3 October 2008
Im surprised that there is not yet some information on your site regarding the proposed changes to Shell Pension Terms. Whilst Netherland unions are protesting against increased pension age and employee contributions, the UK has been strangely quiet. Of course many Shell UK offshore assets have been sold-off and the asset workforce sold-out but still though is it no noise or no voice that prevents representation against Shell pension cuts in the UK?
Shell proposes from 1/1/2009 to establish a new section to their pension scheme for new employees/new pension joiners. This new section offers less attractive terms than those currently existing.
Fair enough, you might say, as these new employees will at least know these terms before committing to joining scheme. But how will they then feel if in a few years Shell subsequently reduces these terms yet again? Wont happen. Well that is exactly what is proposed for existing employees and deferred pensioners.
Currently if pensions is claimed earlier than NRD (normal retirement date) a per annum reduction of 3% for each year early applies. Under new proposals, to be applied to existing employees and deferred pensioners who have already paid their pension contributions for 20/25/30 years, the annum reduction is to increase to 4% per annum.
How much difference can 1% make, well a lot, especially if your made redundant!
Currently rules mean that if your made redundant (remember, Shell has since 1999 conducted major manpower reductions and continues to do so) at say, age 53 you only incur a reduction of 2 years @ 3% because from 55-59 no reduction applies. New rules apply from 55 onwards hence maximum reduction could be as high as 5 x 4% = 20% reduction. Shell has not clarified how someone aged 50 before April 2010, and therefore entitled to pension from this age might be affected, could it be 10 x -3% or 5 x -3% or 10 x -4%….who knows, Shell knows of course but is perhaps saving that news for less inflamed times.
Shells proposals to cut pension terms also come at a time when they continue to make record profits whilst giving themselves, as the employers, a pension contribution holiday on the basis that the pension scheme is in surplus however, employees must continue to pay their share of pension contributions yet enjoy reduced pension terms/payouts.
Shell has informed existing employees & deferred pensioners of the proposed change via small print in obscure quarterly magazine that many may not even read until it is too late. There has been no consultation or canvass of opinion, no right of redress.
Shell wants it all. Record Profits whilst reducing manpower thus increasing pensioner numbers whilst not paying employer pension contributions and therefore reducing overall pensions to stretch the pension pot a little further before its final implosion.
A Very Concerned Deferred Shell Pensioner
(Name and email address supplied)