023 fiscal year and marks a notable financial boost for eligible individuals. The FGTS is a crucial social security mechanism in Brazil, designed to protect workers in case of job loss. Understanding the details of this profit distribution is vital for all eligible brazilians.

Who is eligible for FGTS Profits?

Eligibility for receiving a share of the FGTS profits is straightforward. Any worker with an active or inactive FGTS account as of December 31, 2023, is entitled to a portion of the distributed funds. This includes:

Employed Workers: Individuals currently employed with a formal work contract.

Unemployed Workers: Those who have been laid off or had their contracts terminated.

Retired Workers: Pensioners who previously contributed to the FGTS.

Individuals with Inactive Accounts: Even those who haven’t recently used their FGTS accounts are eligible.

It’s significant to note that simply having an FGTS account isn’t enough; the account must have been active at some point during 2023.

How are FGTS Profits Distributed?

The distribution of FGTS profits isn’t a flat amount. The total profit is divided proportionally based on the balance in each worker’s FGTS account. Caixa uses a specific formula to calculate each individual’s share, taking into account the total amount deposited in their account throughout the year.

Here’s a breakdown of the distribution process:

1. Total Profit Calculation: Caixa calculates the total profit earned by the FGTS fund during the reference period (2023).
2. Proportional Calculation: each worker’s share is determined by dividing their FGTS account balance by the total balance of all eligible accounts.
3. Taxation: FGTS profit distributions are subject to income tax, but frequently enough fall within tax-exempt thresholds for many workers.
4. Payment Release: Funds are deposited directly into the worker’s FGTS account.

Accessing Your FGTS Profits: Methods and Timeline

Workers can access their FGTS profits through several convenient methods:

FGTS App: The official FGTS request (available for Android and iOS) is the quickest and easiest way to check your balance and access the funds.

Caixa Website: Log in to your Caixa account online to view your FGTS balance and transaction history.

Caixa Branches: Visit any Caixa branch nationwide with your identification documents.

FGTS Withdrawal Agents: Authorized lottery houses (casas lotéricas) also facilitate FGTS withdrawals.

the distribution began on July 26, 2025, and will continue according to a schedule based on the final digit of the CPF (Brazilian individual taxpayer registry identification). This staggered release aims to manage the high volume of transactions.

FGTS: A Deeper Look at the Severance Indemnity Fund

The FGTS system was established in 1967 to provide financial security for Brazilian workers. Employers are legally obligated to deposit 8% of a worker’s monthly salary into their FGTS account. This fund accumulates over time and can be withdrawn under specific circumstances,such as:

Job Loss: Workers who are dismissed without just cause are entitled to withdraw the full amount in their FGTS account.

Retirement: Upon retirement, workers can access their accumulated FGTS funds.

Home Purchase: FGTS funds can be used to finance the purchase of a primary residence.

Serious Illness: In cases of severe illness (for the worker, their spouse, or dependents), FGTS funds can be used to cover medical expenses.

Impact of the Distribution on the Brazilian Economy

The injection of nearly R$ 13 billion into the Brazilian economy is expected to have a positive impact on consumer spending and economic activity. Analysts predict that the funds will primarily be used for:

Debt Payment: Many Brazilians are likely to use the funds to pay off existing debts, such as credit card bills and loans.

Essential Goods: A significant portion is expected to be spent on essential goods and services, providing a boost to retail sales.

Savings: Some individuals may choose to save the funds for future investments or emergencies.

This distribution is a key component of the Brazilian government’s efforts to stimulate economic growth and provide financial relief to workers.

Recent FGTS Updates and Changes

In recent years, the FGTS system has undergone several changes, including:

Digital FGTS: The launch of the digital FGTS account, allowing for easier access and management of funds.

Emergency Withdrawals: During the COVID-19 pandemic, the government authorized emergency withdrawals from FGTS accounts to provide financial assistance to those affected by the crisis.

Investment Options: Expansion