This excerpt taken from the PBR 6-K filed Oct 23, 2006.
Approval of Petros-2 Plan
(Rio de Janeiro, October 20, 2006). PETRÓLEO BRASILEIRO S/A - PETROBRAS, [Bovespa: PETR3/PETR4, NYSE: PBR/PBRA, Latibex: XPBR/XPBRA, BCBA: APBR/APBRA], a Brazilian international energy company, announces to shareholders that at a meeting held today, the Board of Directors approved the new pension plan denominated Petros - 2 covering the Companys 16 thousand (August 2006) employees hired since August 2002 and not enjoying the benefits of a company pension plan. The key points of the plan meet the terms agreed in the Collective Labor Agreements since 2004 and this plan will now be submitted for approval to the regulatory authorities and subsequently presented to the employees for their consideration.
In August 2002, the company decided to cease admitting newly hired employees as members of the Petros Plan. Since then, employees hired by the company have been covered by a group life insurance scheme.
The Petros - 2 Plan is characterized as a Variable Contribution Plan as described in the Resolution of the Management Council on Complementary Social Security Programs CGPC, since it has the characteristics of a Defined Contribution Plan (capitalization in an Individual Account and a pension based on the balance in this account) as well as those of a Defined Benefit Plan (option to receive a Lifetime Income and Risk Benefits with coverage for illness, incapacity and death).
The new Petros 2 Plan will involve equal contributions from the company and employees, varying at the employees option between a base of 6% of the Contribution Wage and a maximum of 8% to 11% according to age group. The purpose of the base is to provide the required funds to pay a minimum retirement pension, as well as covering the Plans Risk Benefits and administrative expenses.
The Petros - 2 Plan is in legal compliance with the principles of deferred proportional benefit, portability, redemption and self-sponsorship for closed entity plans as established by the CGPC of the Ministry for Social Security and Welfare.