To fund the annual costs required to finance pension entitlements accrued during the year in question, a contribution is established.

This contribution is funded by the Employing Companies (the employers) and the participants in the pension scheme (the employees). At Pension contribution you can read how the contribution is funded.

Liabilities and assets

The provision for pension liabilities is the value of the accrued pensions to be paid now and in the future. The provision for pension liabilities is calculated using the market rate of interest.

The funding ratio indicates the degree to which the provision for pension liabilities is covered by the assets. If the provision for pension liabilities rises, for example as the result of an increase in the salary group or pensions, the funding ratio decreases.

The Pension Fund's assets are the resources (the financial capital and the value of the investments) that the Pension Fund has available to meet its liabilities. Assets are calculated on the basis of market value.

(amounts expressed in millions of Euros) end 2016 end 2015 end 2014
Assets 27,336 26,036 25,256
Pension liabilities 22,394 21,083 20,385
Funding Ratio 122% 124% 124%

The funding ration has been calculated with the actuarial interest rate stipulated by DNB, based on the average of the preceding three months and the 'UFR'.

May 2017

Policy funding ratio

The above graph shows the funding ratio and the policy funding ratio over the last twelve months. The percentages have not been verified by the external auditor.

Explanatory notes

The funding ratio shows whether we have sufficient funds to pay all pensions accrued to date, now and in the future. With a funding ratio of 100%, there are in principle sufficient resources to fulfil the obligations. Pension funds must however also maintain buffers for the general risks run by a pension fund.

The minimum buffer is 5%. If the minimum funding ratio required of 105% is not met, this constitutes a funding shortfall. In addition to that, a pension fund must also maintain an ample buffer for investment risks. The statutory funding ratio required for SSPF (the Pension Fund) is 123%. If this required funding ratio is not met, this constitutes a reserves shortfall. The funding ratio is calculated using the actuarial interest rate prescribed by De Nederlandsche Bank (DNB).

As of January 1, 2015, pension funds must base their policy decisions on the so-called ‘policy funding ratio’. The policy funding ratio is the average of the funding ratios over the past 12 months.

As of September 30, 2017, the funding ratio of Stichting Shell Pensioenfonds (SSPF) amounted to 132 %, resulting in a policy funding ratio of 127 %.

Oktober 2017

More in Policies

Investment policy

The Board pursues a long-term policy in order to manage the Pension Fund’s assets.

Responsible Investment

The policy of the Shell Pension Fund in the Netherlands (SSPF) in respect of responsible investment (also known as Environmental, Social and Governance (ESG) policy) is laid down in the Actuarial and Technical Business Report (ABTN).