News relating to the SCPF or pensions in general.
Additional Voluntary Contributions (AVCs) With-Profits funds
Early last year Legal & General announced the sale of its mature savings business (including the With-Profits arrangement) to the ReAssure division of Swiss Re Limited. The transfer was originally scheduled for 4 November 2019, but the High Court approval has now been deferred. We don’t know the new dates for the transfer or High Court hearing yet, but we’ll contact all members with With-Profits AVCs as soon as we do.
It’s time for you to vote
Look out for your 2019 Member Nominated Director election ballot details. If you’re an active member or you have registered your email address you’ll receive all the information you need to vote in an email from Electoral Reform Services, otherwise you’ll receive a ballot paper in the post. Voting will take place between 11 October and 8 November 2019.
2019 MND Elections
Two of our Member Nominated Directors (MND) are approaching the end of their term of office so we are holding an election in October 2019 to select new MNDs. These positions are open to all eligible members so if you think you would make a good trustee director, have the time and would like to help us run the SCPF we would like to hear from you.
This is an important and responsible role and a fascinating way to get involved with the issues which affect you and your fellow members. You can find out about the importance of this role and of voting in the election in this short video.
A discussion with the SCPF Trustee Board
In the 2018 Source we asked members to send in any questions they might have about the SCPF. In this short video the Trustee Board answer questions from members on a range of subjects including the investment strategy, the valuation and indexation.
The 2018 Source
We are pleased to announce the new-look 2018 SCPF Source is ready to view, which, along with the usual information on investments and the Trustee Board, also includes the results of the 2017 actuarial valuation.
An interview with Tim Morrison
It's been four months since Tim Morrison took over as Chairman of Shell Pensions Trust (the Trustee for the SCFP). In this short video, Tim talks about what has been keeping the Board busy and the areas they will be concentrating on in the coming years. Also look out for this year’s edition of the Source due out in November, which includes the results of the recent Actuarial Valuation.
GMP Court Ruling
You may have recently seen in the News the decision by the High Court that pension schemes should equalise benefits between women and men who have guaranteed minimum pensions (GMPs). This is a complex area and the Shell Pensions Trust are currently talking to their advisers to establish who this may affect and on the best course of action to implement any changes.
Message from Clive Mather
After 10 years as Chairman of the Shell Pensions Trust, the time has come to hand over. I can think of no better person than Tim Morrison as my successor. The SCPF has always been one of the top schemes in the UK and I know it will be in safe hands.
I would like to thank all of my fellow Directors and the Trustee Services Unit team for their support over the last decade. Together we haveweathered many challenges; market crashes, quantitative easing, ever increasing regulatory pressures and latterly all the uncertainty following the Brexit referendum.
Throughout all these testing times the commitment of the Company to the Fund has never wavered and that is fundamental to the long term health of the SCPF. With a diversified portfolio of quality investments and a strong sponsor, the Fund is well placed to cope with whatever new problems the future holds, and as importantly to seize new opportunities.
It has been a privilege to Chair the SCPF and I do wish Tim every success as he now takes the helm.
New Privacy Notice
The Green Finance Inquiry
The Environmental Audit Committee has written to the top 25 pension funds in the UK, to ask how they are considering environmental risks such as climate change. The letter contains nine questions on pension fund investment and climate change-related risks. You can read a copy of the letter from the Environmental Audit Committee to the SCPF and read our response here.
You may have seen recent articles in UK newspapers reporting on the size of some British companies’ pension deficits including Royal Dutch Shell.
The figures the press quote are often taken from the published accounts for Royal Dutch Shell plc, these are sometimes misconstrued and may incorrectly use group data when referring to the UK Pension fund. The Royal Dutch Shell plc accounts quote the total accounting liability for all of Shell’s pension arrangements around the world. The majority of Shell’s pension schemes, including the SCPF, have assets supporting these liabilities. In addition, there are however some Shell pension arrangements that are unfunded as permitted under local legislation, so will show a shortfall for reporting purposes.
