Pension Funds Disclosure: Does Managers’ Knowledge Matter?

Abstract

This study aimed to analyze whether formal managers’ qualifications explain the Brazilian pension funds’ disclosure level. It started from the assumption of information asymmetry between stakeholders. We also recognize that the problems related to asymmetry in companies participating in the capital market, commonly pointed out in the literature, would not behave in the same way in pension funds. Other factors explain the disclosure in these organizations, like the qualification of managers. We calculated the disclosure level for each of the 209 Brazilian pension funds that made up the sample. We analyzed the dates using multiple linear and logistic regression as a robustness test. The results indicated that the formal qualification of managers, characterized by master’s and or doctoral degrees, has a positive relationship with the level of disclosure of pension funds, indicating that the greater the formal qualification of the manager, the greater the level of disclosure. Thus, this study shows insights that the explanations about company disclosure given in the literature, especially its effect on market value, are not necessarily the same in pension funds, which are explained by other factors, such as the qualification of managers. The results can contribute to regulatory bodies to formulate new rules that favor the capability of managers, in addition to identifying the information demanded by stakeholders, allowing for an increase in the level of disclosure and a reduction in information asymmetry, as well as the improvement of governance practices.

1. Introduction

Brazilian pension funds accounted for 13.1% of Brazil’s Gross Domestic Product (GDP) in 2020, with total assets totaling USD 187.7 billion. If Brazil were part of the Organization for Economic Cooperation and Development (OECD), it would be among the top 15 countries in assets managed by pension funds (OECD, 2021). There are about 3.5 million people directly involved in the country’s pension funds, including beneficiaries and participants. (ABRAPP, 2021). In addition, the Social Security Ministry (MPS) estimates that the Brazilian fertility rate will rise from 4.1 in 1980 to 1.5 in 2050.

On the other hand, women’s life expectancy can increase from 77.6 in 1980 to 87 years in 2050, and, for men, from 75.2 years in 1980 to 82.7 years in 2050 (MPS, 2009). The reduction in the fertility rate and the increase in life expectancy, combined, determine that there will be more beneficiaries than contributors in the General Social Security System (RGPS) in the coming years. This context gave rise to the reform of the Brazilian public pension (Constitutional Amendment n. 103, 2019). However, insecurity and uncertainty make it plausible that a considerable portion of the population chooses to adhere to the Complementary Pension Scheme (RPC). This scenario is both favorable and challenging for Brazilian pension funds.

However, Brazilian legislation delegates to pension fund sponsors the power to choose their managers (agents) through the appointment of most of the members of the deliberative councils (Complementary Law n. 108, 2001; Complementary Law n. 109, 2001; Dias, 2006). Thus, the beneficiaries of the funds (participants and beneficiaries) have little effective influence over the referred managers. (Stewart & Yermo, 2008). Faced with this situation, problems of conflict of interest may arise from the assumption of information asymmetry (Akerlof, 1970; Jensen & Meckling, 1976; Drew & Stanford, 2003; Besley & Prat, 2003). Information asymmetry may be related to adverse selection and moral hazard issues (Akerlof, 1970; Verrecchia, 1983, 1990; Wagenhofer, 1990). In the case of Brazilian pension funds, the employee of the sponsoring company who joins the benefit plan will only be able to carry out the portability of their program after the end of the employment relationship with the sponsoring company (Complementary Law n. 109, 2001). Therefore, the employee can only join the plan, and if he chooses not to, he no longer earns the sponsor’s contribution. In the case of the employee joining, the problem of moral hazard remains more significant. Moral hazard is associated with opportunistic behavior, which manifests in disclosing selective, distorted, or incomplete information to deceive the other party, increasing transaction costs (Williamson, 1985).

In the context of Pension Funds, inefficiency and non-optimal allocation of resources may not be consequences only of adverse selection and moral hazard. These organizations have dispersed ownership (Harbrect & Murray, 1961; Catalan, 2004; Caamaño, 2007; Kowalewski, 2012). The more participants, the more dispersed the ownership. They also have different stakeholder profiles: sponsor, owner, and beneficiary (Clark, 1998; Blake et al., 1999; Catalan, 2004; Hebb, 2006; Kowalewski, 2012; Rozanov, 2015; M. G. S. Tan & Cam, 2015), in addition to having a long-term nature, as participants make their contributions and expect to receive the benefit upon retirement (Howell, 1958; Clark, 1998; Vittas, 2002; Mitchell et al., 2008). Additionally, they do not have shares listed on the capital market. Considering these characteristics that differentiate these organizations from companies participating in the capital market, these problems may have another origin: The behavior and level of knowledge and training of managers.

As an example of opportunistic behavior, directors and directors of the leading Brazilian pension funds (FUNCEF, PETROS, and PREVI) were denounced by the Federal Prosecutors for reckless or fraudulent investments in equity investment funds (FIP), generating losses of billions of Reais (Federal Prosecutors, 2016). One of the main ways to mitigate situations of this nature is through disclosure (Verrecchia, 2001). The quality of disclosure resides in the factors that lead a manager to disclose or withhold information. When analyzing which information to inform and retain, the manager considers aspects of the organization and the possible effect on the share price in an active market. The information receiver evaluates the disclosure made and infers what has not been revealed. (Verrecchia, 1983). This context reflects on the organization’s cost of capital (Wagenhofer, 1990; Jankensgård, 2015). However, the owner’s cost assumption affecting the share price is not necessarily valid for Brazilian pension funds because they are constituted by non-profit foundations or civil societies (Complementary Law n. 109, 2001). Hence, if conventional incentives for information disclosure by pension funds are weak, other motivating factors for which information transfers occur should be considered (Spence, 1978).

Problems in the governance of pension funds could be mitigated with better levels of qualification and knowledge of the governing body (OECD, 2016). In other words, the mitigation of information asymmetry could be determined, among other factors, by the level of qualification of fund managers. This is because managers with a higher level of education would better understand the operations of pension funds and would have more clarity on the need for disclosure. In addition, it would increase the possibilities of these professionals in terms of employability, reducing the risk of withholding information that could devalue their functions and cause unemployment. Experience and education shape managers’ values and cognitive bases, affecting their management styles (Bamber et al., 2010). So, this background can influence their decisions. From this perspective, this study aimed to analyze whether the level of formal qualification of managers explains the level of disclosure of Brazilian pension funds. Thus, this analysis can lead to the understanding that the level of qualification leads to disclosure that meets the expectations of participants and, consequently, shapes the behavior of managers, leading to better allocation of resources and avoiding governance problems. This path can lead to ensuring the payment of benefits to participants.

Therefore, we analyzed by the Ordinary Least Squares (OLS) method the multiple linear regression of a sample composed of 209 Brazilian pension funds, whose data refer to 2015. We also analyzed the data by the logistic regression method (LOGIT) as a robustness test. Finally, the level of disclosure of pension funds was measured using indicators developed by Silva (2019). The results revealed that the formal qualification of managers, characterized by training in master’s and/or doctoral degrees, has a positive relationship with the level of disclosure of pension funds, indicating that the greater the formal qualification of the manager, the greater the level of disclosure. Similarly, the logistic regression (LOGIT) showed that the more managers with master’s and/or doctorate degrees, the more likely it is to raise the pension fund’s disclosure level.

