2006 Report and Financial Statements
Report and Financial Statements
Sociedade Gestora do Fundo de Pensões do Banco de Portugal, S.A.
2006 Report and Financial Statements
Contents
Data on Sociedade Gestora do Fundo de Pensões do Banco de Portugal, S.A.
Members of the Corporate Bodies
Report of the Board of Directors
Sociedade Gestora do Fundo de Pensões do Banco de Portugal, S.A.
Balance sheet and profit and loss account
Annex to the balance sheet and the profit and loss account
Legal certification of accounts
Pension Fund of the Banco de Portugal
Financial position and income and expenses account
Notes to the financial position and the income and expenses account
Certification of accounts
Actuarial valuation
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Sociedade Gestora do Fundo de Pensões do Banco de Portugal, S.A.
2006 Report and Financial Statements
Data on Sociedade Gestora do Fundo de Pensões do Banco de Portugal, S.A.
Sociedade Gestora do Fundo de Pensões do Banco de Portugal, S.A. (Banco de Portugal’s Pension Fund
Managing Company) was set up on 3 June 1988, with the purpose of managing and representing
the Pension Fund of the Banco de Portugal.
The equity capital of this Managing Company is €1,000,000.
The shareholders are:
• Banco de Portugal, holding 97.8% of the capital as at 31 December 2006; and
• the members and beneficiaries of the Pension Fund of the Banco de Portugal.
The head office is located at Rua do Comércio, N.º 148, in Lisbon.
Services are located at Av. da República, N.º 57, 7.º, in Lisbon.
As at 31 December 2006:
• the Managing Company’s net assets amounted to €2,235 thousand;
• the Managing Company’s equity capital amounted to €2,011 thousand;
• the Pension Fund value amounted to €1,208,550 thousand; and
• total liabilities amounted to €1,226,239 thousand.
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2006 Report and Financial Statements
Members of the Corporate Bodies
Shareholders’ Meeting
Chairman
Armando da Silva Couto
Secretary
Hernâni Fontoura Pires
Board of Directors
Chairman
António Manuel Martins Pereira Marta
Member of the Board
Manuel Ramos de Sousa Sebastião
Executive Director
Helena Maria de Almeida Martins Adegas
Single Auditor
Ernst & Young Audit & Associados – SROC, S.A.
Alternate of the Single Auditor Rui Abel Serra Martins, R.O.C.
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Sociedade Gestora do Fundo de Pensões do Banco de Portugal, S.A.
2006 Report and Financial Statements
Report of the Board of Directors
In conformity with the legal and statutory requirements, the Board of Directors hereby submits
to the shareholders of Sociedade Gestora do Fundo de Pensões do Banco de Portugal, S.A. the Report
and Financial Statements, as well as other documents regarding the fiscal year 2006.
1. BUSINESS ACTIVITY CARRIED OUT
1.1.
Activity developed
In the course of 2006, Sociedade Gestora do Fundo de Pensões do Banco de Portugal continued to focus
on developing the internal structure, rather than relying on outsourcing.
A new securities custody service was contracted, supported by state-of-the-art technological
solutions, which will allow for a considerable decrease in related charges, namely due to a
reduction in outsourced services.
At IT level, steps continued to be taken to modernise the technological support platform. These
include in particular the use of electronic platforms to replace the traditional means, the
reinforcement of their security infrastructure, as well as the implementation of alternative
systems to ensure business continuity and operational efficiency. Following the implementation
of computer applications supporting the financial and management activity, new projects were
developed internally regarding the operational framework of both the Pension Fund and the
Managing Company.
With regard to co-operation with the Portuguese-Speaking African Countries, work continued
to support the development of the management structures of the central banks’ pension funds,
both regarding the preparation of actuarial valuation studies and the training of staff working for
the corresponding managing companies.
1.2. Human resources
In 2006 Sociedade Gestora do Fundo de Pensões do Banco de Portugal employed, on average, 36 staff, of
which 61% were female employees.
The training policy has promoted the high qualification of the staff, offering support to staff
enrolment in post-graduate studies or master’s degrees. As a reflection of this long-term
strategy, 69% of the staff hold a university degree.
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2006 Report and Financial Statements
1.3. Balance sheet analysis and profit and loss account
The own funds of the Managing Company increased by 4%, following the incorporation of net
profit for the fiscal year 2005, rising from €1,933,025 on 31 December 2005 to €2,010,904 on 31
December 2006.
Total income in the fiscal year amounted to €3,425,773, accounting for an increase of 3.2%
compared to the previous year. Of this amount, the management fee totalling €3,369,279 was
particularly important, as it grew by 3.4% compared to the previous year.
The main items in operational costs were: supplies and services from third parties, staff costs
and depreciation for the year, which recorded changes of +6.5%, +2.1% and -12.7%
respectively, compared to the previous year.
Chart 1 - Developments in costs of the Managing Company
2,15
2,5
1,99
1,94
2
1,5
1
1,03
0,96
0,91
0,29
0,25
0,26
0,5
0
EUR millions
2004
2005
2006
Supplies and services from third parties
Staff costs
Depreciation for the year
The growth of supplies and services from third parties mostly resulted from the increase in nonrecurring charges for legal services. In turn, staff costs, which account for almost 60% of the
total charges of the Managing Company, increased slightly below inflation.
The increase in net profit for the year makes it possible to accommodate the Pension Fund’s
growth, namely regarding the solvency margin, which amounted to 106.76% at the end of the
fiscal year 2006.
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Sociedade Gestora do Fundo de Pensões do Banco de Portugal, S.A.
2006 Report and Financial Statements
2. PENSION PLANS
The Pension Fund of the Banco de Portugal funds several benefits related to retirement and
survivors pensions, as well as the Bank's contributions to SAMS (social health assistance service
of bank employees), related to post-retirement benefits.
Various pensionable components contribute to these benefits, which are grouped into two types
of cash benefit programmes: those related to the base wage – generally known as Base Plans
and corresponding to four programmes – and those intended to provide for the payment of
pensions relating to the complementary salary – known as Schemes and covering three
programmes. All these programmes fall within the defined benefit category, given that the
benefits granted – retirement or survivors pensions – are previously established.
2.1. Characteristics
Base Plans
•
Plan I
This plan covers all employees hired by the Banco de Portugal up to 31 December 1994. From
that date onwards, this plan was closed and no more members were admitted.
It is a non-contributory pension plan, insofar as employees do not contribute to its funding,
which is fully ensured by the Banco de Portugal.
•
Plan II
This plan entered into force on 1 January 1995 and covers employees hired after that date, who
do not come from other credit institutions covered by ACT (Acordo Colectivo de Trabalho do Sector
Bancário – the collective wage agreement prevailing for the banking sector) as far as social
security matters are concerned.
It is a contributory pension plan, insofar as employees contribute to its funding with 5% of their
pensionable remuneration, as laid down in Clause 137-A of ACT, while the remainder is paid by
the Banco de Portugal.
•
Plan III
This plan covers the members of the Board of Directors of the Banco de Portugal and started
on 1 February 1998, with the entry into force of Law No 5/98 of 31 January 1998 – Organic
Law of the Banco de Portugal. With the entry into force of Decree-Law No 39/07 of 20
February 2007 this plan was closed.
It is a contributory plan, where members participate in its funding with a percentage calculated
on the basis of the rate fixed in Clause 137-A of ACT.
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2006 Report and Financial Statements
•
Plan IV
This plan includes employees who, although having been hired after 1 January 1995, come from
other credit institutions covered by the ACT as far as social security matters are concerned.
This is a mixed plan, given that it is non-contributory like Plan I, but grants benefits
proportional to the years of service like Plan II.
Pensionable complementary salary regimes
•
General Scheme
The scheme covers staff hired by the Banco de Portugal after 1 January 2001.
It is a contributory scheme, receiving contributions from both the Banco de Portugal and the
employees, with a share of 60% and 40% respectively, including contributions for disability and
death risks.
The benefits granted by this scheme consist of paying a retirement pension proportional to the
period of contribution (up to a maximum of 85% of the last complementary salary) and a
survivors pension to dependants of deceased employees (either active or retired).
•
Special Scheme A
This scheme covers staff hired by the Banco de Portugal up to 31 December 1998.
It is a contributory scheme to which both the Banco de Portugal and the employees contribute
according to the rules established for the General Scheme. However, in this scheme, disability
and death risks are fully funded by the Banco de Portugal.
The benefits granted by this scheme consist in the payment of a retirement pension
corresponding to 85% of the last complementary salary, when the normal retirement age is
reached or in case of early retirement, or calculated proportionally to the years of service for
pension purposes in case of disability, as well as in the granting of a survivors pension to
dependants of deceased employees (either active or retired).
•
Special Scheme B
This mixed scheme covers staff hired by the Banco de Portugal in 1999 and 2000.
In fact, it fully coincides with the mechanism applicable to Special Scheme A as regards the
sharing of contributions between the Banco de Portugal and the employees, the limits on
employees’ contributions and the coverage of shared risks, with the possibility of a capital
redemption of the pension.
With regard to benefits, this scheme coincides with the General Scheme.
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2006 Report and Financial Statements
2.2. Evolution of the population covered by the Pension Fund
Reference should be made to the high maturity of the population covered by the Pension Fund
of the Banco de Portugal, whose number of beneficiaries is higher than the number of active
staff members. Therefore, the high share of liabilities relating to pensions in payment compared
to total liabilities strongly conditions the Pension Fund’s asset management.
Table 1 - Population covered by the Pension Fund
Active members
Retired members
Pensioners
3.935
3.923
Ratio
Active members /Beneficiaries2 0,79
Total
0,77
1
Change
31-12-2006
2004/2005
-33
1.709
20
1.734
1
486
31-12-2004 31-12-2005
1.737
1.704
1.724
1.744
474
475
-12
3.929
Change
2005/2006
5
-10
11
6
0,77
Active members; 2 Retired members and pensioners.
