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Stichting Shell Pensioenfonds mei 2010VERTROUWELIJK
Shell Pension Fund Netherlands
19th May 2010
Relationship: Employer - Employees – Pension Fund
Stichting Shell Pensioenfonds
Employer / admitted companies
StichtingShell Pensioenfonds
Employee
Pension agreement in (collective) employment contractExecution agreement
Trust deed / Regulations
Stichting Shell Pensioenfonds 3MEI 2010VERTROUWELIJK
Pension Fund organization
Shell Pension Fund Foundation (SSPF)Pension arrangements of Group companies in the NetherlandsBoard of AdministratorsParticipants’ Council
Shell Pension Fund Management (SPN) - 20 staffSPN has been appointed as Director, administers the pension arrangements and advises the board of SSPF and the employer Supervisory Board
Shell Asset Management Company (SAMCo) - 120 staff SAMCo has been appointed as the asset manager for SSPFSupervisory Board
Stichting Shell Pensioenfonds 4MEI 2010VERTROUWELIJK
SSPF Board of administrators (BoA)
Parity representation of employees and employers
Four representatives of the member companies
Four representatives of the employees
Members BoA appointed by SPNV (employee representatives on recommendation of the Central Staff Council)
The BoA shall address the interests of all Pension Fund members and all other interested parties and ensure that they can feel represented in a balanced manner.
Stichting Shell Pensioenfonds 5MEI 2010VERTROUWELIJK
Participants Council (PC)
The PC advises the BoA on important matters with regard to the Fund, either on request or on their own initiative.
Twelve members, appointed by Shell Petroleum NV
Representatives of fund members in active service are nominated by the Central Staff Council of Shell in the Netherlands
Representatives of retired fund members (including fund members with an early deferred pension) are nominated by the Shell Pensioners Club (VOEKS)
Composition as per 1/5/2007: 4 active participants, 8 pensioners
Stichting Shell Pensioenfonds 6MEI 2010VERTROUWELIJK
Additional governance requirements from 1st January 2008
Based on principles of good Pension Fund Governance agreed between social partners and the pensions sector
Transparency and accountability key issues
2 additional bodies were instituted: - Tripartite Accountability council: employees, employer and pensioners - Internal Supervisory committee: independent experts
Stichting Shell Pensioenfonds 7MEI 2010VERTROUWELIJK
SSPF key data
Participantsactive 11.226(15% outside Netherlands)deferred 7.010(13% outside Netherlands)pensioners 19.300( 7% outside Netherlands)
Admitted companiesNetherlands 23Abroad 170 in 57 countries
Pension schemesShell 12Billiton 8
Liabilities € 12,500 billionAssets € 15,400 billion
Data ultimo 2009
Stichting Shell Pensioenfonds 8MEI 2010VERTROUWELIJK
Funding principles and asset management
Based on Dutch Solvency regime
High commitment from Employer/sponsor
Sponsor provides high level Pension fund management guidelines and risk and funding targets
Guarantee from sponsor in case of insolvency
Advanced ALM model and strategic asset allocation
High equity ratio and international diversification in portfolio
In company professional asset management
Stichting Shell Pensioenfonds 9MEI 2010VERTROUWELIJK
Pension as important benefit
Shell differentiates pay for performance, ‘benefits’ and so called ‘facilities’
Shell focuses more and more on reward for achievement (performance based pay)
‘Benefits’ are part of Employee Value Propostion: “to recruit and retain staff”. Retirement benefits are included in this EVP.
‘Facilities’ provide the employee comfort, but are not included in the employee’s decision on joining, staying or leaving the company.
Stichting Shell Pensioenfonds 10MEI 2010VERTROUWELIJK
The Shell scheme in brief
Target retirement age 65
Actual retirement age: choice of any age between 55 and 65 and between 65 and 70 with employer consent
Old age pension based on final salary
Partner pension is 70% of old age pension
Orphan pension is 14% of total partner pension
Incapacity pension: percentage of salary
Flexibility in benefits
Benefit indexation ambition conditional on financial condition fund
Employee contribution: minimum 2% of salary, 8% on salary above € 75.000
Employer contribution for 2007: 31,6 % of total salary bill
Stichting Shell Pensioenfonds 11MEI 2010VERTROUWELIJK
Old age pension (OAP)
Pension formula: OAP = pension years x pension base x accrual percentage
Accrual percentage:
1.1 % of pension base up to € 28,506
2 .0 % of pension base between € 28,506 and € 63,659
1,75 % of pension base between € 63,659 and € 106,578
1,5 % of pension base above € 106,578
Stichting Shell Pensioenfonds 12MEI 2010VERTROUWELIJK
Partner pension
Life long partner pension: 70% of old age pension
In case of death in service, projected years between death and age 65 are included in calculation
Applies to:- married partners- legally registered partners - cohabitating partners registered with the pension fund
Supplementary partner pension for partners under age 65 of 1.6% of € 28,506 for each pension accrual year: compensation for not qualifying for State widow benefit and not yet receiving State old age benefit:
Stichting Shell Pensioenfonds 13MEI 2010VERTROUWELIJK
Orphan pension
Orphan pension: 14% of total partner pension
Children under age 18 qualify
If in full time education up to age 24
If both parents have died: orphans pension is doubled
Stichting Shell Pensioenfonds 14MEI 2010VERTROUWELIJK
Incapacity pension
Granted if earning capacity is less than 20%
Assessment is made by medical doctor appointed by the Board of Administrators
Benefit: 100% of salary up to € 63,659 70% of salary above € 63,659
Benefit is paid until reaching age 65
Pension accrual continues
At reaching age 65 old age pension is based on number of years in active service + number of years in receipt of incapacity pension