Such findings allow expanding the perspective on the problem of information asymmetry based on adverse selection and moral hazard in traditional literature. (Arrow, 1963; Akerlof, 1970; Verrecchia, 1983, 1990; Wagenhofer, 1990; Stiglitz, 2000; Dye, 2001). This perspective recognizes that issues related to the inadequate management of resources and the low level of disclosure are not restricted to moral hazard and adverse selection problems but may also be linked to the formal qualification of the governing body within the scope of pension funds. In other words, it is also about the influence of knowledge and information on managers’ decisions. In addition, this study can contribute to inspection and regulatory bodies and pension funds in the development of rules and governance practices that favor the formal qualification of managers.

This study is subdivided into five sections, the first being this Introduction. The second section presents the Theoretical Framework and the third, Materials and Methods. The fourth section addresses Results and Discussion, and, finally, the fifth section presents the conclusions of the study.

2. Theoretical Framework

One of the main characteristics of these funds is their long-term nature, that is, the long accumulation period for subsequent distribution of benefits and, consequently, the predictability of their distribution (Howell, 1958; Clark, 1998; Vittas, 2002; Mitchell et al., 2008; Sithole & Lotter, 2024). The funds have the responsibility to protect and, in some cases, guarantee the retirement income promised to their participants (Clark, 2004; Aslan, 2023; Tomassetti, 2023). Funds have characteristics that are almost unique among institutional investors, as they are not regulated as investment funds or financial institutions and, therefore, are not subject to the accounting regulations of these sectors (Andrews, 1959; Clark, 1998; Blake et al., 1999; Catalan, 2004; Hebb, 2006; Kowalewski, 2012; Rozanov, 2015; M. G. S. Tan & Cam, 2015). The social interest, the amount involved, and the number of operations and investments made by these organizations require the disclosure of information to interested parties, mainly beneficiaries and participants.

Financing and investment drive transformations of contributions into retirement income (Klumpes & McCrae, 1999). However, this is not always adequately understood by members of the governance of pension funds. (Musalem & Palacio, 2004). Individuals occupy positions on pension fund boards for reasons beyond the skills needed to properly understand organizational, financial, and investment issues (Musalem & Palacio, 2004; Stewart & Yermo, 2008), and, consequently, to disseminate necessary information.

Research promoted by the UK Treasury and carried out by the consultancy Myners, with managers of 1580 pension funds in that country, identified that most of these professionals are not specialized in investments, in addition to having a rudimentary knowledge of advanced financial instruments (The United Kingdom, 2004, 2008). That research also revealed that managers had little initial training for the exercise of their positions and pointed out that the skills and knowledge of managers are critical elements for the success of the management of pension funds. Moreover, even those members appointed for their expertise and experience are often not well prepared for the responsibility because their understanding is dated, narrow, or does not translate well into the technological world of pension administration (Musalem & Palacio, 2004; Güllü, 2016; Andonov et al., 2018).

On the other hand, the growing volume of assets managed by pension funds brings the complexity of services and financial products available to the funds. Thus, the need for managers with a higher level of qualification increases (Clark et al., 2006; Stewart & Yermo, 2008; Rozanov, 2015). Qualification is a fundamental requirement for managers to carry out their activities (PREVIC, 2012). For the International Organization of Pension Supervisors (IOPS), education should be at the heart of pension fund approaches to improve governance standards (IOPS, 2008).

Empirical studies demonstrate the influence of training on the decisions made by managers. In a survey of 88 pension fund executives from Australia, New Zealand, Europe, and the United States, he concluded that the biggest obstacle in the education and training of new directors, especially those with up to two years of mandate (Ambachtsheer et al., 2006). Clark’s (2007) study about English pension funds identified that many managers did not have basic knowledge about investment strategies. Stewart and Yermo (2008) report that basic training for managers attributed improvements in UK pension fund deficit levels and strengthened their governance. The study by Bamber et al. (2010) points out that managers develop unique disclosure styles, and their decisions reflect specific characteristics such as education. The survey by Güllü (2016) pointed out that the training of managers has a positive impact on the return on investment of the Turkish banking sector. The survey carried out by Andonov et al. (2018) in North American pension funds identified that the lack of financial experience contributes to the poor performance of the directors of these funds. Aslan (2023), when recognizing the agency problem in pension funds, mentions that one of the vulnerabilities of the governance structure of these organizations is the inability of the governance structure to prevent the hiring of agents with inadequate qualifications.

Regarding Brazilian legislation in the context of this study, it is noteworthy that it does not require specific training to work in the management of pension funds, nor does it require previous experience in the referred organizations. The only qualification required is higher education in any field of knowledge (Complementary Law n. 108, 2001; Complementary Law n. 109, 2001). This contrasts with the demands of today’s economy that order qualified and experienced managers (Volonté & Gantenbein, 2016). More qualified boards become a market signal for more robust corporate governance (Pombo & De La Hoz, 2021). Better levels of qualification would increase managers’ understanding of requirements and recommendations on what should and should not be disclosed. As an example, compliance with the recommendation of the PREVIC Guide (PREVIC, 2012) for disclosing the minutes of meetings of the deliberative and fiscal councils and discussions of the executive board is cited. Furthermore, the literature (Graham et al., 2005; Hess, 2005; Demerjian et al., 2013) indicates that better levels of manager qualification improve judgment and decision-making, and, therefore, managers do not fear that their actions and decisions, contained in the minutes, are evaluated by those assisted and participants. For example, Cho et al. (2025) suggest that better-trained executives are more likely to significantly influence strategic decision-making and the financial stability of companies. On the contrary, they prefer to expose the excellent work performed to build an external reputation and facilitate eventual replacement in the market.

Qualified managers can understand the complexity of operations and relationships that make up the context of pension funds. In addition, this qualification will help them monitor and supervise specialists’ activities, such as auditors, actuaries, and other external consultants. This is the conception of what Foucault calls “power-knowledge,” that is, being able to do something only insofar as one can understand it (Feder, 2018; Taylor, 2018). Having information means power. Power established by knowledge given by information. Knowledge is the space in which the subject can take a position to speak about the objects he deals with in his discourse (Foucault, 1995). In other words, the power-knowledge attributed to managers by information translates into the ability to understand the environment that surrounds them, and enables them to act more appropriately, increasing the quality of information (Dass et al., 2014) and, consequently, reducing asymmetry. Managers with academic knowledge are independent and critical thinkers with opinions and judgments. (Jiang & Murphy, 2007). These managers have unique characteristics, look at problems differently than non-academic managers, and provide differentiated analytical perspectives (Francis et al., 2015). They are also likely to be more aware of the penalties when the organization does not meet its outcome forecasts (Bamber et al., 2010). These situations can directly influence the disclosure decisions of the funds they manage.

