Investment policy 2008
Benefit Plan 1
1.Closed Complementary Pension Plan Entity:
Caixa de Previdência dos Funcionários do Banco do Brasil - PREVI
2. Year: 2008
3. Minutes of the Deliberative Board / Date of Meeting:
Minutes 218, 12 / 18 / 2007
4. Benefit Plan: Benefit Plan 1
5. Actuarial Goal of the Benefit Plan:
Indexation INPC - Rate of Interest 5,75%
6. AETQ - Statutory Technically Qualified Administrator:
6.1.Fixed Income: Cecília Garcez and José Reinaldo Magalhães
6.2. Variable Income: Cecília Garcez and José Reinaldo Magalhães
6.3. Real estate: Cecília Garcez and José Reinaldo Magalhães
6.4. Financing: Cecília Garcez and José Ricardo Sasseron
7. Mechanism of Policy Information Mechanism to Participants: (x) Electronic Means (x) in Printing
TABLE SUMMING UP THE INVESTMENT POLICY OF EFPC, ACCORDING TO REGULATION ANNEXED TO RESOLUTION CMN 3496 / 2006
8. Allocation of Funds
9. Maximum Diversification Limits
10. Management of Funds
The strategies that privilege liquidity and consolidate planning instruments were followed. Among them, those that project macroeconomic scenarios and the creation of simulated cash flow and risk analysis exercises. Out of those simulations come out liquidity indicators with which it is feasible to establish and monitor the goals set for each Plan.
Plano 1 has large investments in variable income instruments, occasionally exposed to the characteristic oscillations of the stock market. Through the tools that it operates, PREVI can make trustworthy readings f those oscillations and economic indicators, guaranteeing a situation of liquidity to meet its commitments.
To give an idea of the precautions adopted and of the simulations under study, the stress scenario was considered when elaborating the Investment Policy 2008; simulations were made based on the greatest fall occurred in the stock market in a 12 month period between 1908 and 2007. Such evaluations aim at evaluating the solvency conditions of the plan (amount of assets vs. pledged commitments), as well as the liquidity (capacity of meeting the monthly obligations) under adverse market conditions. The outcome showed that even in those circumstances it would be possible for PREVI to avail itself of enough means to honor the payment of benefits without needing to sell any stock. This the result of the creation of a "liquidity cushion", instrument through which are kept in reserve high liquidity assets, usually government bonds with short term maturities and /or coupons.
11. Contracting Criteria - Administration of fixed and variable income portfolios
The criteria for contracting external mangers for the administration of variable income portfolios are classified as follows:
a) Qualitative - General data about the asset administration company:
- Name and a brief résumé of shareholders, managers and analysts;
- Portfolio of clients;
- Experience;
- PREVI former experience with that company;
b) Quantitative - Financial data of assets managed by the company:
- Total assets managed by the company, broke down by types;
- Assets from institutional investors managed by them;
- Assets under their management broke down by type of investments (portfolios and volumes);
- Profitability of investments.
Considering the specific characteristics in each case, the several elements will be considered in order to identify the manager with the best profile to manage the funds. In each contracting, after the compilation and consolidation of data, the proceedings will be submitted to the Executive Board for their deliberation.