October 19, 2016 / 12:01 AM / in a year

Brazil court says Vale can seek end to support for pension plan

RIO DE JANEIRO, Oct 18 (Reuters) - Brazilian mining company Vale SA said on Tuesday that a Sao Paulo court overturned an injunction preventing it from ending support for a pension plan at its fertilizer unit.

The plan’s manager, Petros-Fundacao Petrobras de Seguridade , sought the injunction in August on the grounds that Vale’s support for the fund should not be ended before 843 million reais ($264 million) of disputed payments are resolved.

Petros could not immediately be reached for comment after normal business hours.

Vale inherited the fund, which holds private pension assets accumulated by some employees at a company known as Ultrafertil before it was purchased by Vale, the Rio de Janeiro-based miner said in a statement.

Petros is the private pension fund for state-led oil company Petroleo Brasileiro SA and the second largest pension fund in Brazil. It also manages money for third parties, including the disputed plan, Plano Petros Ultrafertil.

Petros and other pension funds at state-controlled companies are under investigation for possible involvement in a giant corruption scheme at Petrobras, as the oil company is known. In June, after years of money-losing investments, Petros was found to have run up a 22.6 billion real ($7.1 billion) actuarial shortfall by the end of 2015, 40 percent more than the legal limit.

The court ruled that Vale could continue with its efforts to end support for the Vale Fertilizantes pension plan and that any eventual debts to the plan and its members would be worked out under rules set down by Brazil’s private pension fund regulator Previc.

Private pension plans like the one for which Vale hopes to end support, are considered complementary to government-mandated pension benefits and companies can change the plans to which they contribute on behalf of employees.

$1 = 3.1855 Brazilian reais Reporting by Jeb Blount; Editing by Peter Cooney

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