It is always important to remember that the SCPF’s assets are ring-fenced and are therefore separate from Shell’s other pension schemes as well as the Company. You can read about the details of SCPF's funding position in our annual newsletter the Source
The General Data Protection Regulation, better known as “GDPR” is a new EU regulation which comes into force in May 2018. The new regulation has been designed to update the existing Data Protection rules and give people more control over how their personal information is collected, stored, shared and used. We will be contacting all members before May to explain how we use and protect your data.
Member Nominated Director (MND) Elections Results 2017
The results of the SCPF Member Nominated Director (MND) Election are now in. Electoral Reform Services issued 35,970 ballot papers and 7,633 votes were cast by Single Transferable Vote.
There were two vacancies this year and the two candidates who received the most number of votes were:
- Graham Bryant, and
- Mary Corrie
Both have been duly elected to serve as a MND with effect from 1 January 2018, for a 4-year term. Congratulations to them both!
Full details of how the votes were cast can be found in this voting explainer.
Trustee Director News
It is with deep sadness that we inform you of the death of Moira Shannon, Trustee Director of Shell Pensions Trust, after a serious illness. Moira worked for Shell Legal in London for over 20 years and was a valued member of the Board and Investment Committee. She was highly respected by her colleagues and a good friend to all the trustees. We extend our heartfelt condolences to her husband, and two sons.
Clive Mather, on behalf of the Board.
Don’t forget to vote
Look out for your 2017 MND election ballot package, for Deferred and Pensioner members, which will arrive either by email or by post from Electoral Reform Services. Voting will take place between 9 October and 10 November 2017. The easiest way to cast your vote is online, using the security codes quoted on your ballot paper or email.
The 2017 edition of the SCPF Source, the newsletter from Shell Pension Trust Limited, is now available. To view it please click here.
This edition features a member survey - please take a moment to complete the survey on page 3! Your responses will help us to provide you with information and services that you find most useful.
Funding of the SCPF
There are often articles in the press that talk about Shell having a large pension deficit. The figures frequently referred to, are taken from the Royal Dutch Shell plc accounts, and refer to the total accounting liability for all of Shell’s schemes across the globe. This includes schemes in other countries that are deliberately unfunded as permitted under local legislation, so will show a shortfall for accounting purposes.
The SCPF is currently well funded, and its assets are ring-fenced from Shell’s other schemes, including the unfunded schemes mentioned above. You can read more about the SCPF's funding in the upcoming Source.
The Trustee Services Unit has become aware of unsolicited approaches and cold-calling to SCPF members from companies offering financial advice and suggesting you transfer your pension from Shell to another pension scheme, often overseas.
These companies often quote inaccurate and misleading information about your benefits from the SCPF and actions the Trustee or Company have taken (when they have not) or they claim to offer ‘guaranteed returns’ from their own investments.
Don’t be caught out! Read The Pensions Regulator’s five tips for protecting yourself from scammers, by clicking on this link website.
2017 MND Elections
The SCPF are looking for two pensioner members to join the Board of the Trustee Company. If you’re interested in becoming a Member Nominated Director (MND) read the “Introduction to Trusteeship” and the “Election Rules” before the nomination deadline of 31 August 2017.
Pensioner Liaison Representatives
We can now advise that the consultation with the Pensioner Liaison Representatives (PLR) has now been concluded and the decision to close the PLR network in June has been reconfirmed.
Discussions with the Shell Pensioners Benevolent Association (SPBA) about the future of benevolence beyond the lifetime of the PLR network are continuing and a potential new model is under investigation. Pensioners will be advised of the details of the new scheme as soon as we are able to do so.
Taxation Of Overseas Pension Schemes
In December 2016, the UK Government published draft legislation affecting how benefits paid from overseas pension schemes, such as the Shell Overseas Contributory Pension Fund (SOCPF), will be taxed from 6th April 2017. If you are a SCPF member who also has benefits in the SOCPF you can read further information on the SOCPF News page. If you haven’t already done so, you can register to receive updates by e-mail at www.sp.pensioncomms.info.