Thus, this study focuses on formal education, understood as managers who have a master’s or doctorate. In the view of Ngaka et al. (2012), formal education is the type of education that is hierarchically structured, certified, and follows a predetermined curriculum. In this context, we chose to focus on master’s and doctorate degrees, considering that, in Brazil and around the world, managers naturally have, or by regulation, a higher education degree, as already mentioned.

A higher level of qualification can also minimize any future relocation concerns. The study by Graham et al. (2005) points out that career concerns and external reputation are essential drivers of the information reported in financial reports. However, formal qualification is expensive, and the manager will only invest in his capability as he identifies advantages, such as an increase in external reputation (Spence, 1978). Liu et al. (2024) identified that the higher the educational level of executives, the greater the frequency of corporate disclosure and the greater the number of positive and negative statements released. Marchetti et al. (2018) state that more qualified and highly professional directors tend to provide more information to the market. They conclude that the presence of independent directors only increases corporate disclosure when these directors have a high level of expertise. According to the authors, one possible explanation for this finding might be that directors who have invested significantly in their education and in obtaining specific professional qualifications and titles tend to be more conservative in a rigorous and extensive interpretation of the law and applicable rules, or generally more attentive to market reputation, therefore requiring the corporation to disclose more.

Thus, considering that the qualification of managers (deliberative councilors, fiscal councilors, and executive board) can affect the understanding and interpretation of the general environment of pension funds, and that disclosure depends on the discretion of these managers, and that a relationship can be established between the training of managers, disclosure of pension funds, and information asymmetry, despite not having identified, in the literature review, previous studies on the subject, the following hypothesis is established:

H1. 

There is a positive relationship between the level of qualification of managers and the level of disclosure of pension funds.

3. Materials and Methods

3.1. Model and Variables

Based on the constructed hypothesis, an empirical literature review was carried out on the variables used, which gave rise to the econometric model presented below:

$${ND}_i=ß0+ß1\left({GESTORMESTRDOUT}_i\right)+{\sum }_{k=1}^6{\{\gamma }_{k}Contro{l}_k{,}_i\}+{\epsilon }_i.$$

(1)

ND_i consists of the dependent variable, representing the level of pension fund disclosure. It was calculated from 48 indicators, representing information required by beneficiaries (participants and beneficiaries) of pension funds, according to Silva (2019) and Medeiros et al. (2025). The index was calculated based on the understanding and needs of the main users of the information: participants and those assisted. The following five stages were adopted for its construction: 1st stage: For the individual and detailed examination of the Annual Information Reports (AIRs); 2nd stage: For the examination of the specific legislation on pension fund disclosure, a distinction was made between what was mandatory and recommended disclosure; 3rd stage: For the evaluation and validation of the indicators with specialists, a questionnaire was developed based on the list of indicators created in the previous stages; 4th stage: Survey for the evaluation and validation of the indicators with the primary stakeholders (retirees and participants), and, finally, 5th stage: Principal Component Analysis. To finalize the list of 48 indicators, an analysis of the indicators constructed from the AIRs was carried out, aiming to verify whether the respective pension funds evidenced the economic–financial information demanded by the primary stakeholders, and considered information classified as mandatory, voluntary, and voluntary but recommended by regulatory bodies, according to

Table 1. List of Indicators.

INDICATOR		GUY	INDICATOR		GUY
1	TQSA - Technically Qualified Statutory Administrator	R	25	List of Debts (Contracts and Debit Balance) of the Sponsors	V
2	Changes to the Board of Directors	V	26	List of Sponsors/Institutors	V
3	ARBP -Administrator Responsible for The Benefit Plan	R	27	Manifestation/Opinion of the Deliberative Council	O
4	Minutes of the Ordinary Meeting of the Executive Board	V	28	Message from the Board of Directors	V
5	Minutes of the Ordinary Meeting of the Deliberative Council	R	29	Mini curriculum of the Executive Board	R
6	Minutes of the Ordinary Meeting of the Fiscal Council	R	30	Explanatory Notes	O
7	Balance Sheet (BAL SH)	O	31	Number of Participants	V
8	Certification of Directors	R	32	Organization chart	R
9	Composition of the Council and Executive Board	R	33	Actuarial Opinion Report	O
10	Administrative decisions	V	34	Opinion of the Supervisory Board	O
11	Statement of Changes in Net Assets of Benefit Plan (SOCNA)	O	35	Prospects for next year	V
12	Statement of Changes in Social Assets (SOCSA) - consolidated	O	36	Administrative Management Plan (AMP)	O
13	Statement of Technical Provisions of the Benefit Plan (SOTP)	O	37	Terms of Office of the Executive Board	V
14	Statement of Net Assets of Benefit Plan (SONA)	O	38	Term of Office of the Deliberative and Fiscal Council	V
15	Cash Flow Statement	V	39	Number of Benefits Granted in the Year	V
16	Statement of the Administrative Management Plan (SOAMP) - consolidated	O	40	Number of Human Resources	V
17	Administrative Expenses	O	41	Report of the Independent Auditors	O
18	Outsourced Management	R	42	Specific Report on Internal Controls	R
19	Glossary	V	43	Remuneration of Directors	V
20	Information if the board member is a sponsor or participant representative	V	44	Summary of Investment Policy	O
21	Contact Information/Communication Channels	R	45	Summary of the Investment Statement	O
22	Information on document changes (Statute/Regulation)	R	46	Financial Health of the Sponsor	V
23	Information about elections/nomination/selection - Deliberative and Fiscal Council	R	47	Taxation System of plans	V
24	Information about elections/nomination/selection - Executive Board	R	48	Total Benefits Granted/Paid	V

Note: O—Mandatory information; V—Voluntary information; R—Voluntary but recommended information. Source: Silva (2019); Medeiros et al. (2025).

.

To calculate the index, the value assigned was: (1) when the indicator information is identified in the annual report of each pension fund, and (0) when the information is not recognized, resulting in a percentage proportion calculated as follows:

$${ND}_i={\displaystyle \frac{{\sum }_{i=1}^n{X}_{ij}}{n_i}}$$

(2)

where

• xij = total of indicators identified i for each pension fund j;
• ni = is the total number of disclosure indicators xi for each pension fund j.

We use the calculation as empirical literature on disclosure. The variables of interest and control are in

Table 2. Variables of interest and control of the econometric model.

