Financial situation

The Pension Fund must ensure that the pension undertakings given by the employer can be paid both now and in the future. The funding ratio - the associated benchmark - reflects the relationship between the liabilities of the Pension Fund and its respective assets.

The (actual) funding ratio is a snapshot: it shows the financial situation at one moment. Policy decisions, such as granting indexation, should be based on the policy funding ratio, which is the average funding ratio over the past 12 months.

As of December 31, 2021 the funding ratio of Stichting Shell Pensioenfonds (SSPF) amount to 129.9%, resulting in a policy funding ratio of 126,4%. The graph shows the development of both ratios over the past year.

 

 

Pension funds must maintain buffers for the general risks they run. The minimum buffer is 5%. If the minimum funding ratio required of 105% (red line) is not met, this constitutes a funding shortfall. In addition to that, a pension fund must also maintain an ample buffer for investment risks (green line). If this statutory funding ratio is not met, this constitutes a reserves shortfall. Currently, the statutory funding ratio for the Pension Fund is approximately 120%.

If the buffer requirements are not met, the Pension Fund has to submit a recovery plan to the supervisor (DNB). In the plan the Pension Fund explains which measures it will take to have sufficient buffers again within a defined period of time.

The policy funding ratio was lower at the end of December 2019, which is why we submitted a recovery plan to DNB, the Dutch Central Bank. The plan is assessed by DNB. This may have consequences for the future indexation(s) of the pensions of retirees and deferred participants.