Rio de Janeiro, December 18, 2018 – Petróleo Brasileiro S.A. – Petrobras reports that its Board of Directors approved in a meeting held today, to submit for the analysis of the Secretariat for the Coordination and Governance of State-Owned Enterprises (“SEST”) the proposal for a new pension plan called Petros 3 Plan (“PP3”) set up as defined contribution (“DC”), to be offered as voluntary migration to participants of the Renegotiated and Non-Renegotiated Petrobras System Petros plans (“BD Plans”).
After the assessment by SEST, and in the event of a favorable opinion from that body, the proposal will be submitted by the Petrobras Foundation for Social Security (“Petros”) for approval from the National Superintendence of Supplementary Pensions (“PREVIC”). In the event of approval by PREVIC, the option to join PP3 will be offered to participants of the BD Plans.
Petros had already implemented the Deficit Equating Plan (“PED”) whose purpose was to equate the total deficit assessed in 2015, adjusted for 2017, as described in the Material Fact disclosed on 9/12/2017. However, despite the PED, the BD Plans have featured new deficits, which increases the probability of new equating at the end of 2018.
Given this scenario, Petros conducted studies that showed the existence of risks to the solvency and liquidity of the BD Plan in the medium term and the implementation of new equating plans. Thus, alternatives to mitigate these risks were evaluated, resulting in the choice of a new plan – PP3.
Among other features, the new plan will have full pay parity (50%) of the sponsor, with maximum contribution rate of 8.5%; possibility of redeeming 15% of individual account funds at the time of migration or upon retirement; and benefit paid monthly and recalculated annually based on the period chosen by the participant (indefinitely, between 10 and 45 years, or based on a percentage of its funds).
Considering that PP3 still has to be approved by SEST and PREVIC, and that it is not possible to estimate the number of participants who will choose to migrate, the impact of the proposal on the company’s financial statements and cash flow will only be known after the completion of the migration process.
The PP3 proposal is in line with the Resolution of the Interministerial Commission on Corporate Governance and Administration of Corporate Stake of the Federal Government no. 25/2018, which instructs that new supplementary pension plans offered by the federal state-owned companies are structured exclusively as DC.
Petrobras will continue to make the best efforts to identify alternatives that can be offered to participants, provided that they are effective in mitigating the risks presented in the BD Plans and are aligned to the new Resolution.
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