Variables	Classification	Description
GESTORMESTRDOUT	Interest	Members of statutory bodies (deliberative or fiscal council and executive board) of each pension fund, with master’s or doctorate degrees, divided by the total members of the bodies of the respective pension funds (Bamber et al., 2010; Tang et al., 2011; Halman, 2013; Rossignoli et al., 2021). Formal education, understood as managers who have a master’s or doctorate (stricto sensu), because managers already have a higher education degree.
LOGINVESTINDIV	Control	This variable represents the size of pension funds. It is calculated by the relationship between the natural logarithm of the total invested by pension funds and the natural logarithm of the total beneficiaries (participants and beneficiaries) of these funds (Scott, 1991; Bianchi et al., 2010; Klumpes, 2000, 2011; Bauman & Shaw, 2014; Chang et al., 2014; J. J. Chen et al., 2017).
ASSISTPART	Control	Variable is composed of the division between the total number of beneficiaries (retired beneficiaries) and the total number of participants (active beneficiaries) of each pension fund (Mitchell & Hsin, 1994; Klumpes, 2011).
ROA	Control	This variable measures the performance of pension funds through the return on assets (Scott, 1991; Rose, 2015; J. J. Chen et al., 2017).
AUDIT	Control	It is characterized by a dummy that identifies whether the independent audit of the pension fund is carried out by one of the Big Four. If it is the Big Four, the dummy used was number one. Otherwise, the number zero was used (Bauman & Shaw, 2014; Chang et al., 2014).
TEMPO	Control	Represents the age of each pension fund in years (S. Chen et al., 2002; Macagnan, 2007).
PATROCPUBL	Control	Dummy identifies whether the sponsorship of the pension fund is public or private. If public sponsorship was employed, number one was employed. In the case of private sponsorship, the number zero was used (Queisser, 1998; Ribeiro Filho et al., 2008; Klumpes, 2011; J. J. Chen et al., 2017; Teixeira et al., 2020).

Note: All data were extracted from the “Open Data” tab on the regulatory body’s website for supplementary pensions in Brazil, the National Superintendence of Supplemental Pensions. They can be accessed via the following link: https://www.gov.br/previc/pt-br/acesso-a-informacao-1/dados-abertos, accessed on 22 April 2018. Specifically, regarding the economic and financial information, data from the Accounting Balance Sheets made available by the same body were used, as per the link: https://www.gov.br/previc/pt-br/acesso-a-informacao-1/dados-abertos/copy_of_balancetes-contabeis/consolidado/2015, accessed on 22 April 2018. Source: prepared by the authors.

.

The data on the ND_i and AUDIT variables were manually collected in the annual reports of the pension funds, which make up the sample of this study. Such yearly reports were located on the websites of said pension funds. Specifically concerning the control variables, those used in the study were chosen because they are the most analyzed in similar studies, according to the cited literature.

The website of the National Superintendence of Complementary Pensions (PREVIC) contains public data about the registration (foundation date, type of sponsorship, number of beneficiaries, number of plans, number of sponsors, etc.), beginning and end of term, etc., and pension fund accounting. Therefore, these data supported the variables GESTORMESTRDOUT, LOGINVESTINDIV, ASSISTPART, ROA, TEMPO, and PATROCPUBL. It should be noted that all data from this study are based on 31 December 2015.

Finally, logistic regression (LOGIT) was used to verify the robustness of the results presented in the multiple linear regression. To this end, the sample was arranged in ascending order according to the level of disclosure. Subsequently, the sample was divided into three parts, and the first and last parts were used in the regression, disregarding funds with an intermediate level of disclosure. The first third was assigned a score of zero for the NDi variable, considering the low level of the disclosure presented. A grade of one was assigned to the last third, considering the high level of disclosure. The results are displayed in Section 4.3 of this study.

3.2. Population, Sample, and Data

The PREVIC website indicated the existence of 317 pension funds in Brazil as of 14 October 2016. To collect the data, an individual and detailed analysis was carried out of the Annual Information Reports (RAI) published by Brazilian pension funds in 2016, referring to the base date of 2015.

However, some exclusions were necessary to define the sample, as shown in

Table 3. Final composition of the study sample.

Description	Quantity
Total population of Brazilian pension funds	317
Pension funds that provide information only using beneficiary passwords	(20)
Pension funds that do not publish the annual report on a consolidated basis	(3)
Pension funds written off, in liquidation, or with management and assets merged with other pension funds	(23)
Pension funds without a webpage	(42)
Pension funds whose last published annual report was before 2015	(7)
Pension funds whose annual reports were not available on the website	(6)
Pension funds that did not present data for all variables	(4)
Outliers	(3)
Final Sample	209

Note: Outliers were excluded because they were very small or very large funds, which could distort the data. Source: prepared by the authors.

. Regarding outliers, three funds were excluded because they were outliers (very large or extremely small funds), with the capacity to distort the data.

Based on Table 3, the sample of 209 pension funds was used for linear regression analysis. The sample is considered satisfactory, representing 71% of active Brazilian pension funds. In the following section, the results of this study are described.

4. Results and Discussion

4.1. Univariate Analysis

The descriptive analysis of the variables that make up the econometric model of this thesis is presented in

Table 4. Descriptive analysis of variables.

Variables	Minimum	Maximum	Average	Standard Deviation
ND	0.0625	0.6667	0.4559	0.0921
GESTORMESTRDOUT	0.0000	0.5833	0.0410	0.0807
LOGINVESTINDIV	4.86	14.42	11.14	1.38
ASSISTPART	0.0000	16.6769	0.8703	2.1591
ROA	−1.1071	0.9346	0.0976	0.1420
TEMPO	2.0329	57.7000	26.1627	11.4170

Source: prepared by the authors.

, which contains only the continuous variables. The dummy variables, as they have binary results, are not shown.

As observed in Table 4, the variable level of disclosure (ND) shows that pension funds disclose, on average, 45.6% of the indicators that make up the index. The pension fund with the lowest level of disclosure reveals three of the 48 indicators, which corresponds to 6.3%. The pension fund with the highest level of disclosure publishes 32 indicators, equivalent to 66.7%. This evidence allows us to infer, firstly, that there is no normative standardization for the disclosure of reports. The information to be disclosed depends on the decision of the managers. Second, none of the pension funds reached the entirety of the index. None disclosed all the indicators analyzed, even among the mandatory ones. Thus, once the studied indicators are accepted, it would be up to pension funds to review their disclosure policies to meet the demands of their public interest. Likewise, it indicates to the regulatory bodies the need to improve the standardization of annual information reports, especially about the information disclosed in this document.

Regarding the independent variable GESTORMESTRDOUT, which corresponds to deliberate councilors, fiscal councilors, and executive directors who have a master’s and/or doctorate, Table 4 indicates that, on average, the funds have 4.1% of their governing body with a master’s degree and/or doctorate. Some funds do not have members with this background on their governing body. For example, only one of the funds in the sample has 58.3% of its governing body with a master’s or Ph.D. The data indicates that the formal qualification of the governing body, in general, is restricted to higher education (minimum requirement for the exercise of the position). The average managers with a master’s and/or doctorate in pension funds is meager, indicating that these professionals do not have enough knowledge to deal with the complexity of the demands of their activities, including the management of investment resources. Third parties, the long-term nature of these organizations, and the diversification of investment options. These facts may denote a need to improve governance practices, especially regarding managers’ hiring, education, and training.

The variable LOGINVESTINDIV reveals that the average value of the participant’s investment is BRL 67,000.00 (log 11.13). The minimum amount corresponds to an average investment of BRL 128 (log 4.86). The maximum value corresponds to BRL 1,836,594 (log 14.42). These amounts are equal to the amount invested by the participant since joining the plan. Therefore, the risks for sponsors, beneficiaries, and participants of the fund with an average value of BRL 1,836,594 are more significant than those with an average investment value of BRL 128. This result may indicate that the demand for information from the first is greater than the second and may require different regulations for both cases. Although PREVIC has different classifications for monitoring the activities of pension funds according to assets, there are no substantial differences in Brazilian legislation regarding the difference in “size” and, therefore, in the associated risk.

