2014 was an eventful year for the Pension Fund, due in part to the introduction of new pension legislation. The accrual percentages permitted by law were reduced and the amount of salary over which gross pension may be accrued from 2015 onwards was limited. As a result, the Pension Fund's pension scheme has gone from being a final pay scheme to an unconditional average salary scheme as of January 1, 2015.
Shell considers it important to provide a good pension scheme. So a voluntary “net pension scheme” has been introduced. Employees with a pensionable salary higher than the maximum permissible tax threshold for gross pension accrual can participate. This net pension scheme is administered by Shell Nederland Pensioenfonds Stichting (SNPS). A large majority of the employees eligible for this net pension arrangement has chosen to participate.
The Board is concerned that the employment package pension is being eroded further by the Government. As a result, good financial planning for employees is becoming increasingly important.
Yield in 2014 was satisfactory. However, it must also be mentioned that, in spite of the significant increase in policy assets, the impact of falling interest rates meant that the obligations rose even more steeply and the funding ratio fell on balance.
In 2015, it remains a challenge for the Board to deal effectively with the uncertainties of the financial markets, with historically low interest rates and unprecedented support measures taken by the European Central Bank.