1

Before 1977Before 1977

Some open Entities by widow’s fundsSome open Entities by widow’s funds

Small market shareSmall market share

Accounting pension funds, provided by Accounting pension funds, provided by

businessmenbusinessmen

Private Pension FundsPrivate Pension Funds

2

From 1977From 1977

6.435 Law of July/776.435 Law of July/77

Private Pensions (open and closed entities)Private Pensions (open and closed entities)

Closed Private Pensions Closed Private Pensions non-profitable non-profitable

entitiesentities

Open Private Pensions Open Private Pensions profitable entities profitable entities

Private Pension FundsPrivate Pension Funds

3

Principles Established byPrinciples Established byConstitutional Amendment Constitutional Amendment

#20#20

Principles Established byPrinciples Established byConstitutional Amendment Constitutional Amendment

#20#20

4

Should observe criteria which preserve Should observe criteria which preserve the the financial and actuarial equilibriumfinancial and actuarial equilibrium

Applicable to servers from Union, States, Applicable to servers from Union, States, Federal Federal District and CitiesDistrict and Cities

Only to servers of effective positionOnly to servers of effective position

Based on service time contributionBased on service time contribution

Public Pension ServerPublic Pension Server

5

Obliging filiationObliging filiation

Should observe criteria which preserve the Should observe criteria which preserve the financial and actuarial equilibriumfinancial and actuarial equilibrium

Reciprocal count - Law will regulate the Reciprocal count - Law will regulate the financial financial compensation between the regimencompensation between the regimen

Work accident risk will be attended, Work accident risk will be attended, intersecting, by intersecting, by RGP and Private SectorRGP and Private Sector

It will attend the position server in It will attend the position server in commissioncommission

Social SecuritySocial Security

6

Three projects of Complementary Law will Three projects of Complementary Law will regulate the regimen of Pension Funds in regulate the regimen of Pension Funds in complementary charactercomplementary character1º1º Complementary Social Security Regimen, envolving Complementary Social Security Regimen, envolving the open the open and closed Entitiesand closed Entities(PLP 10)(PLP 10)

2º2º Relation between the Union, States, Federal District Relation between the Union, States, Federal District and and Cities and their respective closed Entities of Cities and their respective closed Entities of Complementary Complementary Social SecuritiesSocial Securities(PLP 8)(PLP 8)

3º3º Rules for institution at Complementary Social Rules for institution at Complementary Social Security Security regimen by Union , States, Federal regimen by Union , States, Federal District and Cities District and Cities (PLP 9)(PLP 9)

Complementary Social SecurityComplementary Social Security

7

Established the position of Institutional Investor, Established the position of Institutional Investor, allowing the creation of Complementary Funds by allowing the creation of Complementary Funds by Sindicates and AssociationsSindicates and Associations

Forecast the Portability, whose regulation will be Forecast the Portability, whose regulation will be object of ordinary lawobject of ordinary law

Created the defined benefitCreated the defined benefit

Introduced in the legislation the defined Introduced in the legislation the defined contribution plan and the variable contributioncontribution plan and the variable contribution

Innovation - Complementary Innovation - Complementary Social SecuritySocial Security

8

Defined the constitution of multiple plans and Defined the constitution of multiple plans and multiple sponsored entitiesmultiple sponsored entities

Allowed the transfer of risk to retired participantsAllowed the transfer of risk to retired participants

Established the taxes defermentEstablished the taxes deferment

Innovation - Complementary Innovation - Complementary Social SecuritySocial Security