As at 31 December 2006, the Pension Fund covered 1,709 active staff members, 1,734 retired
staff members and 486 pensioners.
2.3. Developments in benefits/charges and contributions
Chart 1 shows developments in the volume of benefits and payments by the Pension Fund in
the last ten years.
In 2006 the value of pensions paid amounted to €42,806 thousand, accounting for a 4.2%
increase from the previous year.
The value settled in 2006 as redemption capital and death grants amounted to €1,335 thousand
and €372.7 thousand respectively. In 2005 these items amounted to €1,005 thousand and €216
thousand respectively.
In 2006 the payments by the Pension Fund corresponding to contributions to SAMS regarding
settled pensions amounted to €2,824.6 thousand, compared to €2,701.4 thousands paid in 2005.
There was also the transfer of pension rights of former employees who started working in the
European Commission, as well as the closing of individual accounts of employees whose
contracts with the Banco de Portugal terminated. Given that these values are negligible
(accounting for 0.1% of overall expenditure), they are not shown in the chart below.
The sum of payments by the Pension Fund regarding these items totalled €47,460 thousand,
accounting for a 5.3% increase from the fiscal year 2005.
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2006 Report and Financial Statements
Chart 2 - Volume of benefits and payments by the Fund
50.000
45.000
40.000
35.000
30.000
25.000
20.000
15.000
10.000
5.000
0
1997
1998
1999
2000
2001
2002
2003
2004
2005
Pensions
Redemption Capital
Death Grants
Contributions to SAMS
2006
As the plans/schemes funded by the Pension Fund are defined benefit schemes, the
contributions are a “dependent variable”. Thus, it may be necessary to make periodic
adjustments to regular contribution rates and, in some cases, to add an extraordinary
contribution, as a result of several factors, such as changes in the evolution of financial variables,
non-projected developments in benefits, or changes/updates in the calculation assumptions.
In 2006 contributions totalled €85.8 million. This includes an extraordinary contribution of
€61.8 million, paid by the Banco de Portugal, aimed at covering the revision of actuarial
assumptions in 2006 (see section 6). Regular contributions paid by employees amounted to €1.8
million.
2.4. Actuarial and financial assumptions
In 2006 the actuarial and financial assumptions were revised and the discount rate was reset.
This led to the downward revision of that assumption, which partly counteracted the change in
market interest rates.
Therefore, at the end of 2006 the discount rate stood at 4.52% and the growth rates of wages
and pensions at 3.23% and 2.23% respectively.
The actuarial and financial assumptions used are listed in a footnote – at the end of this report –
containing the results of the actuarial valuation as at 31 December 2006.
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Sociedade Gestora do Fundo de Pensões do Banco de Portugal, S.A.
2006 Report and Financial Statements
3. MACROECONOMIC FRAMEWORK AND MARKET DEVELOPMENTS
2006 was characterised by an acceleration of economic growth in the majority of developed
economies, except Japan. In the context of emerging economies, strong economic growth in
China and India continued to be noteworthy, with rates of 10.6% and 8% respectively.
Table 2 - Economic growth and inflation rates
Gross domestic product (%)
2005
2006p 2007p 2008p
Euro
area
Portugal
United States
Japan
1.4
0.4
3.2
4.2
2.6
1.3
3.3
2.8
2.2
1.5
2.4
2.0
2.3
1.7
2.7
2.0
2005
Consumer prices (%)
2006p 2007p 2008p
2.2
2.1
3.4
-0.1
2.2
3.1
3.3
0.3
1.9
2.0
2.3
0.3
1.8
1.8
2.3
0.8
Sources: OECD, Economic Outlook (November 2006), Eurostat and Banco de Portugal
(p) Estimates and projections.
Inflation remained under control in most world major economies. The Harmonised Index of
Consumer Prices grew by 2.2% in the euro area and 3.3% in the United States. In Japan, prices
recorded a positive change (0.3%) for the first time in many years, pointing to the end of the
deflationary cycle in that country.
Table 3 - Developments in the main euro area interest rates
Dec.2005
Dec.2006 Change (p.p.)
Key ECB interest rate
Rate on the main refinancing operations
2.25%
3.50%
1.25
Money market yields (*)
3 months
1 year
2.49%
2.84%
3.73%
4.03%
1.24
1.18
2.86%
3.30%
3.57%
3.88%
3.95%
4.07%
1.02
0.65
0.50
Treasury bond yields (**)
2 years
10 years
30 years
(**)
Source: Reuters.
(*) Euro area benchmark: Euribor rates.
(**) Euro area benchmark: German government bonds..
In 2006 monetary authorities raised key interest rates, in order to contain any inflation pressures
in a context of economic growth. The ECB pursued a policy of euro area key interest rate
increases, which started in December 2005, raising it by 1.25 percentage points during the year, to
3.5%, at the end of 2006. In turn, key interest rates of the FED, Bank of England, Bank of Japan
and Swiss National Bank were raised by 1, 0.5, 0.25 and 1 percentage point respectively.
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2006 Report and Financial Statements
Market interest rates, for the various maturities and currencies, followed this upward movement
in official rates. In the euro area, rises were more significant in the shorter maturities.
In the private debt market, similarly to the previous year, 2006 was marked by the stabilisation, at
historically low levels, of the interest rate spread on public debt. Default rates stood at historical
lows, according to the rating agency Moody’s, which may be explained by the dynamic pace of
global economic growth, making it possible for companies to continue to reduce the share of
debt in their balance sheets and to record strong financial results growth.
Equity market valuation, reflecting strong economic growth and the consequent positive impact
on corporate financial results, was considerable, albeit more subdued than in 2005. The
European DJ Eurostoxx 50 index increased by around 18.9%, the US S&P 500 index by 17.9%
and the Japanese index by 7.9%.
Turning to the foreign exchange market, and conversely to 2005, the euro appreciated by around
11% against the US dollar. This may be due to the combined effect of three factors: the more
“aggressive” ECB action, compared to the FED, and the resulting narrowing of the interest rate
differential between the euro area and the United States, making the euro somewhat more
attractive than the US dollar; the rise in the share of reserves in euro to the detriment of US
dollar in Asian and oil-exporting countries; and the systematic increase of the US trade deficit.
Oil prices fluctuated throughout 2006, reaching around USD 78 per barrel in mid-August, but at
the end of the year, they stood at levels close to those seen in the beginning of the year, i.e.
around USD 61 per barrel.
Outlook for 2007
According to the forecasts of the main international organisations, a slight slowdown in the pace
of economic growth is forecast for 2007, compared to the previous year. Inflation is likely to
remain under control in the major world economies, with central banks not allowing inflation
pressures to materialise. The ECB is likely to pursue its policy of raising interest rates, although at
a more subdued pace than in 2006. With regard to the FED, uncertainties persist about the next
interest rate move.
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Sociedade Gestora do Fundo de Pensões do Banco de Portugal, S.A.
2006 Report and Financial Statements
4. ASSET PORTFOLIO STRUCTURE
The management of the Pension Fund’s asset portfolio was determined by a policy of
approximation to the liability structure, in order to limit the risk of a reduction in the funding
level of the Pension Fund. To this end:
• the structure of the bond portfolio changed considerably in early 2006, proceeding with
the move (started at the end of 2005) from fixed-rate bonds to euro area inflation-linked
bonds;
• the asset mix in the Pension Fund portfolio was slightly adjusted throughout the year, with
a small reduction in the exposure to equity, in favour of the remaining asset classes;
• the modified duration of the fixed-income portfolio increased over the year, standing at
16.4 as at 31 December, compared to 12.7 at the end of the previous year.
Chart 3 - Structure of the Pension Fund’s portfolio
Real estate 13,5%
Shares 9,7%
2,6%
7,3%
6,2%
0,3%
1,2%
5,6%
1,1%
1,0%
Bonds
74,8%
76,8%
Public debt
Euro area
Asia-Pacific
Corporate debt "
Supranational and similar debt
North America
Non-euro area Europe
Buildings
Mutual funds
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Sociedade Gestora do Fundo de Pensões do Banco de Portugal, S.A.
2006 Report and Financial Statements
5. STRATEGIC BENCHMARK
At the end of 2006, the study undertaken to choose the strategic benchmark of the Pension
Fund for 2007 was concluded. Its initial composition, with a strong exposure to euro area longterm inflation-linked bonds, shows that the asset management policy is strongly targeted at
limiting the risk of a reduction in the funding level.
However, there is a significant benchmark exposure (21.2%) to assets that are less correlated
with the liabilities, implying a positive risk premium. This shows that the investment strategy for
2007 aimed not only at limiting risk but also at maximising the expected results of the asset and
liability management.
Table 4 - Composition of the Pension Fund’s strategic benchmark for 2007
Bonds and liquidity
Inflation-indexed bonds
Other bonds and liquidity
Shares
Euro area
Non-euro area Europe
North America
Asia-Pacific
Real estate
78,8%
73,4%
5,4%
9,00%
2,8%
2,0%
3,2%
0,9%
12,2%
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Sociedade Gestora do Fundo de Pensões do Banco de Portugal, S.A.
2006 Report and Financial Statements
6. RESULTS OF THE ASSET-LIABILITY MANAGEMENT OF THE PENSION
FUND
In 2006 the Pension Fund’s liabilities and the asset portfolio were conditioned by the increase in
euro area interest rates.
In a context of a marked-to-market valuation of liabilities, the impact of this rise on the value of
past service liabilities was only partly eased by the less significant increase in the expected rate of
inflation.
