PIS and PASEP are programs that promote the integration of workers in the development of companies or public bodies. They are social contributions paid by private and public companies with the purpose of defraying benefits for the worker and, thus, better distributing the national income.
PIS is the acronym of social integration program. It is aimed at workers in the private sector. The administration of this program is Caixa Econômica Federal.
Read more about the Definition of PIS.
Already PASEP is the acronym for Civil Servant Heritage Formation Program. This program is aimed at workers in the public sector and is administered by Banco do Brasil.
The money paid by companies is destined for a single fund: the Worker's Support Fund (FAT). Features come from FAT to pay benefits such as salary bonus it's the unemployment insurance. These resources also serve to finance economic development programs of the National Bank for Economic and Social Development (BNDES).
Both programs were created separately in 1970, but were merged in 1975. With the unification, the so-called PIS/PASEP Fund was created. Between 1971 and 1988, employers (private companies and public agencies) made deposits on behalf of workers, who owned a share of this fund. As of 1988, the quota regime was abolished. Since then, the resources are destined to FAT.
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