PREVI - Relatório Anual 2007

7.1: Benefit Plan 1: this plan, by its very nature - defined benefit - in extinction and under the method of aggregate financing - must have its costing plan ⁽²⁾ permanently revised in order to keep its actuarial balance.

7.1.1: The technical surplus produced in 2006 resulted in the constitution of a Special Reserve. The existence of funds in that Special Reserve did not result in a revision of the costing method, but produced several changes in Plano 1 along the year 2007, such as the temporary suspension of contributions from participants and sponsor, the creation Special Benefits or Remuneration, Proportionality and of Assured Income and the establishment of the Mortality Table AT-83. Those changes are specified in the item 10.1.

7.1.2 : The changes above mentioned were effected using funds from the Special Reserve, and the costs relative to each change are shown in the following table:

(*) Mortality Rate AT-83 was established in July 2007. The amount refers to that date.

7.1.3 : Despite the creation of the above mentioned Funds and the establishment of the Mortality rate AT-83 during the period under review a technical surplus was produced resulting in a new generation of Special Reserve, as shown in item 4.1. We recommend therefore, the costing format of Benefit Plan 1 to be constantly under review.

7.1.4 : Considering what we here have presented, we further recommend to maintain the suspension of contributions on behalf of Benefit Plan 1during 2008, rebuilding the Contributions Fund based on the annual budget relative to the contributions from participants and sponsors without repercussion on the Costing Plan.

7.1.5 : We also point out that the present amount of gross future contributions from participants and sponsors) is calculated in R$7,137, 226,876.03 (seven billion, one hundred and thirty seven million, two hundred and twenty six thousand, eight hundred and seventy six reais and three cents).

7.2 : PREVI Futuro Benefit Plan: this plan, of a variable contribution nature, must have its actuarial liabilities permanently balanced with the plan's Liquid Assets, since 96, 90 % of the Mathematical Funds correspond to active participants' Account Balances.

7.2.1 : This plan has a global costing established by rules and cannot exceed 7 % of the total of the participation payroll of participant employees.

7.2.2 :Considering that the Risk Management and Risk Oscillation Funds show enough balances to meet this Plan's operational adjustments, as stated in items 10.2.4 and 10.2.5, we suggest the evaluation in the reduction of PREVI's share to be effected through the length of 2007.

7.2.3 : We estimate as satisfactory the maintenance of the present Costing Plan, although pointing out the necessity of revising the risk ratio relative to Part I (risk benefits) after having implemented the reduction in PREVI' s share, in order to assure the balance in this plan.

7. 3 : Annuity Portfolio - CAPEC: We recommend continuing with the review of the Costing Plan, in accordance to the studies presented by the actuarial area, which observed the flow of new enrollments, cancellations, profile of the Portfolio's population and the present balance in the Capec Fund.

⁽²⁾ According to the actuarial financing method, deficits and surpluses must be compensated through the revision of the Costing Plan. In addition, there are legal procedures to be followed: for deficits, paragraph 3 of Art. 18 of LC 109, and for surpluses, paragraphs 1, 2 and 3 and caput of article 20 of LC 109.