As a consequence, the adjusted value of past service liabilities, considering the impact of the
payment of pensions net of the receipt of regular contributions, minus the effect of exogenous
factors, showed a negative change of -3.3% in 2006. From an integrated asset and liability
management perspective, this change is the benchmark for the asset rate of return.
Table 5 - Results of the asset-liability management of the Pension Fund
Yields (1)
(a)
Change adjusted for liabilities
-3,3%
Asset portfolio
(b)
(c)=(1+b)/(1+a)-1
Bonds
Public debt
Corporate debt
Supranational and similar debt
-4,3%
-4,5%
2,5%
2,2%
Shares
Euro area
North America
Non-euro area Europe
Asia-Pacific
17,1%
19,8%
14,2%
13,1%
10,5%
Real estate
Buildings
Mutual funds
7,9%
11,2%
4,0%
Total
-1,0%
Results of the asset-liability
management
2,4%
1) Time-weighted rate of return
The asset-liability orientation of the investment policy, focused on limiting the risk of a
reduction in the funding level, led to a strong exposure to assets correlated with liabilities, in
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Sociedade Gestora do Fundo de Pensões do Banco de Portugal, S.A.
2006 Report and Financial Statements
particular euro area long-term inflation-linked Treasury bonds. As a consequence, the asset rate
of return was also conditioned – although to a lesser extent than the cost of liabilities – by the
upward movement of interest rates, being negative (-1.0%).
In 2006 the asset-liability results of the Pension Fund amounted to +€27.7 million (which
corresponds to the difference between the decline in the value of the assets and in the adjusted
value of the liabilities), representing 2.4% of the past service liabilities’ value. These results can
be attributed to three factors:
• the exposure to equity risk, whose contribution to results was around 50% (1.1% of the
liabilities’ value);
• the exposure to real estate risk, with a contribution of 0.5% of the liabilities’ value;
• the exposure to interest rate and inflation rate risks, with a contribution of 0.8% of the
liabilities’ value.
With regard to the use of those financial management earnings generated in 2006:
• around half (1.2% of the liabilities’ value) were used to finance 20% of the impact of the
actuarial assumptions’ revision (the remaining 80% were funded through an extraordinary
contribution made by the Banco de Portugal);
• 0.5% of the liabilities’ value were absorbed by actuarial deviations and exogenous factors
to the financial management of the Pension Fund;
• the remaining 0.7% of the liabilities’ value correspond to an increase in the funding level
of the Pension Fund (from 97.9% in December 2005 to 98.6% in December 2006).
Table 6 - Use of the results of the asset-liability management (as a % of the liabilities
value)
Change in actuarial assumptions
Exogenous factors and actuarial deviations
Change in the funding level
Total
1,2%
0,5%
0,7%
2,4%
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Sociedade Gestora do Fundo de Pensões do Banco de Portugal, S.A.
2006 Report and Financial Statements
7. RISK CONTROL
The Pension Fund’s investment policy is bound by regulations set forth by the Instituto de Seguros
de Portugal – ISP (the supervisory authority for insurance companies and pension funds), namely
as regards the asset composition and control as well as the use of derivatives, repurchase
agreements and securities lending. It is also bound by internal rules, which are more detailed and
tighter than the regulations. These rules were set out by the Managing Company itself, strictly in
line with the risk profile indicated by the Banco de Portugal.
In the course of 2006 the portfolio structure was subject to constant analysis and monitoring,
intended to identify the degree of exposure to different types of risk and to mitigate those risks
by placing internal limits or recurring to hedging instruments.
Market risk is assessed from an asset-liability perspective, consisting in the risk of a reduction in
the funding level of the Pension Fund. Therefore, the market risk control is ensured by pursuing
an asset management policy in line with the liabilities structure.
The control of credit risk associated with institutions issuing securities included in the
investment portfolio or with those counterparties with which transactions are dealt is ensured by
restricting investment to instruments and institutions of recognised safety and financial
soundness. It also implies monitoring the rating given by international agencies, such as Fitch
Ratings, Moody’s Investor Service and Standard & Poor’s, which must comply with the
minimum levels established. The risk diversification policy is executed from an economic group
perspective, through the setting of limits to the concentration of exposure to entities belonging
to the same group.
Chart 4 Exposure of the fixed-income portfolio by type of issuer/counterparty
(31 December 2006)
1.5%
0.1%
98.4%
Government
Supranational
Financial institutions
At the end of 2006, the Pension Fund’s fixed-income portfolio showed a low level of credit risk,
given the large share of sovereign issuers with a high rating.
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2006 Report and Financial Statements
Chart 5 - Exposure of the fixed-income portfolio by rating of the issuer/counterparty
(31 December 2006)
1.3%
38.0%
60.7%
AAA
AA
A
Country risk remained very low, given that the portfolio continued to be predominantly exposed
to euro area countries, accounting for 97.5% of the total at the end of 2006.
Chart 6 - Geographical distribution
(as at 31 December 2006)
0.2%
1.6%
0.8%
97.5%
Euro area
Asia-Pacific
Non-euro area Europe
North America
The management of the investment portfolio’s exchange rate risk continued to be carried out
through forward foreign exchange transactions linked to investment in assets denominated in
currencies other than the euro. The exchange rate risk was close to zero.
As for legal risks, special emphasis is placed on the analysis of the legal framework and on the
permanent monitoring of the strict compliance with the rules and limits of prudential
diversification defined by the Instituto de Seguros de Portugal concerning the asset composition of
the Pension Fund’s portfolio.
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2006 Report and Financial Statements
FINANCIAL POSITION OF THE PENSION FUND FROM AN ASSET-LIABILITY
PERSPECTIVE
As at 31 December 2006, the assets of the Pension Fund of the Banco de Portugal amounted to
€1,208.6 million, accounting for an increase of €27.0 million from a year earlier.
Total past service liabilities amounted to €1,226.2 million, €691.2 million of which are liabilities
relating to pensions in payment and €535.1 million to past service liabilities of active staff. In
2006 the increase in past service liabilities amounted to €18.8 million.
This increase in past service liabilities corresponds to an overall rise of +1.6%. This is broken
down into 2.4% regarding the expected costs for the year and -0.8% resulting from the
combined effect of the indexation of actuarial and financial assumptions (increase in discount
rates compared to the end of the previous fiscal year, although partly offset by the resetting of
the discount rate and by higher inflation) and other deviations.
Chart 7 - Developments in assets and liabilities of the Pension Fund
(EUR millions)
1400
1200
1000
800
600
400
200
0
2002
Pension Fund value
2003
2004
2005
2006
Past service liabilities
At the end of the year, the Pension Fund recorded an overall funding level of 98.6%, ensuring a
full coverage relating to pension payments and a 96.7% coverage of past service liabilities of
active staff (i.e. above the minimum funding level established in the Notices of the Banco de
Portugal).
For the purposes of the provisions of Notice of the Banco de Portugal No 12/2001, as amended
by Notice of the Banco de Portugal No 4/2005, the degree of coverage was 111.8% of the
minimum required. The requirements established by the Instituto de Seguros de Portugal were also
fully complied with, and the coverage of the minimum solvency reached 125.3%.
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2006 Report and Financial Statements
Table 7 - Financial position of the Pension Fund
(EUR)
31 Dec. 2005
(1)
(2)
(3)= (1)/(2)
(4)
(5)= (1)/(4)
(6)
(7)= (1)/(6)
Pension Fund value
Past service liabilities (PSL)
Actual funding level
Compulsory minimum PSL (Notice of Banco de Portugal
No 4/2005)
Coverage of PSL of statutory funding
PSL for the calculation of the minimum solvency ratio
Minimum solvency coverage
31 Dec. 2006
1.181.526.663 1.208.550.035
1.207.429.808 1.226.238.773
97,9%
98,6%
1.023.931.378 1.081.453.102
115,4%
111,8%
930.486.308 964.546.285
127,0%
125,3%
19
Sociedade Gestora do Fundo de Pensões do Banco de Portugal, S.A.
2006 Report and Financial Statements
9. PROPOSAL FOR THE DISTRIBUTION OF RESULTS
The net profit in the accounts of Sociedade Gestora do Fundo de Pensões do Banco de Portugal, S.A., for
the fiscal year 2006 amounted to €77,879.94, which shall be distributed as follows:
Legal reserve
Free reserves
Total
€3,894.00
€73,985.94
€77,879.94
20
Sociedade Gestora do Fundo de Pensões do Banco de Portugal, S.A.
2006 Report and Financial Statements
10. FINAL REMARK
The Board of Directors would like to conclude the Report and Financial Statements for the
fiscal year 2006 by thanking Banco de Portugal for its confidence and co-operation.
A word of recognition is also due to the Instituto de Seguros de Portugal for the manner in which it
monitored the business activities of Sociedade Gestora do Fundo de Pensões do Banco de Portugal, S.A..
Finally, reference should be made to the high professionalism and dedication of all the staff of
the Managing Company, who played a decisive role in the results achieved.
Lisbon, 19 March 2007
Board of Directors
António Manuel Martins Pereira Marta
Chairman
Manuel Ramos de Sousa Sebastião
Member of the Board
Helena Maria de Almeida Martins Adegas
Executive Director
21
Sociedade Gestora do Fundo de Pensões do Banco de Portugal, S.A.
2006 Report and Financial Statements
Sociedade Gestora do Fundo de Pensões do Banco de Portugal, S.A.
22
Sociedade Gestora do Fundo de Pensões do Banco de Portugal, S.A.
2006 Report and Financial Statements
Balance sheet and profit and loss account
23
Sociedade Gestora do Fundo de Pensões do Banco de Portugal, S.A.