The analysis of Table 4 also shows that pension funds have an average of 8.5 retirees for every ten active participants, according to the ASSISTPART variable. This variable represents the total number of people receiving the benefit (assisted) over the total number of participants (active). Several funds still do not have retirees (equivalent to 0%). On the other hand, there is a pension fund with a rate of 1667.7% assisted per participant, 1084 assisted for a total of 65 active participants. It reveals that such funds have reached maturity. Maturity means the disbursement phase, the highest proportion of the number of beneficiaries among active participants. As a result, the fund can pay more benefits than it collects. This situation should not bring greater risk because these are cases foreseen in the actuarial calculations, and, therefore, the investments made until then must cover the payments of the benefits (Rabelo & Machry, 2000; Sartor, 2001). On the other hand, it may indicate that the demand for disclosure for these funds is lower, considering that those assisted are already thoroughly enjoying their benefits (Klumpes, 2011).

The return on assets (ROA) variable shows a significant variation in the results of pension funds. On average, pension funds had a 9.6% return on assets. The lowest value is equivalent to a negative impact, 10.7% greater than the asset. The higher value corresponds to a 93.4% return on the asset. This variation may be due to the significant deficits of some pension funds in 2015, targets of Operation Greenfield. Negative results may indicate that those funds need to disclose more information due to the need for more excellent explanations to stakeholders (Scott, 1991; Graham et al., 2005; Sievänen et al., 2013). On the other hand, managers tend to disclose more favorable information. (Dye, 2001).

In the case of the TEMPO variable, Table 4 shows that, on average, the funds have been in existence for 26 years. The youngest fund is two years old, and the oldest is 57.7 years old.

Table 5. Correlation matrix.

Variables	Description	GESTORMESTRDOUT	LOGINVESTINDIV	ASSISTPART	ROA	AUDIT	TEMPO	PATROCPUBL
GESTORMESTRDOUT	Pearson’s Correlation	1	0.108	−0.104	−0.045	0.017	0.037	0.100
	Sig. (2 ends)		0.119	0.136	0.521	0.807	0.593	0.149
	N	209	209	209	209	209	209	209
LOGINVESTINDIV	Pearson’s Correlation	0.108	1	0.251 **	0.002	0.193 **	0.498 **	0.179 **
	Sig. (2 ends)	0.119		0.000	0.982	0.005	0.000	0.010
	N	209	209	209	209	209	209	209
ASSISTPART	Pearson’s Correlation	−0.104	0.251 **	1	−0.120	−0.014	0.237 **	0.036
	Sig. (2 ends)	0.136	0.000		0.084	0.839	0.001	0.605
	N	209	209	209	209	209	209	209
ROA	Pearson’s Correlation	−0.045	0.002	−0.120	1	0.009	−0.311 **	−0.006
	Sig. (2 ends)	0.521	0.982	0.084		0.896	0.000	0.936
	N	209	209	209	209	209	209	209
AUDIT	Pearson’s Correlation	0.017	0.193 **	−0.014	0.009	1	0.132	0.427 **
	Sig. (2 ends)	0.807	0.005	0.839	0.896		0.056	0.000
	N	209	209	209	209	209	209	209
TEMPO	Pearson’s Correlation	0.037	0.498 **	0.237 **	−0.311 **	0.132	1	0.232 **
	Sig. (2 ends)	0.593	0.000	0.001	0.000	0.056		0.001
	N	209	209	209	209	209	209	209
PATROCPUBL	Pearson’s Correlation	0.100	0.179 **	0.036	−0.006	0.427 **	0.232 **	1
	Sig. (2 ends)	0.149	0.010	0.605	0.936	0.000	0.001
	N	209	209	209	209	209	209	209

** The correlation is significant at the 0.01 level (2 ends). Source: prepared by the authors.

presents the correlation matrix between the dependent variable, the variable of interest, and the control variables.

The analysis of Table 5 does not show a significant correlation (above 0.600) between the variables of interest and control. Thus, it was not necessary to exclude variables from the econometric model.

4.2. Linear Regression

We applied the Kolmogorov–Smirnov and Shapiro–Wilk tests to assess the normality of the residuals of the disclosure variable (ND), presented in

Table 6. Residual normality test for the level of disclosure variable (ND).

Description	Kolmogorov–Smirnov ª			Shapiro–Wilk
	Statistic	gl	Sig.	Statistic	gl	Sig.
Non-standardized waste	0.041	209	0.200 *	0.991	209	0.247
Standardized waste	0.041	209	0.200 *	0.991	209	0.247

* Lower limit of true significance. ª Lilliefors correlation of significance. Source: prepared by the authors.

.

The tests, Kolmogorov–Smirnov and Shapiro–Wilk, present significance greater than 0.05, indicating normal distribution. In addition, we obtained residual normality after excluding outliers from the Gerdau, Quanta, and Visão funds. Figure 1 shows the normal distribution of residuals.

Figure 2 illustrates the residual normality line.

Subsequently, we examined the possibility of heteroscedasticity in the model with the Breusch–Pagan–Godfrey and White tests, as shown in

Table 7. Breusch–Pagan–Godfrey test for heteroscedasticity.

Heteroscedasticity Test: Breusch–Pagan–Godfrey
F-stat	1.871919	Prob. F (7.201)	0.0758
Obs R-square	12.79110	Prob. Chi-square (7)	0.0774
Scaled explained SS	14.04479	Prob. Chi-square (7)	0.0504

Source: Prepared by the authors.

and

Table 8. White test for heteroscedasticity.

Heteroscedasticity Test: White
F-stat	1.265009	Prob. F (33.175)	0.1691
Obs R-square	40.25354	Prob. Chi-square (33)	0.1800
Scaled explained SS	44.19892	Prob. Chi-square (33)	0.0921

Source: Prepared by the authors.

.

The Breusch–Pagan–Godfrey and White heteroscedasticity tests indicate no significance in the p-values. Therefore, the assumption that the data is homoscedastic is accepted.

Furthermore, the possibility of collinearity problems between the variables that make up the model was verified using the variance inflation factor (VIF) test.

Table 9. Variance inflation factor test.

Variance Inflation Factors (VIF)
Date: 18 December 2018 Hour: 15:56
Sample: 1–209
Notes Included: 209
Variables	Variance Coefficient	VIF Not Centralized	Centralized VIF
C	0.002455	73.48173	NA
GESTORMESTRDOUT	0.005381	1.316444	1.045133
LOGINVESTINDIV	2.65 × 10−5	99.85345	1.512846
ASSISTPART	8.10 × 10−6	1.309328	1.125566
AUDIT	0.000188	2.555760	1.394051
ROA	0.001948	1.726208	1.170224
TEMPO	4.22 × 10−7	10.29728	1.640626
PATROCPUBL	0.000211	2.202651	1.433304

Source: prepared by the authors.

demonstrates the result of the said test.

