The SSPF investment policy is recorded in outline in the Statement of investment principles. This policy is determined by the SSPF board. The Investment policy is elaborated in detail in the Actuarial and Business Memorandum (ABTN) and the Investment Plan.
The objective of the Board’s policy is to comply with the pension entitlements and pension rights, in which the aim is to retain the value of the existing and non-contributory pension entitlements. The benchmark that applies to this aim is the ‘derived price-index figure for all households’. The design of the pension scheme aims for simplicity and transparency and for independence from the developments in social security.
SSPF aims to achieve this objective with contributions that are both acceptable for SSPF as well as the sponsor.
Risk appetite and Investment Beliefs
The risk capacity of SSPF is mainly determined by the risk appetite of Shell Petroleum N.V. (SPNV) and its commitment in the event of a funding shortfall (phased) to deposit up to a coverage ratio of 105%. The Board, in determining its own risk appetite, has taken the Board’s target objectives for SSPF as starting point, weighing up the extent to which the Board is prepared to appeal to the SPNV commitment to deposit additional funds and also taking the Board’s formulated investment beliefs (SSPF Investment Beliefs) into consideration:
- return is the reward for taking investment risk, hence risks within the investment policy cannot be avoided but are taken with prudence
- a long-term investor uses a broad investment spectrum
- active management can add value
- engaged shareholdership stimulates good governance and corporate social responsibility
- a cost-efficient implementation of the investment policy adds value
- diversification improves the relationship between risk and performance
- ESG factors influence the investment risk and return of all asset categories, where good governance is a condition for improvement of the company’s performance on E (environment) and S (social) factors