SOCIEDADE GESTORA DO FUNDO DE PENSÕES DO BANCO DE PORTUGAL, S.A.
BALANCE SHEET
(EUR)
ASSETS
LIABILITIES
2006
GA
2005
AA
NA
2006
Tangible fixed assets:
Buildings and other constructions
Basic equipment
Office equipment
Other tangible fixed assets
Intangible fixed assets
EQUITY
54.735
186.258
2.221.564
17.018
2.479.575
10.243
117.385
1.649.818
16.326
1.793.772
44.491
68.873
571.746
692
685.802
48.407
72.624
752.632
2.819
876.482
117.229
117.229
0
0
0
0
0
0
Fixed assets under construction
CURRENT ASSETS
Short-term debts of third parties:
Government and other public entities
Other debtors
Marketable securities:
Bank deposits and cash:
Bank deposits
Cash
TOTAL ASSETS
Capital
1.000.000
1.000.000
Legal reserve
Free reserves
Results carried forward
Net profit for the year
TOTAL EQUITY
103.843
829.182
0
77.880
2.010.904
102.650
806.526
0
23.848
1.933.025
129.961
121.868
423
2.741
56.628
18.417
78.208
549
3.411
188.535
18.536
211.031
15.191
805
8.168
741
224.165
341.808
2.235.069
2.274.833
PROVISIONS FOR RISKS AND CHARGES
0
492
492
0
492
492
21.040
60.492
81.532
1.180.880
797.320
226.619
1.247
227.866
226.619
1.247
227.866
395.705
1.247
396.952
16.573
123.209
248
140.029
16.573
123.209
248
140.029
6.849
114.737
960
122.547
2.235.069
2.274.833
1.181.871
991
ACCRUALS AND PREPAID EXPENDITURE
Accrued income
Prepaid expenses
Deferred tax assets
2005
NA
4.147.061
Accountant
1.911.992
LIABILITIES
Short-term debts to third parties:
Other shareholders
Other creditors
Suppliers, c/a
Government and other public entities
ACCRUALS AND INCOME COLLECTED IN ADVANCE
Accrued expenses
Income collected in advance
TOTAL LIABILITIES
TOTAL EQUITY AND LIABILITIES
Board of Directors
SOCIEDADE GESTORA DO FUNDO DE PENSÕES DO BANCO DE PORTUGAL
INCOME AND EXPENSES ACCOUNT
(EUR)
Fiscal years
2006
Fiscal years
2005
2006
EXPENSES
Supplies and services from third parties
1.027.299
964.569
Staff costs:
1.986.185
1.944.953
Supply of services
3.369.279
3.258.506
10.732
3.380.011
10.666
3.269.172
40.225
35.768
Other interest and similar income
(D) ...................................
98
3.420.333
0
3.304.940
Extraordinary income and profits
(F) ...................................
5.440
3.425.773
13.496
3.318.436
3.425.773
3.318.436
Supplementary income
(B) ...................................
Amortisation of tangible and intangible fixed assets
257.522
294.875
22.597
30.355
8.858
650
8.093
3.310.555
24.058
3.259.461
991
3.587
(C) ...................................
6.003
3.317.549
15.476
3.278.525
Extraordinary costs and losses
(E) ...................................
12
3.317.561
6.949
3.285.474
Tax on profit
30.332
3.347.893
9.115
3.294.588
77.880
23.848
3.425.773
3.318.436
69.456
33.328
102.784
108.212
77.880
9.711
16.704
26.415
32.963
23.848
Taxes
Other operational costs and losses
Provisions for risks and charges
(A) ...................................
Provisions for financial holdings
Interest and similar costs
(G) ...................................
Net profit and loss for the year
TOTAL
Income from marketable securities and other
Financial holdings
TOTAL
Summary:
Operational profit and loss: (B) - (A) =.............................
Financial profit and loss: (D - B) - (C - A) =....................
Current profit and loss: (D) - (C) =..................................
Profit and loss before taxes: (F) - (E) =.....................
Net profit and loss for the year: (F) - (G) =.....................
Accountant
2005
INCOME
Board of Directors
SOCIEDADE GESTORA DO FUNDO DE PENSÕES DO BANCO DE PORTUGAL, S.A.
PROFIT AND LOSS ACCOUNT BY FUNCTIONS
Fiscal years
2006
2005
3.369.279
0
3.258.506
0
3.369.279
3.258.506
10.732
0
3.301.696
3.430
10.666
0
3.228.456
24.458
74.884
16.258
0
0
33.328
16.704
0
0
108.212
32.963
30.332
9.115
77.880
23.848
Extraordinary profit and loss
0
0
Taxes on extraordinary profit and loss
0
0
77.880
23.848
Sales and supply of services
Cost of sales and of supply of services
Gross profit and loss
.......................
Other operational income
Distribution costs
Administrative costs
Other operational costs and losses
Operational profit and loss
.......................
Net financing cost
Income (losses) from branches and associated companies
Income (losses) from other investments
Current profit and loss
.......................
Taxes on current profit and loss
Current profit and loss after taxes
Net profit and loss
.......................
.......................
Accountant
SOCIEDADE GESTORA DO FUNDO DE PENSÕES DO BANCO DE PORTUGAL, S.A.
PROFIT AND LOSS ACCOUNT
Fiscal year
Fiscal year
2006
2005
Operational activities
Net profit and loss
Adjustments
Amortisation
Provisions
Financial profit and loss
Increase in debts of third parties
Decrease in debts of third parties
77.880
23.848
253.159
5.243
248.404
16.135
0
81.039
-56.496
536.426
0
-132.823
164.985
-857.970
-9.724
-8.471
7.023
63
18.717
-45.595
442
0
713
1.981
196.222
27.029
380.709
62.480
-326.438
100.732
0
-43.252
443.189
-268.958
Increase in inventories
Decrease in inventories
Increase in debts to third parties
Decrease in debts to third parties
Decrease in income collected in advance
Decrease in accrued income
Decrease in prepaid expenses
Decrease in accrued expenses
Increase in income collected in advance
Profits on the disposal of fixed assets
Losses on the disposal of fixed assets
Decrease in deferred tax assets
Flows from operational activities
.....
Investment activities
Revenue from:
Financial investments
Tangible fixed assets
Intangible fixed assets
Assets under construction
Investment subsidies
Interest and similar income
Dividends
Payments relating to:
Financial investments
Tangible fixed assets
Intangible fixed assets
Flows from investment activities
.....
Financing activities
Revenues from:
Loans received
Equity increases
Supplements and issue premiums
Subsidies and endowments
Sale of shares
Loss coverage
0
0
0
0
0
0
0
0
0
0
0
0
Payments relating to:
Loans received
Repayment of financial leasing contracts
Interest and similar income
Dividends
Capital reduction and supplementary payments
Purchase of own shares
0
0
0
0
0
0
0
0
0
0
0
0
Flows from investment activities
.....
0
0
Cash change and equivalents
Effect of foreign exchange differences
Cash and equivalents at the start of the period
Cash and equivalents at the end of the period
.....
.....
.....
.....
-169.086
0
396.952
227.866
319.834
0
77.118
396.952
Accountant
2006 Report and Financial Statements
Annex to the balance sheet and the profit and loss account
29
Sociedade Gestora do Fundo de Pensões do Banco de Portugal, S.A.
2006 Report and Financial Statements
Annex to the balance sheet and the profit and loss account
Setting-up and business activity
Sociedade Gestora do Fundo de Pensões do Banco de Portugal, S.A. (Banco de Portugal's Pension
Fund Managing Company) was set up on 3 June 1988 through a notarial deed entered on
folio 74 to folio 76 of the deed book No 677 - C of the 9th Notarial Office of Lisbon, with
the purpose of administering, managing and representing the Pension Fund of the Banco
de Portugal.
The setting up of this Managing Company was authorised by Executive Order No 245/88
of 20 April 1988 of the Ministry of Finance.
The annex to the balance sheet and the profit and loss account is in line with the number
ordering set out in the Official Chart of Accounts (Plano Oficial de Contabilidade – POC).
Numbers that are not mentioned correspond to irrelevant or non-existent situations or
values.
3.
Valuation criteria
The Managing Company’s financial statements were prepared in accordance with the
accounting principles generally accepted in Portugal, i.e. going concern, consistency,
historical cost, prudence, substance over form, materiality and the accruals principle.
The valuation criteria adopted by the Managing Company are the following:
• Fixed assets
Fixed assets are valued at acquisition cost.
Depreciation is calculated over the expected lifetime of the asset, on a constant straightline basis. For the assets acquired up to and including 1993 a depreciation method is
used where equal amounts of depreciation expense are taken in each year of the asset’s
useful life. For the assets acquired after this date, a “month convention” is used,
corresponding to the number of months as of the month when the asset was placed in
service.
Depreciation rates are in conformity with the Portuguese tax legislation. The resulting
lifetime is close to that of assets.
30
Sociedade Gestora do Fundo de Pensões do Banco de Portugal, S.A.
2006 Report and Financial Statements
Depreciation rates are charged as follows:
Annual percentage
Basic equipment
10%
Office and social equipment and sundry furniture
10 to 33.33%
Other tangible fixed assets
12.50%
• Marketable securities
Marketable securities are valued at acquisition cost, which includes all acquisition-related
costs.
Provisions were set up aimed at a full coverage of the value of capital losses in the
securities portfolio and corresponding to a decline in the market value against the
acquisition cost of securities, where the former is lower.
• Recognition of costs and income
Costs and income are recognised when they occur, taking into account the period to
which they refer and regardless of their actual financial settlement.
6.
Deferred taxes
The tax effect of temporary differences between the accounting and tax results was
recognised in terms of the corporate income tax. These differences regard provisions for
securities portfolio depreciation.
