PGBL: know all about the free benefit generator plan

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PGBL: know all about the free benefit generator plan

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The PGBL (Free Benefit Generator Plan) is one of the existing plans within the private pension plan — one of the most practical and popular ways of investing in the country. This model, however, is considered more suitable for people who file a complete Income Tax return, as it consists of a deduction from the taxable income of the IR — among other particularities.

Thinking about your retirement or any other long-term goals? So the private pension might be the path you've been looking for.

But, in addition to this initial decision, many first-time investors find themselves in a confused bifurcation within this type of investment: PGBL or VGBL?

Do these acronyms make any sense to you or do they just add up to questions?

Regardless of how much you know about social security and its complementary modalities, we invite you to follow along with this reading.

Below, we will explain to you all about PGBL! Check out!

What are the existing private pension plans?

To the invest the salary advance or your social security equity, you will face two types of plans:

  • VGBL, which stands for Free Benefit Generating Life;
  • PGBL, which corresponds to the Free Benefit Generator Plan.

Both can be chosen by you. What influences your decision are the characteristics of each one, which makes the investment more personalized according to your goals.

But, in common, PGBL and VGBL show that the entire process of your investment it invariably goes through two stages: investment and benefit.

This means that this entire first moment occurs during the monthly contributions you make. The second moment, in turn, consists of the period in which you decided as the period to enjoy the accumulated money.

And, then, the investor can choose to receive all the equity at once, or receive it as if it were a benefit — let's say, as a retirement more for you to have a stable and more secure income.

What are the differences between PGBL and VGBL?

Now, pointing out the differences between PGBL and VGBL, when invest in pension, it is worth noting that the PGBL is a model in which you can deduct the amount of your contributions when calculating Income Tax.

This will be limited to 12% of your gross annual income. And, in general, the PGBL proves to be advantageous only for those who already make a complete income tax return – and they are taxed at source.

For taxpayers who make the simplified statement (or not taxed at source), VGBL is more suitable. After all, its taxation only occurs on the capital gain in the period.

That's the big difference between PGBL and VGBL: whether you declare — or not — the full model when filing your Income Tax.

What else to know about the PGBL pension plan?

If you are still interested in opting for the PGBL (or the VGBL) of social security, it should be noted that there are other particularities that are of interest to you! Want to see it?


The PGBL plan has two rates for the investor:

  • administration fee;
  • charge rate.

What are? Basically, the first is a fee charged by the institution. that you close the plan of welfare.

At this point, pay attention: since this is the time when companies profit from their investment, the administration fee varies between institutions.. And so it's worth the in-depth research so that you don't spend too much of your income on it.

The charge rate, in turn, is the amount that will be deducted from contributions. This, in turn, serves the remuneration of the distributor or its stockbroker.

To do so, pay attention to the percentage that is pre-defined and agreed between you, and that will be used for it to act on your behalf during the entire period of the amount invested.

How to invest in the PGBL pension plan?

Let's understand now, how can you take your first steps to invest in a PGBL pension plan?

taxation model

With regard to social security taxation, the investor can choose between the progressive or regressive taxation. To make it easier, let's show the difference between them:

The progressive taxation table follows the same salary rates, what influences the amount you will redeem, at the end of the period. It becomes a more valuable option if you believe that you will have an income of less than R$4,000, for example, because the income tax rate will also be proportional to your monthly average;

The regressive taxation table, in turn, aims to encourage long-term investments (and not short term investments, therefore). That's because, as the years go by, the rate also reduces, so you can pay a lower amount, in taxes, if you keep your resources invested for a long time.

If you choose the regressive table and have to withdraw the money invested in two years, for example, the rate will be much higher than that practiced if you redeem the investment after ten years or more.


Another interesting attraction of social security is the possibility of change your plan according to your interests. Just pay attention to the fact that you can change plans and institutions — and even the progressive to regressive taxation model (not the opposite) — but not the plans themselves.

For example: if you started the investment with the PGBL model, with the PGBL you will remain until the end of your investment.

With all this, it is important to know which investment model will best adapt to your investor profile. An example: if you are not sure that you will keep your PGBL invested for a long time, a good tip is to keep the model progressive.

After all, if you withdraw your funds in one or two years, for example, the rate charged will be higher than the average for your progressive regime. And that will generate more stability so that you can have your investments under control, and always with a more interesting return.

Now that you know what PGBL is and what the big difference is between it and the VGBL model — when it comes to investing in pensions — how about subscribing to our newsletter? To do this, just fill in your requested data at the bottom of our blog to receive, directly in your inbox, all our tips and news. Until then!


HR Consultant UK can help if you have any questions about PGBL: know all about the free benefit generator plan
. Our HR consultant in London can assist you if you live in London. Suppose you live further afield thats not an issue! Visit our HR Consultants Near Me page to find the best consultancy nearest to you.
See you next time!



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