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Shell Pension Fund Netherlands

Shell Pension Fund Netherlands. 19 th May 2010. Relationship: Employer - Employees – Pension Fund. Employer / admitted companies. Pension agreement in (collective) employment contract. Execution agreement. Employee. Stichting Shell Pensioenfonds. Trust deed / Regulations.

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Shell Pension Fund Netherlands

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  1. Shell Pension Fund Netherlands 19th May 2010

  2. Stichting Shell Pensioenfonds Relationship: Employer - Employees – Pension Fund Employer / admitted companies Pension agreement in (collective) employment contract Execution agreement Employee StichtingShell Pensioenfonds Trust deed / Regulations

  3. Pension Fund organization Shell Pension Fund Foundation (SSPF) • Pension arrangements of Group companies in the Netherlands • Board of Administrators • Participants’ Council Shell Pension Fund Management (SPN) - 20 staff • SPN has been appointed as Director, administers the pension arrangements and advises the board of SSPF and the employer • Supervisory Board Shell Asset Management Company (SAMCo) - 120 staff • SAMCo has been appointed as the asset manager for SSPF • Supervisory Board

  4. SSPF Board of administrators (BoA) • Parity representation of employees and employers • Four representatives of the member companies • Four representatives of the employees • Members BoA appointed by SPNV (employee representatives on recommendation of the Central Staff Council) • The BoA shall address the interests of all Pension Fund members and all other interested parties and ensure that they can feel represented in a balanced manner.

  5. Participants Council (PC) • The PC advises the BoA on important matters with regard to the Fund, either on request or on their own initiative. • Twelve members, appointed by Shell Petroleum NV • Representatives of fund members in active service are nominated by the Central Staff Council of Shell in the Netherlands • Representatives of retired fund members (including fund members with an early deferred pension) are nominated by the Shell Pensioners Club (VOEKS) • Composition as per 1/5/2007: 4 active participants, 8 pensioners

  6. Additional governance requirements from 1st January 2008 • Based on principles of good Pension Fund Governance agreed between social partners and the pensions sector • Transparency and accountability key issues • 2 additional bodies were instituted: - Tripartite Accountability council: employees, employer and pensioners - Internal Supervisory committee: independent experts

  7. SSPF key data • Participantsactive 11.226 (15% outside Netherlands)deferred 7.010 (13% outside Netherlands)pensioners 19.300 ( 7% outside Netherlands) • Admitted companiesNetherlands 23Abroad 170 in 57 countries • Pension schemesShell 12Billiton 8 • Liabilities € 12,500 billionAssets € 15,400 billion Data ultimo 2009

  8. Funding principles and asset management • Based on Dutch Solvency regime • High commitment from Employer/sponsor • Sponsor provides high level Pension fund management guidelines and risk and funding targets • Guarantee from sponsor in case of insolvency • Advanced ALM model and strategic asset allocation • High equity ratio and international diversification in portfolio • In company professional asset management

  9. Pension as important benefit • Shell differentiates pay for performance, ‘benefits’ and so called ‘facilities’ • Shell focuses more and more on reward for achievement(performance based pay) • ‘Benefits’ are part of Employee Value Propostion: “to recruit and retain staff”. Retirement benefits are included in this EVP. • ‘Facilities’ provide the employee comfort, but are not included in the employee’s decision on joining, staying or leaving the company.

  10. The Shell scheme in brief • Target retirement age 65 • Actual retirement age: choice of any age between 55 and 65 and between 65 and 70 with employer consent • Old age pension based on final salary • Partner pension is 70% of old age pension • Orphan pension is 14% of total partner pension • Incapacity pension: percentage of salary • Flexibility in benefits • Benefit indexation ambition conditional on financial condition fund • Employee contribution: minimum 2% of salary, 8% on salary above € 75.000 • Employer contribution for 2007: 31,6 % of total salary bill

  11. Old age pension (OAP) • Pension formula: OAP = pension years x pension base x accrual percentage • Accrual percentage: 1.1 % of pension base up to € 28,506 2 .0 % of pension base between € 28,506 and € 63,659 1,75 % of pension base between € 63,659 and € 106,578 1,5 % of pension base above € 106,578

  12. Partner pension • Life long partner pension: 70% of old age pension • In case of death in service, projected years between death and age 65 are included in calculation • Applies to:- married partners- legally registered partners - cohabitating partners registered with the pension fund • Supplementary partner pension for partners under age 65 of 1.6% of € 28,506 for each pension accrual year: compensation for not qualifying for State widow benefit and not yet receiving State old age benefit:

  13. Orphan pension • Orphan pension: 14% of total partner pension • Children under age 18 qualify • If in full time education up to age 24 • If both parents have died: orphans pension is doubled

  14. Incapacity pension • Granted if earning capacity is less than 20% • Assessment is made by medical doctor appointed by the Board of Administrators • Benefit: 100% of salary up to € 63,659 70% of salary above € 63,659 • Benefit is paid until reaching age 65 • Pension accrual continues • At reaching age 65 old age pension is based on number of years in active service + number of years in receipt of incapacity pension

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