Changes in deferred tax assets
Total
Total
2006
2005
Temporary differences that generated deferred tax
assets
Non-tax deductible provisions
990.87
3,841.65
Total
990.87
3,841.65
Amounts reflected in the balance sheet (25%)
247.72
960.41
Description
7.
(EUR)
Reversal of the
difference
Staff
During 2006 the average number of staff in the Managing Company was 36.
31
Sociedade Gestora do Fundo de Pensões do Banco de Portugal, S.A.
-712.69
2006 Report and Financial Statements
10. Fixed assets
Movements in this item were as follows:
INITIAL
BALANCE
TANGIBLE FIXED ASSETS
Gross assets
Buildings and other constructions
Basic equipment
Office equipment
Other tangible fixed assets
53,226.80
171,769.45
2,175,080.88
17,018.00
INTANGIBLE FIXED ASSETS
NET ASSETS
1,507.96
18,852.05
46,482.83
(EUR)
FINAL
BALANCE
WRITEOFFS/
WRITEDOWNS
4,363.17
54,734.76
186,258.33
2,221,563.71
17,018.00
117,229.01
FIXED ASSETS UNDER
CONSTRUCTION (i)
Accumulated depreciation
Buildings and other constructions
Basic equipment
Office equipment
Other tangible fixed assets
Other Research and Development
Expenses
INCREASES
117,229.01
2,534,324.14
66,842.84
(4,820.10)
(99,145.73)
(1,422,448.74)
(14,198.60)
(5,423.21)
(18,239.27)
(275,960.40)
(2,127.25)
(117,229.01)
(1,657,842.18)
876,481.96
(301,750.13)
(234,907.29)
-
-
4,363.17
2,596,803.81
48,590.98
48,590.98
52,954.15
(10,243.31)
(117,385.00)
(1,649,818.16)
(16,325.85)
(117,229.01)
(1,911,001.33)
685,802.48
(i) See Note 14.
14. Fixed assets under construction
At the end of the fiscal year 2006, no fixed assets under construction were recorded.
17. Marketable securities
This item is broken down as follows:
FIXED INCOME SECURITIES
Public debt
Sundry
VARIABLE INCOME SECURITIES
Equity
Mutual funds
Provisions for cash investments
NET VALUE
2006
(EUR)
2005
895,450.50
895,450.50
523,048.55
523,048.55
286,420.02
286,420.02
(990.87)
1,180,879.65
1.15
278,113.07
278,114.22
(3,841.65)
797,321.12
32
Sociedade Gestora do Fundo de Pensões do Banco de Portugal, S.A.
2006 Report and Financial Statements
32. Guarantees provided
As at 31 December 2006, the Managing Company had provided guarantees to the amount
of €1,845,363.12, mostly related to pending judicial proceedings.
During the fiscal year 2006 and within the scope of one judicial proceeding, the bank
guarantee for possible contingencies of the Pension Fund was renewed, to the amount of
€1,795,362.12.
Given that this judicial proceeding was settled in favour of the Pension Fund, the release of
the above-mentioned guarantee is pending judicial decision in 2007.
34. Movements in provisions
Movements in “Provisions for cash investments” were as follows:
(EUR)
INITIAL
BALANCE
Provisions
for
cash
investments (i)
Provisions for risks and
charges
INCREASE CANCELLATION
FINAL
BALANCE
3,841.65
990.87
3,841.65
990.87
121,868.00
8,092.95
0.00
129,960.95
(i) See Note 3.
Provisions for risks and charges were set up in order to meet possible judicial contingencies
of a compensatory nature.
35. Equity capital
The Managing Company’s equity capital totals €1,000,000, being fully subscribed and paid
up, and is represented by 200,000 shares with the nominal value of €5 each.
The equity capital results from the redenomination and equity increase through the
incorporation of reserves of the Managing Company’s equity capital, as approved at the
Shareholders’ Meeting held on 30 March 2001.
37. Share in the subscribed capital
The Banco de Portugal holds 97.78% of the capital, corresponding to 195,524 shares.
33
Sociedade Gestora do Fundo de Pensões do Banco de Portugal, S.A.
2006 Report and Financial Statements
40. Movements in equity capital
Movements in the fiscal year were as follows:
(EUR)
INITIAL BALANCE
INCREASES
DECREASES
1,000,000.00
102,650.44
806,526.21
23,847.89
1,933,024.54
1,192.39
22,655.50
77,879.94
101,727.83
23,847.89
23,847.89
Capital
Legal reserve
Free reserves
Profit and loss for the year
FINAL
BALANCE
1,000,000.00
103,842.83
829,181.71
77,879.94
2,010,904.48
Increases in the fiscal year were in line with the proposal for the distribution of net profit
for 2005 submitted by the Board of Directors and approved at the Shareholders’ Meeting.
45. Financial statements
(EUR)
COSTS AND LOSSES
2006
2005
Interest paid
173.15
Provisions for cash investments
990.87
3,587.38
Losses from the sale of cash investments
3,748.90
13,073.90
Other financial costs and losses
2,081.27
Financial results for the year
PROFITS AND GAINS
499.31 Interest received
1,902.91 Gains from the sale of cash
investments
33,333.62
16,704.41
40,327.81
35,767.91
TOTAL
2006
2005
40,230.31
35,767.91
97.50
-
40,327.81
35,767.91
46. Extraordinary results
(EUR)
COSTS AND LOSSES
Other extraordinary costs and
Losses
Losses in fixed assets
2006
12.18
-
2005
PROFITS AND GAINS
Decreases in amortisation and
988.92
provisions
- Gains in fixed assets
Corrections to previous fiscal years
Other extraordinary profits and gains
Extraordinary results
5,427.84
4,453.07
5,440.02
5,441.99
2006
2005
3.841.66
1.092.63
5,339.28
-
505.73
101.51
1.20
TOTAL
5,440.02
34
Sociedade Gestora do Fundo de Pensões do Banco de Portugal, S.A.
5,441.99
2006 Report and Financial Statements
48. Other relevant information
• Bank deposits
This item is broken down as follows:
(EUR)
2006
123,618.73
103,000.00
226,618.73
Demand deposits
Time deposits
2005
45,705.00
350,000.00
395,705.00
• General government and other public bodies
Value Added Tax - VAT
VAT recorded in the Managing Company’s accounts relates to a self-liquidation resulting
from services provided by a non-resident body.
Income taxes – corporate income tax
Taxes on profit are calculated on the basis of the value forecast to be paid, at the rates
prevailing on the balance sheet date, being recorded under “General government and
other public bodies”.
In accordance with the legislation in force, during a four-year period the tax
administration may check the values mentioned above. This may lead to corrections to
the tax base and to additional settlements with regard to the fiscal years from 2001 up to
and including 2006. The Board of Directors assumes that any additional settlement will
have no significant impact on the financial statements.
• Supply of services
The supply of services refers exclusively to management fees, whose amount is set on an
annual basis according to the management agreement signed between the Banco de
Portugal and the Managing Company.
By decision of the Managing Company’s Board of Directors, management fees in 2006
were set at €3,369,279.00.
• Supplementary income
This income results from a sub-lease contract.
• Staff costs
This item includes training costs directly borne by the Managing Company and costs
with staff members, who are covered by a secondment agreement concluded with the
Banco de Portugal.
35
Sociedade Gestora do Fundo de Pensões do Banco de Portugal, S.A.
2006 Report and Financial Statements
• Accruals and deferrals
This item includes payments made during the fiscal year, regarding costs for the
following year, namely costs of IT licenses.
• Suspense accounts
Pursuant to paragraph 3.1 of Regulatory Norm No 12/95-R of 6 July 1995 of Instituto de
Seguros de Portugal – ISP, the accounts of the Pension Fund are recorded under class 0 Off-balance-sheet accounts, in the following main accounts:
01 - Pension Fund of the Banco de Portugal; and
02 - Management of the Pension Fund of the Banco de Portugal.
As at 31 December 2006, these accounts were balanced and amounted to respectively
plus and minus €1,208,550,035.
Certified auditor
Board of Directors
36
Sociedade Gestora do Fundo de Pensões do Banco de Portugal, S.A.
2006 Report and Financial Statements
Legal certification of accounts
37
Sociedade Gestora do Fundo de Pensões do Banco de Portugal, S.A.
ERNST & YOUNG
Ernst & Young Audit & Associados-SROC, S.A.
Edifício República
Avenida da República, 90 – 6.º
1600-206 Lisboa
Portugal
Tel.: (351) 217 912 000
Fax: (351) 217 957 586
CERTIFICATION OF ACCOUNTS
Introduction
1. We have audited the financial statements of SOCIEDADE GESTORA DO
FUNDO DE PENSÕES DO BANCO DE PORTUGAL, S.A. (Banco de
Portugal’s Pension Fund Managing Company), which comprise the balance
sheet as at 31 December 2006 (showing a total amount of €2,235,069 and total
equity capital to the amount of €2,010,904, including a net result of €77,880)
and the Profit and Loss Account for the year then ended, as well as the
corresponding Annex.
Responsibility
2. The Board of Directors of Sociedade Gestora do Fundo de Pensões do Banco
de Portugal is responsible for the preparation and fair presentation of the
financial statements, results and turnover. This responsibility also includes
applying appropriate accounting policies and criteria and maintaining an
adequate internal control system.
3. Our responsibility is to express an independent professional opinion based on
our audit to those financial statements.
