Report and Accounts
2010
Fundo de Pensões do Banco de Portugal – Contribuição Definida
Fundo de Pensões do Banco de Portugal – Contribuição Definida 1
TABLE OF CONTENTS
I.
Management Report
1. Foreword
2. Investment Policy
2.1.
Objectives
2.2.
Principles and Restrictions
2.3.
Initial Stage
3. Closing Remarks
II. Statement of Assets and Liabilities and Income and Expenditure Statement
III. Notes to the Statement of Assets and Liabilities and Income and Expenditure
Statement
IV. Certification of the Financial Statements
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Fundo de Pensões do Banco de Portugal – Contribuição Definida 2
MANAGEMENT REPORT
1.
FOREWORD
The changes to the Company-Level Agreements of Banco de Portugal (Acordos de Empresa),
published on 22 June 2009 in the Work and Labour Bulletin (Boletim do Trabalho e Emprego),
provided for the setting up of a Defined-Contribution Supplementary Plan, which will be
funded by contributions of the Banco de Portugal and the employees who started working in
the banking sector after 3 March 2009 and who are covered by the general Social Security
Scheme, pursuant to Degree Law No 54/2009 of 2 March. Adherence to the Plan, foreseen in
the Company-Level Agreements, is considered to be an option for the employee and mandatory
to the Banco de Portugal, given the employee’s choice to join.
Both the Banco de Portugal and the employee must contribute with 1.5 per cent of the effective
monthly wage, including the amount of holiday pay and Christmas bonus.
The employee must indicate the pension fund in which these contributions are invested. This
choice, which may be changed annually, must comply with the conditions set out in Clause 140
of the Company-Level Agreements.
The “Pension Fund of the Banco de Portugal -Defined Contribution” (FPCD) is a funding
vehicle for the Defined-Contribution Pension Fund Supplementary Plan , provided for in the
Company-Level Agreements, formally known as “Plano de Contribuição Definida – AE”,
managed by the Sociedade Gestora dos Fundos de Pensões do Banco de Portugal, S.A. (Pension
Funds Managing Company).
This is a closed fund governed according to its deed of constitution, signed on 22 December
2010 and whose effects date back to 23 June 2009.
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2. INVESTMENT POLICY
2.1. Objectives
The FPCD’s investment policy aims not only at limiting the risk of a reduction in the
participants’ purchasing power, but also at maximizing the real return of the funds under
management, taking into account the likely time-frame in which funds can be claimed.
2.2. Principles and restrictions
The recommended asset allocation for each participant is based on a life cycle approach, and on
the time-frame in which payment is due, bearing in mind the expected date of retirement and
the likelihood of the legal conditions of statutory early retirement being met. Alternatively,
participants may choose a profile other than the one recommended.
To pursue these goals it is crucial to take into account the need to ensure at all times:
•
The maintenance of an appropriate liquidity level to address uncertainty over the
time to maturity, the possibility of the funds being migrated to another investment
profile or transferred to another pension fund managing company;
•
The limitation of the risks affecting the FPCD’s assets value through the adoption of
prudential criteria for the selection of instruments and institutions eligible for
investment;
•
The diversification of the investments, so as to avoid risk accumulation, as well as an
excessive concentration in any asset, issuer or group of companies.
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2.3. Initial stage
In the initial stage, the investment policy assumes a simplified form, materialized in a single
investment portfolio composed of Euro Area sovereign debt, which complies with the
principles and prudential rules applicable to the investments of the Pension Funds.
FPCD’s initial assets were raised through a cash contribution made by the Banco de Portugal,
which set up a Sponsor Reserve Account (SRA).
This account, set to provide the necessary scale for the portfolio management, will gradually be
reduced over time, by debits of regular contributions to the FPCD, both from the Banco de
Portugal and the participants (through a monthly debit in the salaries), and will be credited with
the returns generated from its management.
As at 31 December 2010, the portfolio value of the Defined Contribution Pension Fund
amounted to 4,997 thousand euros, of which 4,923 thousand euros corresponded to the amount
associated with the SRA and 74 thousand euros to the total value of individual accounts
belonging to the Fund’s participants.
