Remuneration policy SNPS
The SNPS remuneration policy complies with the Pensions Act and the Code of the Dutch Pension Funds and Regulation (EU) 2019/2088. They require that pension funds pursue a restrained and sustainable remuneration policy that does not encourage them to take more risks (including sustainability risks) than are acceptable. The pension fund must set out its policy on remuneration in writing and publish it on the SNPS website.
Target Group for SNPS Remuneration Policy
For SNPS, the rules surrounding the remuneration policy in the pensions sector apply to board members of SNPS who do not work or no longer work for Shell. In practice, this specifically concerns retired board members. Board members who are currently employed by Shell do not receive payments from SNPS. They are deemed to combine board membership with their regular job. Members of the Accountability Council (AC) do not receive any payments in line with the statutory articles. AC members who no longer work for Shell are eligible for a tax-free compensation of expenses capped by fiscal rules. All AC members of SNPS are currently employed by Shell.
SNPS has fully outsourced the administration of the pension scheme and the asset management. The pension fund therefore does not have any employees. Shell Pensioenbureau Nederland (SPN) provides the management support for SNPS. SPN is a subsidiary of Shell and is thus covered by Shell’s General Terms and Conditions of Employment policy. Furthermore, SNPS ensures that the remuneration policy of the parties to which it outsources tasks at least meet the criteria of SNPS’ remuneration policy. The remuneration policy is a fixed part of contract agreements when entering into or extending an outsourcing agreement. For example, in the outsourcing agreements between SNPS and Achmea Pensioenservices (APS) and SNPS and Achmea Investment Management (AIM), it has been included that APS and AIM apply a remuneration policy for their staff which is in accordance with the rules for a restrained remuneration policy of the Dutch Authority for the Financial Markets(AFM) and The Dutch Central Bank (DNB).
Context of SNPS Remuneration Policy
SNPS takes a responsible, careful and restraint attitude to remuneration. All SNPS board members either work for Shell, receive a Shell pension or are entitled to paid-up pension benefits (as deferred participant). Hence, for the implementation of board positions SNPS does not compete with other pension funds (or any external financial service providers). The activities of SNPS Board members are not based on financial motives, but rather on an intrinsic motivation such as broadening of their personal development, commitment to ensure the retirement provision of (former) colleagues within Shell and such.
The remuneration from SNPS for board members who are no longer employed by Shell is moderate. The Board also stimulates that the board membership of members who are currently employed by Shell is included in the annual assessment by their line manager. Things as personal development because of the board membership and positive substantive cross-pollination with the ‘regular job’ within Shell, can e.g. play a role.
SNPS Remuneration Policy Criteria
Within the scope of the statutory requirements for a restrained remuneration policy, the board of SNPS has established the following criteria concerning the remuneration policy:
- The remuneration policy for SNPS board members who are not employed or no longer employed by Shell is in accordance with the SNPS objectives and is appropriate considering the scale and organisation of the fund and the nature, complexity and reputation of the Shell company for which the fund administers the scheme. There are no remuneration components that cause more risks to be taken than acceptable to SNPS . The remuneration for board members who are no longer employed by Shell, is based on market research.
- The remuneration for board members who are not employed at Shell is in reasonable proportion to the responsibilities undertaken, the suitability requirements and time required to perform the duties. With regard to determining the time required to carry out the job, the statutory VTE score is used as a starting point. This is 0.3 for the chairman and 0.2 for a board member. Any deviation from the VTE score is motivated by SNPS.
- In the event of the premature removal of board members who are not employed by Shell, SNPS will not provide severance pay.
- The remuneration is not linked to SNPS’ financial results. This also means that there is no negative incentive effect involved.
- Board members who are employed by Shell are covered by Shell’s General Terms and Conditions of Employment policy and do not receive any (additional) remuneration from SNPS. Consequently, none of the remuneration components involves more risks (including sustainability risks) than is acceptable for the pension fund.
- SPN employees are not employed by SNPS and therefore do not fall under SNPS’ remuneration policy. They fall instead under the general remuneration policy of the Shell Group.
- SNPS involves the remuneration policy in the selection of third parties to which the pension fund outsources any activities. The remuneration policy of these parties must at least meet the criteria of the remuneration policy of SNPS.
- In the event that the general principles of the remuneration policy of SNPS, due to legal exceptions, do not apply to the outsourcement partner, the outsourcement partner in question will provide SNPS insight into its remuneration policy, to allow the pension fund to establish that this policy does not encourage to taking unacceptable risks.
An evaluation of the remuneration policy is carried out every three years by the Board to investigate whether the policy still fulfils the formulated objectives and principles. The Board will periodically re-evaluate the individual remunerations determined on the basis of this policy.
The Board updated and redetermined the remuneration policy on 4 March 2021 on the basis of an evaluation.