PREVI :: Annual Report 2008

from the Executive Board from the Deliberative Body from the Audit Committee from Plano 1's Consultative Council from PREVI Futuro's Consultative Council

PREVI: Who we are, Mission, Vision, Values Composition of the Management

Investments Governance Management Social Security

Socioenvironmental responsibility Customer Service Risk Planning & Management

Benefit Plan 1 PREVI Futuro Benefit Plan CAPEC

Balance Sheet Result Statement Financial Flow Demonstration Asset and Result Statement - Benefit Plan 1 Asset and Result Statement - PREVI Futuro Benefit Plan Asset and Result Statement - Capec Benefit Plan

Independent Auditors Audit Committee Deliberative Body

Home :: Management : Planning and Risk Management

Planning and Risk Management

The global economic crisis showed the importance of the planning and follow-up tools PREVI’S Planning Department has developed in the past few years.

A little more than a year ago, in October 2007, when the 2008-2014 Investment Policy was prepared, macroeconomic scenarios were built – optimistic, basic, pessimistic, and stress – to simulate the solvency and liquidity conditions of Benefit Plan 1 using an Asset and Liability Management (ALM) tool. The stress scenario had a strong decrease in the Ibovespa index in 2008 as its basic premise, based on the index's worst moments in the past 20 years as a reference.

The simulations showed that even under such conditions, the plan would not experience liquidity problems, due, mainly, to the creation of protection mechanisms such as the Minimum Cash and the Liquidity Mattress, which are composed of highly liquid assets that can be traded at any time to face the plan’s needs, regardless of the market’s conditions.

In fact, despite the 42% decrease in the Ibovespa in 2008, the plan’s payment capability was confirmed, as forecasted by the ALM simulations. Additionally, in the most acute months of the crisis, Minimum Cash resources were used to cover the plan’s actuarial needs.

Since the economic crisis affected mainly the financial institutions, the monitoring of these institutions was intensified with the preparation of individualized abstracts in which opportune, founded analyses are made of the main factors that affect bank performances, affording the manager greater decision-making security.

All of these tools form an integrated planning model the purpose of which is to subsidy the construction of the Investment Policies for PREVI’S Benefit Plans.

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