Explanatory notes
Important Fact - Benefit Plan "Plano 1" - Utilization of surplus accumulated in 2006
The negotiations that involved PREVI Directors with the Company's Committee (union labor representatives), Retirees' Committee, and Banco do Brasil S.A. resulted in the proposition of a number of procedures for the utilization of the funds allocated in December 31, 2006, under the caption "Reserve for Plan Revision" of Benefit Plan Plano 1, in the amount of R$ 20,542,064 thousand. Some of those procedures needed the approval of Departamento de Coordenação e Governança das Empresas Estatais (Department of Coordination and Administration of Government Controlled Companies) - DEST -, of the Ministry of Public Finance and of the Department of Complementary Pension Plans - SPC -. The procedures implemented in 2007 were the following:
a) To stay the collection of contributions from staff and employers during 2007 - by means of the utilization of R$ 675,000 thousand under the caption "Reserve for Plan Revision", a "Contribution Fund" of accounting character, that was established in order to provide for halting the collection of participant staff and employers' contributions during 2007, according to budgetary forecast. In July 2007 the halting of such collection and the restitution of the amounts paid since January 2007 were implemented. In December 2007, after the implemented restitutions, the balance under "Contributions Fund" amounted to R$ 3,491 thousand. The halting of payments relative to those contributions may be annually renewed, if the surplus amount under the caption "Reserve for Plan Revision" in the immediately previous year can be proved to be sufficient for that end, observing the Actuarial Opinion about that matter.
b) Special Remuneration Benefit - special monthly benefit calculated on the basis of the difference in contribution limits from 75 % to 90 % for those participants who retired after December 24, 1997, and those who will retire in the future. The actuarial calculations for the concession of such benefit, based on the figures of December 31, 2006, determine the amount of R$ 3,605,668 thousand that was allocated to the "Remuneration Fund", of actuarial character, having as contra entry the caption "Reserve for Plan Revision". In December 31, 2007, after having computed the payment of that benefit relative to the period January-December 2007, provisioned in December 2007 and paid to the beneficiaries in January 2008, plus the monthly adjustments, according the actuarial rate ( INPC + 5.75%), the credit balance under "Remuneration Fund" reached 3,935,622 thousand. Considering that the actuarial estimate of this fund, as per December 31, 2007, indicated a necessity of R$ 4,090,130 thousand, that inadequacy of 154,508 thousand was covered by transferring R$41,447 thousand from the "Proportionality Fund" and R$113,131 thousand from the caption "Reserve for Plan Revision", in accordance to paragraphs 3 and 4 of Article 86 of the Benefit Rules.
c) Special Proportionality Fund - is a monthly special benefit, calculated on the basis of the difference originated from the proportionality resulting between the benefits payable in anticipated and regular retirements, applicable to those who retired after December 24, 2007 having contributed during less than 360 months, and those thos who will retire in future under identical situations. The actuarial calculation for the concession of such benefit, based on the data of December 31, 2006, came up with the amount of R$ 1,514,799 thousand, which was allocated in the "Proportionality Fund" ,with a Pension Plan character, in contra party to the caption "Reserve for Plan Revision". In December 31st 2007, after computing the amounts paid by that benefit relative too the period January-December 2007, provisioned in December 2007 and paid to the beneficiaries in January 2008 plus the monthly adjustments based on the actuarial rate (INPC + 5.75 %), the balance in the Proportionality Fund showed a total of R$ 1,611,828 thousand. Considering that the actuarial estimate of this Fund, based on figures of December 31, 2007, indicated a necessity of R$ 1,570,351 thousand, this resulted in a surplus of R$ 41,477 thousand. Since the "Remuneration Fund" showed an inadequacy, the amount of R$ 41,477 thousand was transferred to it, according to paragraph 3, Article 86 of Benefit Rules.
d) Assured Income Special Benefit - It is a special benefit payable in up to 24 months equivalent to the sum total of staff and employers' contributions in excess of the 360th monthly payment paid during the period March 4th, 1980 to December 31, 2006. The calculation of the payment of that benefit, based on December 31st figures came up with the amount of R$ 380,896 thousand, which allocated to the "Assured Income Fund", of accounting character, in contra entry to the caption " Reserve for Plan Revision". In December 31, 2007, after computing the payment of the amounts of that benefit relative to the period January-December 2007, provisioned in December 2007 and paid to the beneficiaries in January 2008, plus the monthly adjustments (INPC plus 5,75 %), the balance in "Assured Income Fund", amounted to R$ 253,612 thousand.
e) Adoption of the Mortality Rate Table AT-83 and other events - Upon the adoption of Mortality Rate Table AT-83, in July 31st. 2007, replacing the Mortality Rate Table GAM-83, amortized in the 2nd year, in order to comply with the determinations of the Department of Complementary Pension Plans, for Pension Plans to use in their actuarial calculations at least that actuarial table, PREVI commitments with the payment of benefits suffered an increase of R$ 2,838,202 thousand, as is detailed below: i) R$ 1,560,141thousand relative to participants who admitted until April 14th , 1967, under the responsibility of Banco do Brasil (BB and PREVI contract of December 24, 1997, amended in February 2nd 1998): debit under the caption "Reserve for Plan Revision", and credit to "Anticipated Amortizing Contributions". ii) R$ 1,278,061 relative to the participants admitted after April 15th 1967 and pensioners: impact in the results of that Entity in 2007.
In addition to the amount mentioned in sub-item "i" above, the caption "Reserve for Plan Revision" was debited in the amount of R$ 479,825 thousand (R$ 456,556 thousand plus R$ 23,269 thousand of actuarial adjustment - INPC plus 5.75%), with a contra entry to the caption "Anticipated Amortizing Contributions", concerning the accounting alignment between Banco do Brasil and Previ, and relative to the following events: amount of the first portion (2005) and of the undisputed amount of the second portion (2006) due to the substitution of Mortality Rate Table GAM-71 by GAM-83 (20% deferred per annum) and amounts concerning the monthly differences between the captions "Anticipated Amortizing Contributions" and "Mathematical Provisions to Establish" which were set up during 2006.