Posts Tagged ‘Shell Pension Fund’

It has come to our attention that former Shell executive Paddy Briggs (above) has been elected to serve the thirty-three thousand Shell pensioners in the UK as a Trustee of the Shell Contributory Pension Fund for four years commencing January 2010. In addition to the elected members, the Board of Trustees has seven Shell appointees, including UK country chairman James Smith and Clive Mather, the Chairman of the Board.

The manifesto on which Paddy Briggs was elected was:

“I joined Shell Mex and B.P. in 1964 and retired from Shell in 2002 having worked in Shell UK Ltd, Shell International and operating companies in The Netherlands, Hong Kong and Dubai. The Shell that most of us once worked for is long gone – as the “reserves” scandal and the recent furore over top executive remuneration have shown. Such events, coupled with the deteriorating financial position of many pensioners (which was exacerbated this year by a derisory 0.9% annual pension increase) illustrate the extent of the changes in Shell and confirm the urgent need for a strong defence of SCPF member interests by the one elected MNT Trustee directors. I was “First reserve” in the elections in 2007 and hope to go one better this time around. If elected I will do my upmost robustly to represent the interests of the Pensioner constituency and all other beneficiaries of the fund.”

We will quite understand that with Paddy concentrating on his new duties, he is probably unlikely to have the time to continue his insightful, candid and often entertaining contributions on this website. And he may also feel that it would be inappropriate to be an outspoken critic of Shell at a time when he has to work closely with senior Shell personnel in order to protect the interests of the members of the Pension Fund.  Over the years  Paddy’s  plain speaking and knowledge in his published articles, and his thoughtful comments posted on our Shell Blog, may have helped to persuade Shell UK pensioners that he is exactly the right person to represent them at this time. We wish him well.

Quite frankly, we have been surprised that Shell did not retain Paddy as a brand consultant given his continuing interest in Shell and invaluable marketing expertise. At least his fellow Shell pensioners will now benefit from the outstanding qualities which made him such a successful executive during his long career with Shell. And we are always here should Paddy feel that he needs a public platform again!

Global Pensions

by Raquel Pichardo-Allison 30 April 2009

NETHERLANDS– Royal Dutch Shell plans to inject US$5bn into its pension fund in 2009, chief financial officer Peter Voser told analysts yesterday.

In a presentation about the firm’s first quarter returns, Voser said the increased contribution amount, up from $1.6bn in 2008, is driven by regulatory and other legal requirements.

Voser said: “The sharp decline in the world markets at the end of 2008 has left pension deficits for many companies, and Shell is not immune from that.” 

The firm estimated a total post-tax charge for its defined benefit pensions in 2009 of $1.3bn, including a $200m inflationary adjustment in the US. The balance of $1.1bn will be allocated across business segments and divided equally across all quarters. 

The announcement comes just two weeks after the firm outlined a pension recovery plan to the Dutch pension regulator that sees the scheme cutting its equity allocation and skipping indexation this year. 

The petrochemical company said the changes will allow the plan to return to minimum solvency of 105% by October 2011 and full solvency of 127% by 2024.

The scheme plans to reduce its equity weighting to 45% from 55%, boost fixed income to 35% from 30% and increase its allocation to alternative investments to 20% from 15%. 

Yesterday, Royal Dutch Shell reported first quarter earnings of  $3.3bn, down 57.7% from a year earlier.

GLOBAL PENSIONS ARTICLE

Shell’s contribution to the fund has risen from 5% to 23.6% and the employee contribution has risen from 2% to 8% of salaries, the company said in an update posted on its Web site Saturday. The increased payments should bring the pension’s funding ratio to 105% within three years and 127% by 2023, the company said.

Printed below is a draft article. It contains my interpretation of the information contained in email correspondence supplied to me by Shell SA retiree, Mr Ken Purchase. No doubt you will advise if any of the emails are not authentic. If I do not hear from you by close of business on Friday 27 March, I will take it that there is no dispute or challenge over authenticity, stated facts, nor my interpretations or conclusions, and will state as such.

Selection of links to news articles about Shell Pension Fund Problems which are undermining confidence in the proper administration of the funds.

Second, Shell is to spend an extra $5bn-$6bn on plugging its pension deficit. But Shell is nowhere near insolvent and its pension fund has decades to play with. The deficit figure may be interesting information for investors. Why it should require the diversion of much-needed cash flow right now is a different question.

In December, Shell’s Dutch pension fund told members it had fallen into deficit after share market turmoil knocked 40 percent off its value

March 18 (Bloomberg) — Royal Dutch Shell Plc reported an $8.3 billion pension plan deficit for 2008 and expects to make “significant” cash contributions to pensions in addition to the regular annual contribution of between $1 billion and $2 billion.

Shell, heavily invested in equities, saw its investment portfolio decline by 40 per cent in 2008.

Royal Dutch Shell’s (RDSa.L) pension fund also slipped into deficit after its value fell 40 percent, pushing its solvency ratio to 85 percent.