Shell Pension Fund Netherlands

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Shell Pension Fund Netherlands

• 19th May 2010

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Relationship Employer - Employees Pension Fund
Employer / admitted companies
Pension agreement in (collective) employment
contract
Execution agreement
Employee
StichtingShell Pensioenfonds
Trust deed / Regulations
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Pension Fund organization

• Shell Pension Fund Foundation (SSPF)
• Pension arrangements of Group companies in the
  Netherlands
• Board of Administrators
• Participants Council
• Shell Pension Fund Management (SPN) - 20 staff
• SPN 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
  SSPF
• Supervisory Board

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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.

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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

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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

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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

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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

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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 employees decision on
  joining, staying or leaving the company.

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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

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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

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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

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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

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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

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