Scope
4. We conducted our audit in accordance with the Examination/Audit Technical
Rules and Guidelines of Ordem dos Revisores Oficiais de Contas (Portuguese
Statutory Auditor Institute), which require that we plan and perform our audit
to obtain reasonable assurance that the financial statements are free from
material misstatement. For this, the audit included:
•
examining, on a test basis, evidence about the amounts and disclosures in the
financial statements and an assessment of estimates used in their preparation,
which were based on judgements and criteria defined by the Board of
Directors of Sociedade Gestora do Fundo de Pensões do Banco de Portugal;
•
•
•
assessing whether the accounting policies adopted and their disclosure are
appropriate in the circumstances;
assessing whether accounts are prepared on a going concern basis; and
evaluating the overall adequacy of the presentation of information in the
financial statements.
5. Our audit also assessed the concordance between the financial information
included in the management report and financial statements.
6. We believe that our audit provides a sufficient basis for our opinion.
Opinion
7. In our opinion, the financial statements give a true and fair view in all material
respects of the financial position of Sociedade Gestora do Fundo de Pensões
do Banco de Portugal, S.A. as at 31 December 2006 and of its profit, results
and turnover for the year then ended, in accordance with the accounting
principles generally accepted in Portugal.
Lisbon, 19 March 2007
ERNST & YOUNG AUDIT & ASSOCIADOS, SROC, S.A.
Sociedade de Revisores Oficiais de Contas (n.º 178)
Represented by:
Ana Rosa Ribeiro Salcedas Monte Pinto (ROC n.º 1230)
2006 Report and Financial Statements
Pension Fund of the Banco de Portugal
40
Sociedade Gestora do Fundo de Pensões do Banco de Portugal, S.A.
2006 Report and Financial Statements
Financial position and income and expenses account
41
Sociedade Gestora do Fundo de Pensões do Banco de Portugal, S.A.
2006 Report and Financial Statements
Financial position
(EUR)
Note
Fund investments
2006
2005
Land and buildings
4
89,429,554
81,072,500
Credit securities
5
1,099,555,657
1,085,135,059
Cash and bank deposits
6
9,977,986
102,502,675
General debtors and creditors
7
(356,474)
(103,375,280)
Accruals and deferrals
8
9,943,312
16,191,709
1,208,550,035
1,181,526,663
Note
Fund value
Initial assets
2006
2005
4,987,979
4,987,979
1,176,538,684
1,007,229,209
27,023,372
169,309,475
1,208,550,035
1,181,526,663
Accumulated profit and loss and
contributions
Previous fiscal years
For the year
9
(See annexed Notes)
42
Sociedade Gestora do Fundo de Pensões do Banco de Portugal, S.A.
2006 Report and Financial Statements
Income and expenses account
(EUR)
Note
Fund value increases
2006
2005
Contributions
10
85,781,423
114,742,331
Income
11
31,644,477
57,701,929
Capital gains
12
82,774,434
212,959,168
1,812,292
73,322
202,012,626
385,476,750
Other revenue
Note
Fund value decreases
Pensions and payments
13
Mediation fees
Taxes
2006
2005
47,460,402
45,053,006
-
-
26,619
29,011
Capital losses
12
125,904,961
167,578,327
Other expenses
14
1,597,272
3,506,931
174,989,254
216,167,275
27,023,372
169,309,475
Profit and loss for the year
43
Sociedade Gestora do Fundo de Pensões do Banco de Portugal, S.A.
2006 Report and Financial Statements
Notes to the financial position and the income and expenses account
1.
Setting-up and business activity
The Pension Fund of the Banco de Portugal (the ‘Pension Fund’) was set up by the Banco
de Portugal, in its capacity as founder associate, through a public deed signed on 15
September 1988 in the 9th Notarial Office of Lisbon. The second party to the Deed of
Constitution was Sociedade Gestora do Fundo de Pensões do Banco de Portugal (Banco de
Portugal's Pension Fund Managing Company) in its capacity as managing company,
granted through the previous signature of a Pension Fund management agreement with
the Banco de Portugal.
The Pension Fund is composed of autonomous assets exclusively earmarked for the
fulfilment of Banco de Portugal’s commitment to pay retirement, disability and survivors
pensions, as well as charges for post-retirement contributions to SAMS (social health
assistance service for bank employees). It is a closed fund, operating a defined benefit
scheme and plays the role of first pillar of social protection.
2.
Financial statements
The accounts in the annex were prepared in accordance with the accounting records of
Sociedade Gestora do Fundo de Pensões do Banco de Portugal.
These accounts summarise the Pension Fund’s transactions and net assets. They do not
take into account liabilities relating to pensions or other benefits payable in the future. The
Pension Fund’s actuarial position, including these liabilities, is shown in the actuarial
report. The financial statements should be read in conjunction with this report (see Note
15).
3.
Accounting principles
a)
General
The financial statements were prepared in line with the accounting principles
generally accepted in Portugal and in accordance with the rules of the Instituto de
Seguros de Portugal – ISP.
The accounts were prepared under the historical cost convention (modified to
include the revaluation of investment in land, buildings and credit securities) and on
the basis of the going concern principle, in conformity with the basic accounting
principles of consistency, prudence and accruals.
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Sociedade Gestora do Fundo de Pensões do Banco de Portugal, S.A.
2006 Report and Financial Statements
b)
Land and buildings
Land and buildings are initially recognised at acquisition cost plus acquisition
expenses. Subsequently, this value is reassessed by independent entities, according
to the valuation regime laid down in Regulatory Norm No 16/99 of 29 December
1999 and Article 8 of Regulatory Norm No 26/2002 of 31 December 2002 of
Instituto de Seguros de Portugal – ISP.
Unrealised capital gains and losses arising from the revaluation of real estate are
recorded in the income and expenses account, in the fiscal year in which the
revaluation is made.
c)
Credit securities
Portfolio financial investments as at 31 December 2006 are valued at fair value in
accordance with Regulatory Norm No 26/2002 of 31 December 2002 of Instituto de
Seguros de Portugal – ISP. In fulfilment of this Norm, an economic methodology
adjusted to the type of financial asset in question is applied to quoted securities not
valued at fair value.
The difference between the securities’ fair value and the respective acquisition cost
is recorded under “Capital gains and losses” of the income and expenses account.
The difference between the proceeds from the sale of securities and the value for
which they were recognised is also recorded under the same items.
d)
Contributions
Upon actual receipt, Banco de Portugal’s contributions to the Pension Fund are
recorded under “Contributions to the income and expenses account” (see Note 10).
e)
Income
Income from real estate rents and from securities is recorded in the period to which
it refers, except for share dividends, which are only recognised upon actual receipt.
f)
Pensions
Pensions are paid to the beneficiaries by the Banco de Portugal, which is
subsequently repaid in full by the Pension Fund, on a monthly basis (see Note 13).
g)
Fees
Fees are recorded in the respective income and expenses account item in the period
to which they refer, regardless of their date of payment.
Outstanding fees that have not been settled yet are recorded as a counterpart to the
“Accrued expenses” item. Fees paid in advance are recorded under the “Accrued
expenses” item (see Note 8 a)).
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Sociedade Gestora do Fundo de Pensões do Banco de Portugal, S.A.
2006 Report and Financial Statements
h)
Derivatives
Foreign exchange forward contracts, conducted with the purpose of hedging
foreign exchange risk in the securities portfolio, are revalued at the foreign exchange
rates corresponding to the time to maturity. These rates are implied in the forward
exchange rate (average bid/ask price) released by internationally recognised financial
information systems at the revaluation date. The differences between the equivalent
in euro to the forward revaluation rates applied and the equivalent in euro to the
rates agreed represent the revaluations’ income or cost, which is recorded under
Pension Fund value increases or decreases respectively, namely under “Capital gains
or losses”, against “Accruals and deferrals” .
i)
Applicable taxation regime
Pension funds are exempt from the payment of corporate income tax and municipal
real estate tax (Imposto Municipal sobre Imóveis), in accordance with the Tax Incentives
Statute.
4.
Land and buildings
Date of
2006
last
evaluation Acquisition Adjustments Balance-sheet
value
value
Av. da República
Arquiparque
Av. da Liberdade Edifício Libersil
Edifício Y
Av. 5 de Outubro
Av. de Berna Espaço Berna
Linda-a-Velha Edifício Securitas
2005
Balance-sheet
value
2005
2006
8,055,047
12,230,787
10,444,953
(1,176,687)
18,500,000
11,054,100
18,500,000
9,804,200
2006
2006
2005
10,045,180
4,537,154
11,127,433
4,354,820
1,798,567
14,400,000
4,537,154
12,926,000
11,900,000
12,926,000
2005
12,796,688
1,123,312
13,920,000
13,850,000
2004
14,355,004
73,147,293
(262,704)
16,282,261
14,092,300
89,429,554
14,092,300
81,072,500
The acquisition value includes the base price, legal charges and other expenses. The
adjustment value corresponds to potential capital gains in the fiscal year 2006, to the
amount of €3,749,899, and in previous years (capital gains of €12,532,362).
Assessments should be made every three years, or earlier, when there are materially
relevant mismatches between the building’s net value and its market value.
In 2006 the buildings Edifício Libersil and Arquiparque were revalued, and the following
potential capital gains were recorded:
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Sociedade Gestora do Fundo de Pensões do Banco de Portugal, S.A.
2006 Report and Financial Statements
Potential capital
gain/(loss)
Buildings
5.
Edifício Libersil
2,500,000
Arquiparque
1,249,899
Total
3,749,899
Credit securities
2006
Adjustments
Acquisition
value
Variable income securities
Shares
Equity
-
-
-
-
128,731,225
23,913,057
152,644,282
189,299,451
983,388,323
3,726,020
1,115,845,568
(42,232,979)
2,030,011
(16,289,911)
941,155,344
5,756,031
1,099,555,657
868,853,112
21,227,669
5,754,827
1,085,135,059
Mutual fund units
Fixed income securities Bonds
Government
of other supranational issuers
of other issuers
2005
Market
value
Market
value
Adjustment values correspond to potential capital gains or losses calculated as the
difference between the market value and the historical acquisition value. In 2006 the net
value of potential capital gains and losses recorded in the income and expenses account
amounted to €43,130,527 (see Note 12 b). The remaining €26,840,616 relate to previous
years.