9

SOCIAL SECURITY

Covarege - 10 SM

Desirable - 3 SM

Regulation Bills

International Overview

Social Security Tripod

10

Supplementary Pension Legislation

Status - Final passing stage

Progress - Sectorial Funds

Deferred Taxation

Vesting

Portability

11

Abrapp’s Actions

1. Regulation of Supplementary Bills

2. From Fomento to the implementation of Pension Funds

3. Training

Education of technicians

Specialization of managers

4. Excellence Center

12

Consolidated investment portfolioConsolidated investment portfolio

1 - Stock

2 - Real estate

3 - Long term deposits

4 - Investment funds - RF

5 - Investment funds - RV

6 - Loans to private persons

7 - Real estate financing

8 - Private bonds

9 - Public bonds

10 - Others

11 - Oper. with sponsors

TOTAL

Asset type

19,2

10,7

9,7

22,8

10,2

1,9

4,4

3,6

6,5

2,6

8,4

100

%

R$ million

17.465

9.684

8.818

20.648

9.214

1.740

4.021

3.229

5.918

2.382

7.637

90.757

dec./98

Source: Abrapp

26,3

8,8

4,6

31,6

12,2

1,6

3,4

2,5

6,3

2,6

0,1

100

%

30.259

10.110

5.313

36.423

14.066

1.805

3.868

2.892

7.307

3.011

70

115.124

dec./99

Var %

(7)

3

(23)

29

(3)

24

(2)

(11)

17

40

194

9

22,5

8,4

3,3

37,6

11,0

1,8

3,0

2,1

6,9

3,4

0,2

100

%

28.132

10.453

4.077

46.997

13.702

2.231

3.793

2.567

8.559

4.228

206

124.945

Nov./00

13

Investment GrowthInvestment Growth

PERIOD INVESTMENTS VARIATION * VARIATIONPERIOD INVESTMENTS VARIATION * VARIATION

INICIAL INICIAL FINAL FINAL accr. average accr. average

19941994

19951995

19961996

19971997

19981998

19991999

Nov./00Nov./00

//////

46.48846.488

57.46157.461

71.67271.672

86.86186.861

90.75790.757

115.124115.124

//////

23,6 %23,6 %

24,7 %24,7 %

21,2 %21,2 %

4,5 %4,5 %

26,8 %26,8 %

8,5 %8,5 %

46.48846.488

57.46157.461

71.67271.672

86.86186.861

90.75790.757

115.124115.124

124.945124.945

(R$ million)(R$ million)

//////

23,6 %23,6 %

24,2 %24,2 %

23,2 %23,2 %

18,5 %18,5 %

20,2 %20,2 %

18,2 %18,2 %

* Average to the limit of each yearSource: Abrapp

14

Retirement pensions

Pensions for infirmity

Pensions by age

Pensions

Types of Benefits - Types of Benefits - AccruedAccrued ValueValue

Continued Payment Benefits

Special pensions

Pensions for Time of Work

Advanced Pension

Delayed Pension

Source: AbrappSource: AbrappNoviembre/Noviembre/0000

1.4381.4381.6041.604

1.3111.311

820820

2.0512.051

898898

6026021.0301.030 698698

R$R$

15

Types of Benefits - Types of Benefits - AccruedAccrued ValueValue

R$R$Nov./00Nov./00

Continued Payment Benefits

Retirement Pensions

Data from those funds who sent us information

TYPE VALUE QUANT. Monthly average

Special

Infirmity

Time of Work

Age

Other pensions

Pensions

Advanced

Delayed

620.697

540.264

431.526

336.740

1.438

1.604

68.103 51.967 1.311

29.570 36.081 820

410.397 200.059 2.051

7.884 8.776 898

22.034 11.142 n.a.

58.400 83.644 698

23.541 39.111 602

769 746 1.030

Source: Abrapp

16

Authorized Pension FundsAuthorized Pension Funds

19951995 19961996 19971997 19981998 19991999 Nov./00Nov./00Source: SPC

17

Participants of Pension FundsParticipants of Pension Funds

Active Participants

Retired andPensioned

Relatives

Total

1.661

379

4.333

6.373

X 1.000

Nov./00Source: Abrapp

18

Scenario 5 Scenario 5 MSMS

Quant. EFPPQuant. EFPP

Invest. R$ B.Invest. R$ B.

Scenario 7 Scenario 7 MSMS

Quant. EFPPQuant. EFPP

Invest. R$ B.Invest. R$ B.

Scenario 10 Scenario 10 MSMS

Quant. EFPPQuant. EFPP

Invest. R$ B.Invest. R$ B.

20052005 20102010YEARYEAR

280280

250250

200200

1.0001.000

770770

500500

490490

425425

320320

1.2701.270

970970

590590

Growth Potential of Pension FundsGrowth Potential of Pension Funds