Do you participate in the SNPS pension scheme and/or the Shell Net Pension Scheme and did you opt to participate in the Collective Variable Pension (CVP)? If so you have been notified of the results achieved in 2022. And what this means for the amount of your pension.

In recent years, the CVP has achieved the following results.
The results - profits and losses - are incorporated into your pension and spread over a period of 5 years. This will prevent large fluctuations in your pension, but will cause your pension amount to vary slightly from year to year. A variable pension is expected to pay out more than a fixed benefit in the long term. But if times are bad, there is also a risk that a variable benefit will be lower than a fixed benefit would have been.

2022: strong inflation and negative sentiment on stock markets
The year 2022 was a special investment year in several ways. Interest rates rose hard due to sharply higher inflation and most asset classes ended the year with sharply negative returns. It was the first time in decades that both shares and government bonds showed negative returns at the same time. The war in Ukraine and the consequent sharp rise in inflation, in part, caused this negative sentiment. In human terms, but also in investment terms, 2022 was a year to quickly forget.

Negative return in 2022 is spread over 5 years
The CVP portfolio invests in a mix of marketable securities, such as shares, and fixed-income investments. Fixed-income investments are mainly intended to keep the pension benefit - which is also sensitive to interest rate changes - somewhat stable. In particular, the marketable securities should over time ensure that pension benefits increase on average. Adding all factors together, including the effect of interest rates on pension benefits, the 2022 effect is that pension benefits would fall by over 5%. However, this result is spread out over 5 years: one-fifth of the negative result thus affects pension benefits for the next 5 years.

Results from previous years are also spread over a five-year period. For instance, the result on pension benefits in 2021 was just over 5% positive. If you also participated in the CVP in 2021, the negative result of 2022 is therefore roughly cancelled out against the positive result for 2021.

Long-term purchasing power
With Shell's innovative pension scheme, we aim to increase your pension on average. In times of a very sharp rise in inflation, such as in 2022, your pension benefit will not move 1-to-1 with inflation. The investments are not designed for that.

Read more about the CVP and spreading of results.