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Shell pension underfunded, contributions to rise

Reuters

Fri Dec 12, 2008 5:40am EST

LONDON, Dec 12 (Reuters) – Royal Dutch Shell Plc (RDSa.L: Quote,ProfileResearchStock Buzz) (RDSb.L: QuoteProfileResearchStock Buzz) said its Dutch pension fund had fallen into deficit as share market turmoil knocked 40 percent off the fund’s value, forcing the oil major and employees to increase contributions.

Shell said in a letter to employees on Thursday, seen by Reuters, that the funding ratio of the Pension Fund was 85 percent at the end of November 2008.

An agreement between Shell and the fund requires Shell to provide additional funding up to a funding ratio of 105 percent, if the funding ratio regularly is below 105 percent over a six-month period, the letter said.

A spokeswoman confirmed a letter had been sent to employees informing them the fund was underfunded but could not say how much the new arrangements would cost Shell. (Reporting by Tom Bergin; Editing by Greg Mahlich)

 

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