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Fundo de Pensões do Banco de Portugal – Contribuição Definida 5
3. CLOSING REMARKS
The Board of Directors would like to conclude the 2010 Report and Accounts by thanking the
Banco de Portugal for its confidence and cooperation.
A word of recognition is also due to the Instituto de Seguros de Portugal for the way it
monitored the business of Sociedade Gestora dos Fundos de Pensões do Banco de Portugal,
S.A..
Finally, we would like to highlight the high level of professionalism and dedication of all the
staff of the Sociedade Gestora.
Lisbon, 28 February 2011
António Manuel Martins Pereira Marta
Vítor Manuel da Silva Rodrigues Pessoa
Helena Maria de Almeida Martins Adegas
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FUNDO DE PENSÕES
DO BANCO DE PORTUGAL
CONTRIBUIÇÃO DEFINIDA
Statement of Assets and Liabilities and
Income and Expenditure Statement
Notes to the Statement of Assets and Liabilities
and Income and Expenditure Statement
Certification of the Financial Statements
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STATEMENT OF ASSETS AND LIABILITIES AS AT 31 DECEMBER 2010
Notes
31-Dec-10
APPLICATIONS OF THE FUND
Securities
Cash and bank deposits
4
5
Total applications of the fund
4,991,029.25
5,978.56
4,997,007.81
VALUE OF THE FUND
Initial contribution to the Sponsor Reserve Account
Contributions under the Company-Level Agreement (clause 140)
Profit (loss) and accumulated contributions of the year
Total value of the fund
VALUE BY PARTICIPATION UNIT
The Accountant
Paulo José Antunes Jorge
6
6
6
4,926,395.44
73,604.56
-2,992.19
4,997,007.81
1.00
The Board of Directors
António Manuel Martins Pereira Marta
Vitor Manuel da Silva Rodrigues Pessoa
Helena Maria de Almeida Martins Adegas
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INCOME AND EXPENDITURE STATEMENT
Notes
31-Dec-10
INCREASES IN THE VALUE OF THE FUND
Initial contribution to the Sponsor Reserve Account
Contributions under the Company-Level Agreement (clause 140)
6
6
Total increases of the fund
4,926,395.44
73,604.56
5,000,000.00
DECREASES IN THE VALUE OF THE FUND
7
Capital losses
Total decreases of the fund
PROFIT (LOSS)
The Accountant
Paulo José Antunes Jorge
2,992.19
2,992.19
4,997,007.81
The Board of Directors
António Manuel Martins Pereira Marta
Vitor Manuel da Silva Rodrigues Pessoa
Helena Maria de Almeida Martins Adegas
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CASH FLOWS STATEMENT
31-Dec-10
CASH FLOWS FROM OPERATING ACTIVITIES
Contributions
Initial contribution to the Sponsor Reserve Account
Contributions under the Company-Level Agreement (clause 140)
4,926,395.44
73,604.56
Pensions, capital and matured single premiums
Remunerations
NET CASH FLOWS FROM OPERATING ACTIVITIES
Proceeds
Payments
Purchase of Investments
4,994,021.44
NET CASH FLOWS FROM INVESTING ACTIVITIES
Change in cash and cash equivalents
Effect of exchange rate differences
Cash and cash equivalents at beginning of period
Cash and cash equivalents at end of period
5,978.56
0.00
0.00
5,978.56
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Fundo de Pensões do Banco de Portugal – Contribuição Definida 10
NOTES TO THE STATEMENT OF ASSETS AND LIABILITIES AND THE
INCOME AND EXPENDITURE STATEMENT
1.
CREATION AND BUSINESS
The Defined Contribution Pension Fund was created by the Banco de Portugal, in its capacity as
Founder Sponsor, and by the Sociedade Gestora dos Fundos de Pensões do Banco de Portugal,
S.A., in its capacity as managing company, by deed executed on 22 December 2010.
The Banco de Portugal Defined Contribution Pension Fund is composed of autonomous assets
exclusively earmarked for:
a) The funding of pension plans foreseen in the agreement;
b) The purchase of annuities, which ensure the benefits resulting from the plans in which
they are covered;
c) The payment of capital according to what is foreseen in the pension plans.