Table 9 presents the variance inflation factor test below 10 for all variables, indicating that they do not present multicollinearity problems with each other. Thus, the preliminary analyses of the multiple linear regression analysis are concluded, with their assumptions confirmed and attesting to the validity and reliability of the multiple linear regression estimated by the Ordinary Least Squares (OLS). Therefore, the multiple linear regression results are in

Table 10. Results of the multiple linear regression equation.

Dependent Variable: ND
Method: Ordinary Least Squares
Date: 18 December 2018 Hour: 15:51
Sample: 1–209
Notes Included: 209
Variable	Coefficient	Standard Error	t-Statistic	Prob.
C	0.355058	0.049544	7.166463	0.0000
GESTORMESTRDOUT	0.154061	0.073355	2.100204	0.0370
LOGINVESTINDIV	0.005524	0.005147	1.073262	0.2844
ASSISTPART	−0.013041	0.002847	−4.580744	0.0000
AUDIT	0.038829	0.013705	2.833231	0.0051
ROA	0.112555	0.044132	2.550414	0.0115
TEMPO	0.000431	0.000650	0.663437	0.5078
PATROCPUBL	0.012803	0.014514	0.882141	0.3788
R-Square	0.205449	Average Var. Dependent		0.455941
Adjusted R-Square	0.177778	Standard error Var Dependent		0.092148
Standard Regression Error	0.083556	Akaike Criterion		−2.089070
Sum of the Squares of Residues	1.403307	Schwarz Criterion		−1.961134
Log-likelihood	226.3078	Hannan–Quinn Criterion		−2.037345
F-Stat	7.424742	Durbin–Watson		2.045213
Prob (F-Stat)	0.000000

Source: prepared by the authors.

.

The results presented in Table 10 show that the model has an R² of 20.5%. The adjusted R² is 17.8%, indicating the level of explanation of the model. The percentage of proof of the model is significant, considering the sample and the model variables. The F test has a result of 7.4247. The index greater than 5000 indicates that at least one variable in the model helps to explain the level of disclosure of pension funds. The significance of 0.000 suggests that the model is highly significant, as shown in Table 10.

The econometric model results indicate that the explanatory variable GESTORMESTRDOUT has a positive relationship with the level of disclosure of pension funds. Table 10 shows statistical significance in this variable. Its coefficient shows that the pension fund’s disclosure level increases for each percentage increase in the number of members of the fund’s governing body (deliberative and fiscal counselor and executive board) with a master’s and/or doctorate by 0.15 percentage points. This result does not allow refuting the previously established hypothesis. Furthermore, it is in line with the study by Marchetti et al. (2018), who mention that highly qualified advisors are related to a higher level of disclosure, and one of the explanations is related to their reputation.

The study by Stewart and Yermo (2008) highlights that the most severe failures in the governance of pension funds would improve with higher levels of specialization of fund managers. In this sense, Aslan (2023) mentions that hiring unqualified managers is one of the main flaws in the governance structure of funds, relating this fact to the absence of a regulatory framework that defines best practices for hiring. This could be achieved, among other measures, through the training and qualification of managers. Unfortunately for the authors, the governing body often does not have adequate knowledge, experience, or activity, which prevents them from understanding and even facing suggestions and guidance they receive from external experts, such as actuaries and auditors.

Personal characteristics, such as education, play a significant role in these organizations’ management and disclosure decisions (Bamber et al., 2010; Faleye et al., 2018). Bamber et al. (2010) comments that research should be more attentive to the effects of these characteristics, which can be more elucidative than variables already tested before, such as the manager’s personality. The improvement in the skill and knowledge of managers can positively contribute to disclosure (Krishnan et al., 2011; Dass et al., 2014).

The level of knowledge, responsibility, and training of pension fund managers is necessary if the characteristics of the “product” they operate are considered: third-party resources and long-term perspectives. (Reish & Faucher, 2004; Clark, 2007; Stewart & Yermo, 2008; Rozanov, 2015; Hewitt & La Grange, 2017; Almaghrabi et al., 2021). And, in many cases, managers are not adequately qualified to do so. (Faleye et al., 2018). The study by Andonov et al. (2018) pointed out that the lack of financial knowledge resulted in the poor performance of the funds studied, for example. On the other hand, better levels of training improve the stories of judgment of managers in the decision-making process (Graham et al., 2005; Hess, 2005; Demerjian et al., 2013).

In a study carried out with pension funds in South Africa, the authors identified four limitations related to the governing body that impact the excellent governance of these organizations: lack of knowledge, lack of experience, lack of independence, and lack of capacity (Hewitt & La Grange, 2017). Such limitations affect fund disclosure decisions and increase information asymmetry. On the other hand, the study by Francis et al. (2015) pointed out that the presence in the management of people with academic knowledge attributes significant improvements in governance and the results of organizations, which can contribute to increasing levels of disclosure.

It is illustrated, for example, that the best level of qualification of managers would probably lead to better ranks in the dissemination of indicators such as “Investment Policies,” “Investment Statement,” and “Demonstration of the Administrative Management Plan (DPGA).” Such indicators demand a high degree of technical knowledge about the activity and summarize the result of the actions of these managers in a way that would make apparent the possible lack of skill and expertise in conducting the business. Furthermore, these indicators are directly related to the legal requirements of the positions they hold.

Note that art. 13 of Complementary Law no. 108 of 2001, among others, mentions that it is incumbent upon the deliberative council to define the entity’s general management policy and its benefit plans (item I) and to manage investments and the investment plan (item III). These attributions are evidenced through the “Investment Policy” indicator, which involves the disclosure of the planning for the allocation of assets, generally for five years, and the “Investment Statement” indicator, which deals with the details of the investments made by the fund, by type of investment, profitability, and its evolution over time. Also, the Statement of Administrative Management Plan (DPGA) explains the administrative activity of the pension fund, its income and expenses, and, consequently, the acts of management.

Although it is mandatory and essential for interested parties to monitor the results of the funds and the legal fulfillment of the functions of the managers, these indicators are not always disclosed by the organizations. So, it can demonstrate the lack of knowledge, inability, or insecurity of the managers. In this sense, those directly responsible for asset management, such as the board, those who deliberate on the main directions of these organizations, and their supervisors (deliberative and fiscal councils), have specific knowledge to correctly understand their activities, as well as the attributions of those who report to them (Mitchell & Hsin, 1994; Stewart & Yermo, 2008; Dass et al., 2014; OECD, 2016). Highly qualified directors and boards can significantly influence strategic decision-making and become a positive governance signal to the market (Pombo & De La Hoz, 2021; Cho et al., 2025).

The results indicate that managers’ higher level of training also increases the disclosure of pension funds and, consequently, reduces information asymmetry. However, without an adequate understanding of the qualities such as knowledge and training necessary for the performance of management functions on the part of the entire system involving pension funds, including regulatory bodies, unqualified persons without a complete understanding of the extent of their responsibilities will continue to hold these positions (Hewitt & La Grange, 2017). And it is along these lines that regulatory bodies around the world have acted, as in the case of The Pension Regulator (TPR) in the United Kingdom, the Department of Labor (DOL) in the United States, and The Pension Board (TPB) in Ireland (DOL, 2004; TPB, 2006; TPR, 2007).

