1 Before 1977 Some open Entities by widow’s funds Some open Entities by widow’s funds Small market share Small market share Accounting pension funds, provided by businessmen Accounting pension funds, provided by businessmen Private Pension Funds

2 From Law of July/ Law of July/77 Private Pensions (open and closed entities) Private Pensions (open and closed entities) Closed Private Pensions non-profitable entities Closed Private Pensions non-profitable entities Open Private Pensions profitable entities Open Private Pensions profitable entities Private Pension Funds

3 Principles Established by Constitutional Amendment #20

4 Should observe criteria which preserve the financial and actuarial equilibrium Applicable to servers from Union, States, Federal District and Cities Only to servers of effective position Based on service time contribution Public Pension Server

5 Obliging filiation Should observe criteria which preserve the financial and actuarial equilibrium Reciprocal count - Law will regulate the financial compensation between the regimen Work accident risk will be attended, intersecting, by RGP and Private Sector It will attend the position server in commission Social Security

6 Three projects of Complementary Law will regulate the regimen of Pension Funds in complementary character 1ºComplementary Social Security Regimen, envolving the open and closed Entities(PLP 10) 2ºRelation between the Union, States, Federal District and Cities and their respective closed Entities of Complementary Social Securities(PLP 8) 3ºRules for institution at Complementary Social Security regimen by Union, States, Federal District and Cities (PLP 9) Complementary Social Security

7 Established the position of Institutional Investor, allowing the creation of Complementary Funds by Sindicates and Associations Forecast the Portability, whose regulation will be object of ordinary law Created the defined benefit Introduced in the legislation the defined contribution plan and the variable contribution Innovation - Complementary Social Security

8 Defined the constitution of multiple plans and multiple sponsored entities Allowed the transfer of risk to retired participants Established the taxes deferment Innovation - Complementary Social 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 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 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 % dec./99 Var % (7) 3 (23) 29 (3) 24 (2) (11) ,5 8,4 3,3 37,6 11,0 1,8 3,0 2,1 6,9 3,4 0,2 100 % Nov./00

13 Investment Growth PERIOD INVESTMENTS VARIATION * VARIATION INICIAL FINAL accr. average INICIAL FINAL accr. average Nov./00/// /// 23,6 % 24,7 % 21,2 % 4,5 % 26,8 % 8,5 % (R$ million) /// 23,6 % 24,2 % 23,2 % 18,5 % 20,2 % 18,2 % * Average to the limit of each year Source: Abrapp

14 Retirement pensions Pensions for infirmity Pensions by age Pensions Types of Benefits - Accrued Value Continued Payment Benefits Special pensions Pensions for Time of Work Advanced Pension Delayed Pension Source: Abrapp Noviembre/ R$

15 Types of Benefits - Accrued Value R$ Nov./00 Continued Payment Benefits Retirement Pensions Data from those funds who sent us information TYPEVALUEQUANT. Monthly average Special Infirmity Time of Work Age Other pensions Pensions Advanced Delayed n.a Source: Abrapp

16 Authorized Pension Funds Nov./00 Source: SPC

17 Participants of Pension Funds Active Participants Retired and Pensioned Relatives Total X Nov./00 Source: Abrapp

18 Scenario 5 MS Quant. EFPP Invest. R$ B. Scenario 7 MS Quant. EFPP Invest. R$ B. Scenario 10 MS Quant. EFPP Invest. R$ B YEAR Growth Potential of Pension Funds