6.
Cash and bank deposits
This item is broken down as follows:
Cash
Demand deposits in Portugal
Demand deposits abroad
Time deposits in Portugal
7.
2006
2005
719
377,237
100,030
9,500,000
9,977,986
719
16,839,134
44,149
85,618,673
102,502,675
General debtors and creditors
This item is broken down as follows:
47
Sociedade Gestora do Fundo de Pensões do Banco de Portugal, S.A.
2006 Report and Financial Statements
Current assets
Taxes (a)
Brokers and financial intermediaries
Corporate income tax - current account (b)
Defaulting bond holders (c)
Lease-holders (d)
Derivatives (e)
Other
Current liabilities
Taxes
Brokers and financial intermediaries
Creditors - Buildings (d)
Creditors - Other (f)
Contributions and pensions to be settled
Derivatives (e)
Other
Net value
(a)
2006
2005
104,618
17,529
811,919
-
325,899
693
448,739
50,995
138,728
333,294
410,668
1,745,604
176,782
1,365,633
- 101,451,706
315,939
345,377
1,771,165
198,581
86,617
113,912
100,386
805,214 105,120,884
(356,475) (103,375,280)
Taxes - VAT
This item essentially comprises VAT paid in the reconversion works of Edifício
Libersil, to be recorded in subsequent periods. In 2006 the tax administration repaid
the requested amount.
(b)
Corporate income tax – Current account
The current account with the State Treasury records the net value of corporate
income tax withheld in the acquisition and sale of securities.
(c)
Defaulting bond holders
These values are covered by provisions recorded under “Other accruals and
deferrals” (see Note 8 b)).
(d)
Creditors - Buildings - Lease-holders/Provisions for non-performing loans
This item comprises €301,644 regarding fully provisioned non-performing debts of
Edifício Libersil’s lease-holders.
(e)
Derivatives
The derivatives utilisation policy was exclusively based on the use of foreign
exchange forward contracts to hedge foreign exchange risk in exchange traded
funds denominated in four currencies: pound sterling, US dollar, Japanese yen and
48
Sociedade Gestora do Fundo de Pensões do Banco de Portugal, S.A.
2006 Report and Financial Statements
Swiss franc, to the notional amounts of GBP 4,252,000, USD 37,708,690, JPY
293,973,000 and CHF 3,315,000 respectively.
8.
Accruals and deferrals]
This item is broken down as follows:
2006
Interest receivable
from credit securities
from time deposits
Rents received
Other accruals and deferrals
Uncollected interest - b)
Accrued expenses - a)
Deferred costs - a)
Deferred income - Buildings
Other
2005
9,910,050
32,933
-
16,441,647
53,410
(23,389)
329
9,943,312
(138,728)
(141,560)
329
16,191,709
a) Note 3 g)
b) Note 7 c)
9.
Pension Fund value
Changes in the Pension Fund value were as follows:
Pension Fund value as at 31 December 2005
Profit and loss for the year
Increases due to contributions (Note 10)
Current
Extraordinary
Decreases due to payments (Note 13)
Financial profit and loss
Pension Fund value as at 31 December 2006
10.
1,181,526,663
20,156,675
65,624,748
85,781,423
(47,337,893)
(11,420,158)
27,023,372
1,208,550,035
Contributions
The Banco de Portugal’s contributions to the Pension Fund are broken down as follows:
2005
2006
Current contributions
Extraordinary contributions
20,156,675
65,624,748
85,781,423
19,838,693
94,903,638
114,742,331
Current contributions include, in addition to the component paid by the Banco de
Portugal, contributions from its staff, under the conditions set out by their plans. In
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Sociedade Gestora do Fundo de Pensões do Banco de Portugal, S.A.
2006 Report and Financial Statements
2006 extraordinary contributions, to the amount of €65,624,748, resulted from the need
to ensure the coverage of liabilities, as required by Notice of the Banco de Portugal No
12/2001 of 23 November, as amended by Notice of the Banco de Portugal No 4/2005
of 21 February.
11.
Income
This item represents income arising from:
2005
2006
Land and buildings
Credit securities
Shares
Equity
Real-estate based and mutual fund units
Bonds
Government
of other public issuers
of other issuers
Demand deposits
Time deposits
5,980,935
5,539,011
219
3,328,926
719
12
5,690,725
21,124,667
483,627
415,269
25,352,708
53,641
257,193
310,834
31,644,477
45,362,511
706,207
82,208
51,842,381
24,876
295,661
320,537
57,701,929
50
Sociedade Gestora do Fundo de Pensões do Banco de Portugal, S.A.
2006 Report and Financial Statements
12.
Capital gains and losses
Capital gains and losses for the year are broken down as follows:
2006
2005
a)
3,819,900
3,819,900
1,183,000
1,183,000
b)
26,227,991
(65,850,486)
(39,622,495)
123,259,033
(98,416,254)
24,842,779
-
187,000
187,000
14,244,196
(24,346,013)
(10,101,817)
24,890,982
(820,382)
24,070,600
37,984,060
(35,092,297)
2,891,763
63,437,695
(68,338,577)
(4,900,882)
498,287
(616,165)
215,019
1,458
(3,115)
(1,657)
82,774,434
125,904,961
(43,130,527)
212,959,168
167,578,327
45,380,841
Potential capital gains and losses
Land and buildings
Capital gains
Capital losses
Credit securities
Capital gains
Capital losses
Realised capital gains and losses
Land and buildings
Capital gains
Capital losses
Credit securities
Capital gains
Capital losses
Derivatives
Capital gains
Capital losses
Other
Capital gains
Capital losses
Total capital gains
Total capital losses
Net value
a) Note 4
b) Note 5
13.
Pensions and payments
Pensions are granted to individuals who retire on account of age limit, disability or early
retirement, as well as to those who are entitled to survivors pensions.
This item is broken down as follows:
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Sociedade Gestora do Fundo de Pensões do Banco de Portugal, S.A.
2006 Report and Financial Statements
Retirement pensions on account of age limit
Disability pensions
Early retirement pensions
Survivors pensions
Capital payable
Charges with the payment of pensions
Death grant
Subtotal
Repayments
Transfer of rights
Total
14.
2006
2005
3,952,561
2,470,596
30,804,678
5,577,780
1,335,026
2,824,575
372,676
47,337,892
38,562
83,948
47,460,402
3,715,281
2,435,882
29,674,983
5,242,551
1,004,974
2,701,476
215,971
44,991,118
15,060
46,828
45,053,006
2006
2005
447,905
725,231
415,261
8,876
1,597,273
527,581
2,960,244
1,760
17,345
3,506,930
Other expenses
This item is broken down as follows:
Financial expenses- a)
Expenses on buildings - b)
Extraordinary expenses
Other expenses
a)
Financial expenses
This item covers expenses borne by the Pension Fund, regarding the global custody
service of financial assets.
b)
Expenses on buildings
This item covers normal costs with the management and maintenance of buildings.
15.
Actuarial report information
The Managing Company publishes, as an integral part of its accounting report, the
actuarial results of the Pension Fund of the Banco de Portugal, as at 31 December 2006.
16.
Tax liabilities
The Banco de Portugal assumes tax liabilities, under the provisions of the agency
agreement signed with the Managing Company on 6 April 2004. Pursuant to it, the Banco
de Portugal shall:
a)
pay retirement and survivors pensions to the respective beneficiaries on behalf and
for the account of the Managing Company;
52
Sociedade Gestora do Fundo de Pensões do Banco de Portugal, S.A.
2006 Report and Financial Statements
b)
c)
withhold at source the contributions and taxes due for subsequent delivery to the
competent authorities, and meet the corresponding tax reporting obligations;
settle through an offsetting procedure the amounts paid and the contributions due
to the Pension Fund related to the Bank’s employees, under the terms of subparagraph a).
The Banco de Portugal has complied and will continue to comply with the agreement
referred to as long as it remains in force. Within the scope of this agreement the Bank will
assume all inherent responsibilities.
17.
Contingent liabilities
a)
Edifício Libersil
Judicial proceedings continue with regard to four actions brought before Court by
four former shopkeepers against the Managing Company. According to the lawyers’
view, it is unlikely that the Company will be sentenced.
b)
Edifício Armazéns de Alverca
There is a judicial proceeding in which a third party claims the amount of
€1,771,165, invoking that the Pension Fund assumed the obligation to pay this
amount in the deed of purchase and sale of the property, signed on 1 August 1998.
These buildings were resold to the former owner on 31 July 2001, after detection of
some structural, geotechnical and construction problems. These gave rise to
additional costs paid by the Pension Fund, to the amount of €2,507,646, for which
the Managing Company claims the right to compensation.
In 2004 the Managing Company presented to Court a bank guarantee to the amount
demanded by the party involved in the building sale, as a guarantee for this alleged
responsibility, with the purpose of suspending execution.
Given that it was not possible to predict which responsibilities the Court would
decide to assign, a provision was set up, during the fiscal year 2005, to the amount
of €1,771,165.
At the end of 2006, the provision set up for this purpose was cancelled, after the
Lisbon Court of Appeal dismissed the claim for damages brought by the
complainant.
On 12 January 2007, following a judgment of the Supreme Court of Lisbon, which
confirmed the previous decision, the proceeding was brought to an end given that it
was not possible to appeal the judgment. For this reason, applicable legal steps have
been taken in order to return and cancel the above-mentioned bank guarantee.