For the International Organization of Pension Supervisors (IOPS), several countries use the certification process so that the regulatory body can guarantee the necessary competence of the governing body of pension funds. In the application for qualification, usually, the director must present a series of documents to the competent authorities, including the academic and professional qualifications (IOPS, 2008).

In Brazil, there is also the process of certification of members of the executive board and deliberative and fiscal councilors by PREVIC, as provided in CNPC Resolution n. 19, of 30 March 2015, and PREVIC Instruction n. 28, of 12 May 2015. However, in the understanding of the international organization, post-licensing monitoring is as crucial as pre-licensing assessment. In this regard, supervisors can proactively conduct on-site inspections to verify that members continue to meet “appropriate and adequate” criteria.

For example, in the UK and Australia, efforts were made to educate managers to improve their skills and knowledge on an ongoing basis. There is even a method of training administrators in the UK—an e-learning program covering the full scope of topics that can fill gaps in your knowledge. The program provides the learning content and the toolkit. As the regulator wrote the material, it is evident that using these tools and trainers will cover the learning points that the regulator believes administrators should know and understand. In addition, the regulator carried out a pre-training program with instructors to use the toolkit (TPR, 2007; IOPS, 2008).

Also, the courses offered by the Irish Institute of Pension Managers offer participants the opportunity to receive a formal qualification as part of their training regime. The Irish regulatory body assesses the updating of courses, the content of the training, and the quality of the instructors (TPB, 2006). In addition, in the cases of Portugal and Spain, members of the board of directors must meet basic requirements in terms of professional qualifications and experience to exercise their positions (Stewart & Yermo, 2008).

It so happens that, in the Brazilian case, there is no specific continuing education for the governing body, only the renewal of the license according to §3 of art. 9 of PREVIC Instruction no. 06, of 29 May 2017: “The qualified officers who remain or are reappointed to the same position will have the validity of the certificate of qualification automatically extended for thirty days, during which period they must request renewal of the qualification.” And in this case, the search for formal qualifications is the responsibility of each manager (PREVIC, 2017).

In addition to the variable of interest, the control variables ASSISTPART, AUDIT, and ROA also showed statistical significance. The ASSITPARTIC control variable is statistically significant. However, it is negatively related to the ND variable. The results indicate that the greater the number of pension fund beneficiaries (retirees) compared to active participants, the lower the fund’s disclosure level. For example, for every one percentage point increase in the number of people assisted over participants, there is a 0.013% reduction in the fund’s disclosure level. This means that those administered are already enjoying their benefits. Therefore, there is no more significant concern with disclosure or monitoring the actions of managers or greater demands regarding goals, for example (Klumpes, 2011).

Statistical significance was also in the AUDIT control variable, represented by the Big Four auditing companies’ funds. There is a positive relationship between the Big Four audits and the level of disclosure of pension funds. The results show that the pension fund audited by one of the Big Four auditing companies increases its disclosure level by 0.038%.

The complexity and characteristics of social security accounting make it more susceptible to the disclosure of preliminary reports and require the involvement of specialists capable of evaluating the operations of the funds (Anantharaman, 2017). In this sense, the audit is a method for monitoring the actions of managers by owners (Jensen & Meckling, 1976; Watts & Zimmerman, 1983). Watching these actions is essential, if not crucial, for the formation and maintenance of organizations. In addition, external auditors may be the professionals with the highest level of technical knowledge, time, and resources needed to analyze the decisions made by management (Clark, 2004).

The studies by Bauman and Shaw (2014) and Chang et al. (2014) pointed out the audit as a determinant for disclosing pension funds. For Bauman and Shaw (2014), the fact that the organization is audited by one of the Big Four is positively related to the fund’s disclosure decisions. Therefore, it is possible for a global auditing firm, especially the Big Four, to impose higher standards of control, governance, and compliance on the pension fund, leading to greater disclosure.

The control variable ROA has statistical significance at the level of 5% and is positively related to the dependent variable ND. For each point of increase in ROA, there is an increase of 0.11% in the pension fund’s disclosure level. In Dye’s (2001) view, the fact that the organization does not adequately disclose its performance can imply that its results are not good; “bad news” is being omitted.

The literature on disclosure by companies participating in the market indicates that, in general, when there is a negative result, they need to disclose more information to explain this result to interested parties and maintain transparent management (Skinner, 1994; Graham et al., 2005; Hebb, 2006). In addition, disclosure of poor performance reduces the risk of litigation (Healy & Palepu, 2001).

The results of this study contradict this logic, demonstrating that the higher the return on assets, the greater the level of disclosure of pension funds. One of the reasons is that disclosing information on performance, including liquidity and profitability indicators, contributes to reducing information asymmetry between managers and other stakeholders (Camfferman & Cooke, 2002). In the case of pension funds, it minimizes the asymmetry between managers and participants, generating a relationship of trust between them and the fund, and creating a scenario for more employees to participate in pension funds. Furthermore, in the view of M. Tan and Cam (2011), the disclosure of positive results increases disclosure because such a result increases the size of the fund. And more significant funds have more structure and can minimize information production costs, thus generating more disclosure.

The control variables LOGINVESTINDIV (average individual investment), representative of size and TEMPO of the fund, and PATROCPUBL (funds with public sponsorship) did not show statistical significance.

4.3. Logistic Regression

The results of the logistic regression are presented in Table 10 and

Table 11. LOGIT model summary.

Stage	log-Likelihood −2	R-Squared Cox & Snell	R-Squared Nagelkerke
1	180.659	0.108	0.144

Source: prepared by the authors.

, as shown below.

Table 11 shows that the R² calculated by the Cox & Snell method presents a result of 10.8%. This means that the model tested can explain 10.8% of the variations recorded in the dependent variable, level of disclosure (ND). On the other hand, in the Nagelkerke method, the explanatory power of the variations recorded in the ND variable is 14.4%.

Table 12. Table of the classification ª.

Stage	Observed		Foreseen
			ND		Correct Percentage
			0	1
1	ND	0	47	24	66.2
		1	26	45	63.4
	Overall Percentage				64.8

ª The clipping value is 0.500. Source: prepared by the authors.

presents a satisfactory classification result (64.8%) regarding using independent variables as estimators of the disclosure level. In other words, it shows the predictive power of the results.

Table 13. Omnibus model coefficient tests.

		Chi-Square	df	Sig.
Stage 1	Stage	16.194	7	0.023
	Block	16.194	7	0.023
	Model	16.194	7	0.023

Source: prepared by the authors.

demonstrates the likelihood ratio (LR) test to assess the effect of factors on the level of disclosure variable. Statistical significance shows the relevant impact of the elements for predicting the results.

Table 14. Variables of the equation.