It is a closed fund, whose members are:
a) The employees of the Banco de Portugal, covered by the general Social Security Scheme,
pursuant to Degree Law No 54/2009 of 2 March, who choose to join the
complementary pension plans provided for in the collective labour agreement;
b) Any employee of the Banco de Portugal, who joins the supplementary plan, regardless of
the Social Security Scheme they integrate.
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The Fund’s beneficiaries are individuals entitled to the cash benefits established in the chosen
pension fund plan, defined in the deed of constitution.
The Fund’s assets are represented by whole or fractional participation units of each of the
available portfolios, to which bid-ask quotes or prices are set.
The Banco de Portugal Defined Contribution Pension Fund, which was initially created by one
single portfolio, has been active since 27 December 2010.
2.
FINANTIAL STATEMENTS SUBMITTED
The attached accounts were prepared in accordance with the accounting records of the
Sociedade Gestora dos Fundos de Pensões do Banco de Portugal, S.A..
These accounts summarise the transactions and net assets of the Pension Fund.
3.
ACCOUNTING PRINCIPLES, METHODS AND ASSUMPTIONS OF ASSETS
VALUATION
a) General
The financial statements were prepared in accordance with the accounting principles
generally accepted in Portugal and in accordance with the rules issued by the Instituto de
Seguros de Portugal (The Portuguese Insurance and Pension Funds Supervisory
Authority).
The accounts were prepared under the historical cost convention (modified to include the
present value principle for valuing the investment in credit securities) and on a goingconcern basis, pursuant to the fundamental accounting principles of consistency,
prudence and accrual.
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b) Securities
Financial investments in the portfolio on 31 December 2010 are marked to market in
accordance with Standard No 9/2007 of 28 June of the Instituto de Seguros de Portugal.
Pursuant to this standard, an economic methodology adapted to the type of financial asset
in question is applied to securities whose listing price significantly departs from their fair
market value.
Pursuant to the provisions laid down in the applicable legislation, the portfolio of
marketable securities, with low liquidity in regulated markets and chiefly traded over the
counter, is valued by using prices made available by the main providers of financial
information.
The difference between the fair value of the securities and their respective acquisition cost
is recorded under either capital gains or losses in the Income and Expenditure Statement.
The difference between the proceeds from the sale of securities and their book value is
also recorded under the same headings.
c) Contributions
The Fund’s initial assets were raised through a cash contribution made by the Banco de
Portugal, which was used to set up a Sponsor Reserve Account (SRA), under the terms of
the contract that also defines the way in which the SRA is used (see Note 6).
d) Income
Income from securities is recorded in the period to which they refer, save for dividends,
which are only recognised upon actual receipt.
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e) Fees
Fees are booked under the corresponding heading in the Income and Expenditure
Statement in the period to which they refer, regardless of their date of payment. Fees as
yet unpaid are booked against Accrued Costs and prepaid fees are booked under Deferred
Costs.
f) Taxation
The Pension Funds are exempt from Corporate Income Tax and Property Tax, in
accordance with the Tax Benefit Act.
4.
SECURITIES
EUR
31-Dec-10
Acquisition Cost
Adjustments
Market Value
Fixed-Income Securities-Bonds
Sovereign debt
4,994,021.44
-2,992.19
4,991,029.25
4,994,021.44
-2,992.19
4,991,029.25
The adjustments correspond to unrealised capital gains or losses calculated as the difference
between the market value and the historical acquisition cost.
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5.
CASH AND BANK DEPOSITS
This heading is broken down as follows:
EUR
31-Dec-10
Cash
Demand deposits
Term deposits
0.00
5,978.56
0.00
5,978.56
6.
CONTRIBUTIONS
Current contributions include, in addition to the SRA component, contributions made by the
employees of the Banco de Portugal, in the conditions laid down in their corresponding pension
plans.
EUR
31-Dec-10
Initial contribution to the Sponsor Reserve Account
4,926,395.44
Contributions under the Company-Level Agreement
( clause 140)
73,604.56
5,000,000.00
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7.