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Sociedade Gestora do Fundo de Pensões do Banco de Portugal, S.A.
2006 Report and Financial Statements
c)
Avenida 5 de Outubro - Edifício Pinta
The owner of the building next to Edifício Pinta brought an action before the Court
against the Pension Fund, to the amount of €433,491, as compensation for the
damages caused to his building when Edifício Pinta was constructed.
In 2006 the complainant withdrew the claim for damages, and the Pension Fund did
not incur any costs.
d)
Future subscription of “Office Park Expo” real-estate based fund units
The Pension Fund subscribed investment units in the real estate fund “Office Park
Expo”, to the total amount of €26,974,860.
Under the terms of the Partnership Agreement, the total investment may amount to
€50,000,000.
54
Sociedade Gestora do Fundo de Pensões do Banco de Portugal, S.A.
2006 Report and Financial Statements
Certification of accounts
55
Sociedade Gestora do Fundo de Pensões do Banco de Portugal, S.A.
ERNST & YOUNG
Ernst & Young Audit & Associados-SROC, S.A.
Edifício República
Avenida da República, 90 – 6.º
1600-206 Lisboa
Portugal
Tel.: (351) 217 912 000
Fax: (351) 217 957 586
CERTIFICATION OF ACCOUNTS
Introduction
1. We have audited the financial statements of FUNDO DE PENSÕES DO
BANCO DE PORTUGAL, S.A. (Fund), which comprise the balance sheet as
at 31 December 2006 showing total investments of €1.208.550.035 and a fund
value to the same amount, including the profit for the year, to an amount of
€27.023.372 and the Profit and Loss Account for the year then ended, as well
as the corresponding Annex.
Responsibility
2. The Board of Directors of Sociedade Gestora do Fundo de Pensões do Banco
de Portugal is responsible for the preparation and fair presentation of the
financial statements, results and turnover. This responsibility also includes
applying appropriate accounting policies and criteria and maintaining an
adequate internal control system.
3. Our responsibility is to express an independent professional opinion based on
our audit to those financial statements.
Scope
4. We conducted our audit in accordance with the Examination/Audit Technical
Rules and Guidelines of Ordem dos Revisores Oficiais de Contas (Portuguese
Statutory Auditor Institute), which require that we plan and perform our audit
to obtain reasonable assurance that the financial statements are free from
material misstatement. For this, the audit included:
•
•
examining, on a test basis, evidence about the amounts and disclosures in the
financial statements and an assessment of estimates used in their preparation,
which were based on judgements and criteria defined by the Board of
Directors of Sociedade Gestora do Fundo de Pensões do Banco de Portugal;
assessing whether the accounting policies adopted and their disclosure are
appropriate in the circumstances;
•
•
assessing whether accounts are prepared on a going concern basis; and
evaluating the overall adequacy of the presentation of information in the
financial statements.
5. Our audit also assessed the concordance between the financial information
included in the management report and financial statements.
6. We believe that our audit provides a sufficient basis for our opinion.
Opinion
7. In our opinion, the financial statements give a true and fair view in all material
respects of the financial position of Fundo de Pensões do Banco de Portugal,
S.A. as at 31 December 2006 and of its profit, results and turnover for the year
then ended, in accordance with the accounting principles generally accepted in
Portugal.
Lisbon, 19 March 2007
ERNST & YOUNG AUDIT & ASSOCIADOS, SROC, S.A.
Sociedade de Revisores Oficiais de Contas (n.º 178)
Represented by:
Ana Rosa Ribeiro Salcedas Monte Pinto (ROC n.º 1230)
2006 Report and Financial Statements
Actuarial valuation
58
Sociedade Gestora do Fundo de Pensões do Banco de Portugal, S.A.
2006 Report and Financial Statements
ACTUARIAL RESULTS OF THE PENSION FUND OF THE BANCO DE
PORTUGAL AS AT 31 DECEMBER 2006
1. INTRODUCTION
2. POPULATION DATA
3. ACTUARIAL AND FINANCIAL ASSUMPTIONS
4. ACTUARIAL RESULTS AND STATUTORY MINIMUM FUNDING LEVELS
Lisbon, 21 February 2007
Actuary,
Rita Ornelas Marques
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Sociedade Gestora do Fundo de Pensões do Banco de Portugal, S.A.
2006 Report and Financial Statements
INTRODUCTION
The funding target of the Pension Fund, consisting in the full coverage of liabilities relating to
pensions in payment and the funding of 95% of past service liabilities of active staff, was met by
100.8%.
Between 31 December 2005 and 31 December 2006 the Pension Fund’s liabilities rose by €18.8
million, considering the actuarial and financial assumptions defined in section 3.
The values shown in section 4 comply with the minimum regulatory levels established in Notice
of the Banco de Portugal No 4/2005 (111.8%) and the minimum solvency ratio defined by the
Instituto de Seguros de Portugal (125.3%).1
For the calculation of the value of liabilities use was made of the Projected Unit Credit Cost
Method.
POPULATION DATA
Total individuals covered by the Pension Fund
Retired staff
Pensioners
Active staff
1
3929
1734
486
1709
The verification of the minimum funding levels is made at end-year values.
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Sociedade Gestora do Fundo de Pensões do Banco de Portugal, S.A.
2006 Report and Financial Statements
ACTUARIAL AND FINANCIAL ASSUMPTIONS
3.1. FOR THE ACTUARIAL VALUATION
Identification
Assumption
Assumptions resulting from the Plan
Date of seniority pension/early retirement
(a)
1st occurrence
- Plan III
- Other plans and schemes
65 years
Pension payments per year
14
Wage payments per year
14
Identification
Assumption
Actuarial and technical assumptions
TV 88/90 (b)
1978 - S.O.A. Trans. Male (US)
Mortality table
Disability table
Turnover table
- Plan III
- Other plans and schemes
Wage growth rate
- Plan III
- Other plans and schemes
Pensions increase
Wage scale increase
National minimum wage increase
Wage rate of increase 2004/2005
- Plan III
- Other plans and schemes
Discount rate
(c)
Discount rate - portability
National minimum wage in the following year
Share of married members
- Plan III
- Other plans and schemes
Age difference between members and spouses
- Plan III
- Other plans and schemes
(a)
-----T-1 Crocker Sarason (US)
2.228%
3.228%
2.228%
2.228%
2.228%
2.500%
2.500%
4.517%
4.500%
403.00 €
real situation
80%
real situation
3 (male individuals being the oldest)
Consider the 1st occurrence among the following:
- 65 years of age; 35 years of service or 95 points - for the Plan III members who are employees of Banco de Portugal;
- (Estimated) term of office date - for the Plan III members who are not employees of Banco de Portugal.
(b)
In the calculation of transfers - due to actual dismissals/hirings - the TV 73/77 mortality table continued to be used,
given that this table is considered to be inherent to the calculation of the minimum solvency ratio at the expected transfer date.
(c)
Discount rate in the period after dismissal from Banco de Portugal for the purpose of calculating liabilities relating to the portability of rights inherent to
potential and actual dismissals/hirings (transfers). Discount rate used for the calculation of the minimum solvency ratio.
The assumptions used in the actuarial valuation comply with the principle set forth in IAS 19.
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Sociedade Gestora do Fundo de Pensões do Banco de Portugal, S.A.
2006 Report and Financial Statements
3.2. FOR THE CALCULATION OF THE ISP MINIMUM SOLVENCY RATIO
Identification
Assumption
Assumptions resulting from the Plan
Date of seniority pension/early retirement
- Plan III
- Other plans and schemes
Pension payments per year
Wage payments for year
1st occurrence(a)
65 years
14
14
Actuarial and technical assumptions
Mortality table
Disability table
Wage growth rate
- Plan III
- Other plans and schemes
Pensions increase
Wage scale increase
National minimum wage increase
Wage rate of increase 2004/2005
- Plan III
- Other plans and schemes
Discount rate
(b)
Discount rate - portability
National minimum wage in the following year
Share of married members
- Plan III
- Other plans and schemes
Age difference between members and spouses
- Plan III
- Other plans and schemes
(a)
TV 73/77
1978 - S.O.A. Trans. Male (US)
0.000%
0.000%
2.228%
0.000%
0.000%
0.000%
0.000%
4.500%
4.500%
403.00 €
real situation
80%
real situation
3 (male individuals being the oldest)
Consider the 1st occurrence among the following:
- 65 years of age; 35 years of service or 95 points - for the Plan III members who are employees of Banco de Portugal;
- (Estimated) term of office date - for the Plan III members who are not employees of Banco de Portugal.
(b)
Discount rate in the period after dismissal from Banco de Portugal for the purpose of calculating liabilities relating to the portability of rights inherent to
actual dismissals/hirings (transfers). Discount rate used for the calculation of the minimum solvency ratio.
62
Sociedade Gestora do Fundo de Pensões do Banco de Portugal, S.A.
2006 Report and Financial Statements
ACTUARIAL RESULTS AND STATUTORY MINIMUM FUNDING LEVELS
Past service liabilities
1,226,238,773
Retired members and pensioners
691,158,181
Active staff members
535,080,592
Funding target
1,199,484,744
Minimum compulsory PSL - Notice of Banco de Portugal No 4/2005
1,081,453,102
Pension Fund value as at 31 December 2006
1,208,550,035
Funding level
Overall
98.6%
Funding target
100.8%
Minimum level set out in
Notice of Banco de Portugal
No 4/2005
111.8%
Minimum solvency value (ISP)
964,546,285
Funding target of the minimum solvency value
125.3%
63
Sociedade Gestora do Fundo de Pensões do Banco de Portugal, S.A.