This excerpt taken from the PBR 6-K filed Aug 19, 2005.
New plan of benefits
In 2001, a mixed private pension plan was created - PETROBRAS VIDA, intended for the current and new employees, which has been on hold since that year though, as a result of preliminary injunctions on petition filed for writ of mandamus by unions. A sentence was handed down in 2004 on the merits of the legal action, declaring null the act of the MPAS Private Pension Plan Secretary that had approved the new plan and declaring invalid any changes to the Petros Plan on the grounds of that approval. The action is underway at the lower courts.
In June 2005, the Judge of the 7th Federal Court of Rio de Janeiro determined that PETROBRAS and PETROS should be summoned to "provide proof of their employer contributions to PETROS PLAN for all employees hired after August 2002, or alternatively to offset the actuarial deficit presented in the balance sheets under penalty for pecuniary liability, calculated on a daily basis, to be arbitrated.
In view of this ruling, PETROS filed a petition informing the Court that PETROBRAS had made a contribution to offset the actuarial deficit arrived at upon closing of the Plan. On the same date, PETROS filed an appeal of decision requesting apology and full retraction of the allegations made by the Judge due to the information that was furnished.
PETROBRAS, in relation to the performance of the contribution, based itself on the information furnished by PETROS, and also filed an appeal of decision for it to be reviewed. The Union, by which the proceeding had been started, filed its contestation to said appeal of decision, and the court records are currently with the reporting judge for a decision to be handed down.
At June 30, 2005, the balance of advances for the pension plan recorded by PETROBRAS amounted to R$ 1.178.435 thousand (R$ 1.258.435 thousand in March 31, 2005). The impact of joining the new plan and the cost of the benefits stipulated in the new plan will be valued according to the standards established in CVM Resolution No. 371/00 and will only be computed and recognized in the accounts when the litigation has been resolved.
The PETROS Plan is closed to new employees of the PETROBRAS System, and the Company took out a group life insurance to cover all employees hired subsequently. This insurance will be in force until a new private pension plan is not implemented.
In 2003, PETROBRAS set up a work group composed of representatives from the General Union of Oil Workers FUP in order to perform technical evaluations of alternative private pension plan for the Company, including the analysis of agreed upon ways to settle the actuarial deficit proposals negotiated for strengthen of economics finance sustainability, viability analysis of attending the specific requests of such representative entities and to definitely equate the actuarial balance of the actual Petros Plan.