CAPITAL GAINS AND LOSSES
This heading includes the following types of income:
EUR
31-Dec-10
Unrealised capital gains and losses
Securities
Capital gains
0.00
Capital losses
2,992.19
-2,992.19
Realised capital gains and losses
Securities
Capital gains
0.00
Capital losses
0.00
0.00
Total capital gains
Total capital losses
Net Value
8.
0.00
2,992.19
-2,992.19
CLOSING REMARK
The Financial Statement is subject to requirements corresponding to Standard 7/2010-R of 4
July of the Instituto de Seguros de Portugal. This Standard defines the elements which must be
published in the Financial Statement, so as to adapt the given information to the specific
characteristics of each entity. Thus, certain elements have not been included, given the short
existence and activity of the Banco de Portugal Defined Contribution Pension Fund in 2010.
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CERTIFICATION OF THE FINANCIAL STATEMENTS
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Ernst & Young
ERNST & YOUNG
Audit & Associados – SROC, S.A.
Avenida da República, 90, 6th floor
1600-206 Lisbon
Portugal
Tel: +351 217 912 000
Fax: +351 217 957 586
www.ey.com
Legal Certification of Accounts
Introduction
1. We have audited the attached financial statements of Fundo de Pensões do Banco de
Portugal – Contribuição Definida “(Fund)”, which comprise the Statement of Assets and
Liabilities as at 31 December 2010, which shows total assets of 4,997,007.81 Euros and a
value of the fund of the same amount, including negative net profits of 2,992.19 Euros, the
Income and Expenditure Statement and the Cash Flows Statement for the year then ended,
as well as the corresponding Notes.
Responsibilities
2. The Board of Directors of the Sociedade Gestora dos Fundos de Pensões do Banco de
Portugal (“Sociedade Gestora”) is responsible for preparing financial statements that give a
true and fair view of the assets and liabilities of the Fund, the results of its operations and
cash flows, as well as for adopting appropriate accounting policies and criteria and
maintaining an appropriate internal control system.
3. We are responsible for expressing an independent and professional opinion on the basis of
our audit of the aforementioned financial statements.
Scope
4. We conducted our audit in accordance with the Standards and Technical Recommendations
issued by the Institute of Statutory Auditors, which require that we plan and execute with a
view to obtaining reasonable assurance whether the financial statements are free from
material misstatement. Accordingly, the aforementioned audit included:
__________________________________________________________________________
Limited liability company * Share capital 1,105,000 euros * Registered in the Statutory Auditors’ Association under no. 178 * Registered in the CMVM under no.
9011 * Taxpayer no. 505 988 283 * Registered in the Lisbon Commercial Registry under the same number * A member of Ernst & Young Global Limited
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Fundo de Pensões do Banco de Portugal – Contribuição Definida 18
− examination, on a test basis, of documentation supporting the amounts and disclosures in
the financial statements and an evaluation of the estimates, based on the judgements and
criteria defined by the Board of Directors of Sociedade Gestora dos Fundos de Pensões
do Banco de Portugal, used in the preparation of the financial statements;
− an assessment as to whether the accounting policies and the disclosures adopted are
appropriate, as applicable;
− assessing that the accounts were prepared on a going-concern basis; and
− an overall assessment of the appropriateness of the financial statements.
5. Our audit also covered the verification that the financial information included in the
Management Report is consistent with the financial statements.
6. We believe that the audit carried out provides a reasonable basis for expressing our audit
opinion.
Opinion
7. In our opinion, the aforementioned financial statements present fairly, in all material
respects, of the financial position of the Fundo de Pensões do Banco de Portugal –
Contribuição Definida as at 31 December 2010, the results of its operations and cash flows
for the financial year then ended, in accordance with accounting principles generally
accepted in Portugal for the Pension Funds industry. (Regulatory Standard No 9/2007-R of
28 June and No 7/20010-R of 4 July).
Lisbon, 15 March 2011
Ernst & Young Audit & Associados – SROC, S.A.
Firm of Statutory Auditors (No 178)
Represented by:
[signature]
Ana Rosa Ribeiro Salcedas Montes Pinto (ROC No 1230)
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