For some weeks now, the state of affairs on the stock markets and the implications of the current financial crisis for banks, insurance companies and other investors – including pension funds – have been extensively reported in the media. What does all this mean for the Dutch Shell Pension Fund, for the pension contributions you pay or for the pension you receive? |
Policy
It is the policy of the Pension Fund to ensure that the pensions of all participants, former participants and pension beneficiaries can be paid in both the short term and the long term. It is taken into account that there are good times when the Fund’s assets grow and extra reserves are accrued, and also that bad times will occur, as is the case now, when the Fund’s assets decline in value and the accrued reserves have to be called upon. Consequently the present financial crisis is, of course, also impacting the Dutch Shell Pension Fund; the far lower share prices coupled with a lower interest rate are forcing down its funding ratio (assets divided by pension liabilities). However, it is essential to maintain focus on the longer term, and you can ascertain the Pension Fund’s financial position on a year by year basis from its Annual Report and Facts & Figures publications. Pension contribution
The level of pension contribution payable by participants is stipulated in the Regulations. The contribution payable on each salary up to the pension contribution limit (currently EUR 74,881) is 2 per cent; on the portion of salary above that limit, pension contribution is payable at the rate of 8 per cent. The Board may decide, for one calendar year at a time, to reduce the normal rate from 8 per cent to a minimum of 2 per cent. In December 2007 the Board decided to do so for the 2008 pension contributions, in view of the Pension Fund’s high funding ratio in 2007. That is why all participants currently pay pension contribution at the 2 per cent rate on their entire salaries. The greater part of the pension contributions due is borne by the employer.
In December 2008 the Board will take a decision on the pension contributions for 2009. Read more about pension contributions >> Indexation
In June each year, the Board decides on the indexation of pensions. Indexation in the Pension Fund takes place as from July 1. In doing so the Board takes account of the Pension Fund’s financial position, amongst other factors. It is still too early for anything to be said about the possible consequences of the financial crisis for indexation as of July 1, 2009. Find out more about indexation >> |