		B	Standard Error	Wald	df	Sig.
Stage 1	GESTORMESTRDOUT	4.906	2.810	3.048	1	0.081
	LOGINVESTINDIV	0.144	0.152	0.894	1	0.344
	ASSISTPART	−0.103	0.090	1.300	1	0.254
	ROA	1.138	1.466	0.602	1	0.438
	AUDIT	0.893	0.423	4.461	1	0.035
	TEMPO	0.001	0.019	0.001	1	0.972
	PATROCPUBL	0.104	0.446	0.054	1	0.816
	Constante	−2.263	1.510	2.245	1	0.134

Note: variable (s) entered in step 1: GESTORMESTRDOUT, LOGINVESTINDIV, ASSISTPART, ROA, AUDIT, TEMPO, PATROCPUBL. Source: prepared by the authors.

reveals the importance of the variables included in the equation.

The variables GESTORMESTRDOUT stand out, with statistical significance at the level of 10% and a higher beta (4.91), and the variable AUDIT, with high relevance and a beta of 0.89. The other variables did not show statistical significance. In this sense, we can say that the variables GESTORMESTRDOUT and AUDIT contribute significantly to the prediction of the disclosure level. Furthermore, such responses confirm the results of the multiple linear regression. In the next section, we present the conclusion of this study.

Considering that conventional incentives for disclosure are weak (Spence, 1973) and different when compared to traditional approaches for companies, this study raises the possibility that pension fund managers recognize that information is power. In Foucault’s view, power is understood here as a network of forces present in all relationships and in the place it occupies in society (Foucault, 1995; Dass et al., 2014; Feder, 2018; Lynch, 2018; Rietz, 2018; Taylor, 2018). Power would always be in relationships and the place it occupies in the organization, which would enable decisions about disclosing or withholding information.

These results corroborate what is pointed out by (Clark, 2004; Stewart & Yermo, 2008), in the sense that high levels of formal education are essential for pension fund managers, which points to the fact that incentives for the disclosure of these institutions are influenced by the educational level of managers and not by the reasons addressed in the literature, in the case of publicly traded companies.

These findings may be useful for both pension funds around the world and regulators to strengthen requirements and enforcement on manager qualifications. Although we have analyzed the context and regulation in Brazil, the organizational and regulatory structures of pension funds in many countries are not significantly different.

The disclosure and transparency of pension funds still need to be studied, just as their governance structures need to be strengthened, including greater enforcement by regulatory bodies. In this study, we do not claim that the level of qualification of managers is the only or the main explanation for the difference in disclosure between funds, but it is one of these factors. On the other hand, the approach to disclosure in companies in the market cannot explain the phenomenon of these funds.

5. Conclusions

This study aimed to analyze the relationship between the level of formal qualification of managers and the level of disclosure of Brazilian pension funds. However, the results do not reject the established hypothesis. Our study reveals a significant contribution: managers with higher formal qualifications, particularly master’s and doctoral degrees, positively impact pension fund disclosure and help reduce information asymmetry. This contrasts with traditional literature (Arrow, 1963; Akerlof, 1970; Verrecchia, 1983, 1990; Wagenhofer, 1990; Stiglitz, 2000; Dye, 2001), which predominantly focuses on adverse selection, moral hazard, and their implications for disclosure. Furthermore, this study showed that other factors could impact the manager’s discretion and decision on what should be disclosed; the training of managers is one of them. Therefore, it is evident that issues related to improper management of resources and low levels of disclosure are not restricted to moral hazard and adverse selection problems but may also be linked to the stories of formal qualification of the fund’s governing body.

It is worth noting that regulatory bodies must pay attention to the qualification needs of pension funds, as there is little public information on the profile of Brazilian pension fund managers. Therefore, regulatory bodies could improve the transparency of managers’ profiles and their selection and performance evaluation structure and provide adequate direct training, leading them, consequently, to better decisions and a higher level of disclosure. Also, establish regulations on the need for professionals’ qualifications to improve training on the disclosure of pension funds. This fact may be of direct interest to the participant, and the research shows, for example, that most funds do not disclose information about the “mini curriculum” of their directors. This fact may be of direct interest to the participant, and the research shows, for example, that most funds do not disclose information about the “mini curriculum” of the directors, as well as information regarding the hiring, election, and appointment of members of the executive board and councils. This information would help to reduce information asymmetry as the level of training of the governing body would be disclosed.

Stewart and Yermo (2008) mention good practices that could be improved in pension funds. Some of these apply to the Brazilian reality and would significantly enhance the level of disclosure and, consequently, reduce information asymmetry. The following can be mentioned: better guidance on the elective processes of the level and types of knowledge needed by the members of the executive board and councils; encouraging the training of managers on a regular and continuous basis, especially training in stricto sensu (master’s and/or doctorate); providing free training, including online and financial support for formal training of managers. In addition, it is suggested that these measures need to be disclosed in the funds’ annual reports.

Therefore, it is suggested that the regulatory bodies expand the rules on disclosure of information to include those demanded by stakeholders and good governance practices. Furthermore, none of the organizations studied disclose all these indicators in their annual reports. Therefore, it is also suggested that pension funds adopt the disclosure of these indicators, even if voluntarily. Such actions would reduce information asymmetry and, consequently, would also reduce moral hazard.

Moreover, our results reveal that the AUDIT control variables, including funds audited by Big Four companies and return on assets (ROA), were statistically significant (p < 0.05). The positive coefficients demonstrate that both a fund’s positive performance and its audit by a global firm positively impact its disclosure level.

On the other hand, the ASSISTPART control variable, representing the number of people assisted with the number of active participants, has statistical significance at the 5% level but a negative coefficient. It means that the greater the number of people assisted (people who are receiving the benefit) from active participants, the lower the level of disclosure. This fact is explained by the demand for information on those assisted being lower because they are already enjoying their benefits. Differently, it occurs in the universe of active participants: there is an expectation of receipt and, at the same time, disbursement in progress, which generates greater attention and interest on the part of the participant.

Although considering that data collection is manual and individualized, the following limitations stand out: the use of indicators that may be subjective; the non-availability of annual reports for all pension funds; the collection and analysis of evidence restricted to the year 2015; and the fact that only the formal training of managers was considered as a variable of interest.

Furthermore, another relevant limitation refers to the possibility of reverse causality. While the empirical results align with the theoretical proposition that more qualified managers contribute to higher levels of disclosure, it is plausible that pension funds exhibiting greater transparency may, in turn, be more likely to attract professionals with stronger technical and managerial qualifications. Although the model controls for institutional characteristics, such as the type of sponsor, such controls do not fully eliminate concerns related to endogeneity. Future research may benefit from employing causal inference strategies, such as instrumental variable approaches, matching techniques, or difference-in-differences designs.

In addition to addressing methodological concerns, future studies could also refine the measurement of managerial qualifications by incorporating informal dimensions of expertise, as well as by disaggregating formal training by field of knowledge—particularly in areas such as accounting, management, actuarial science, and finance. It is also recommended to examine other attributes of the governing body that may influence disclosure, including age, gender, compensation, and tenure. We also suggest studies that cover the manager’s years of experience and area of training. Finally, it is suggested to consider an approach that considers the diversity of boards.