Pensioner Liaison Representatives
Pensioner members will have received a letter from the company outlining proposals that the network of Pensioner Liaison Representatives (PLRs) will cease in 2017. This is a significant change and the Trustee of the SCPF was consulted before the company reached this decision. The staff affected are now being consulted.
The Trustee would like to thank the PLRs, past and present, for the contribution and help, which they have provided to pensioners over the years. It recognises the necessity for the company to move to a more consistent and cost-effective approach to supporting the pensioner population. The Trustee welcomes the reaffirmation of the company’s support for the Shell Pensioners Association (SPA) and the Shell Pensioners Benevolent Association (SPBA).
The 2016 edition of the SCPF Source will be issued to all members this month (September). This year we are including a letter requesting your email address so that we can start to communicate electronically with those who are happy to move away from paper. It’s easy to register:
- Visit the website at sp.pensioncomms.info
- Enter your surname as printed on the letter and insert the unique PIN
- Finally enter your personal email address
Once you’ve registered you’ll receive emails letting you know when the Source and other non-personalised communications are available to view online, giving you instant access to important information and resources. We very much hope you will take this opportunity to help us to help you.
Recording of the Shell Pensions Trust webcast to active members of the SCPF
The Trustee of the Shell Contributory Pension Fund held a live webcast with active members of the Fund on 26 January 2016. This was well attended, with 536 active members dialling in.
You can watch this webcast, which can be found on Shell Pension Trust Webcast.
Many questions were asked during the webcast, some of which were addressed live during the session, but time did not allow for all to be answered. However all the questions asked, together with answers, can be found on webcast questions and answers.
The first question asked during the webcast will be of particular interest to all members, and built on articles that many have seen from time to time in the press which comment in passing on the funding position of the Shell pension schemes.
By way of reply it was noted that, when referring to Shell, the data used by the press is typically that which is publicly available in the accounts of Royal Dutch Shell plc, which reports the aggregate accounting position of all of Shell’s pension schemes and its other post-retirement benefit obligations across the globe.
Each individual pension scheme sponsored by the Royal Dutch Shell group of companies is independent of the others, with its own individual funding position. This includes the Shell Contributory Pension Fund which was established as a Trust from the outset, with its own independent legal entity.
The Trustee is pleased to advise that as at the end of 2015 the funding position of the Shell Contributory Pension Fund was 105%, as compared with 104% at the end of 2014, the date of its last full actuarial valuation. This fully funded position has been maintained despite challenging market conditions, partially as a result of the Trustee decision to further de-risk the portfolio during 2015.
You can hear more on this, and the answer to many other questions, in the webcast.
Member Nominated Trustee Directors Election Results
The results of the recent election results for Member Nominated Trustee Directors of Shell Pensions Trust Limited are as follows:
Active Member Constituency - Elected: Fraser Johnson
Pensioner/Deferred Member Constituency - Elected: Sue Jones
All new directors will serve four year terms beginning 1 January 2016. The Board welcomes the new directors and thanks all members for participating in the election process.
BP Class Action
You may have seen press coverage over the weekend (5 July 2014) that the Trustee is part of a legal action against BP. A number of BP shareholders from around the world, including Shell Pensions Trust, are suing in Texas for losses incurred on the shares bought before the 2010 Deepwater Horizon disaster.
The Trustee’s decision to join these particular proceedings was taken last year after consultation with its legal and investment advisors. It is a fiduciary decision, as pension fund trustees are required by law to act in the best interest of their participants and beneficiaries. By participating in such a claim, pension funds may recover all or part of their related investment losses from the proceeds of a potential court award or settlement and if they did not, they would indirectly suffer from any pay outs to other investors who would be successful in their claims.
The Trustee regularly participates in different claims or class actions related to its investments.
Same sex marriages
Since 13 March 2014, the Marriage (Same Sex Couples) Act 2013 has allowed same sex spouses to have the same benefits as opposite sex spouses but only for benefits based on a Member’s pensionable service from 5 December 2005, the effective date of the Civil Partnership Act 2004.
To ensure that dependants’ benefits are not limited to the legislative minimum, the Trustee Board agreed to amend the Trust Deed and Regulations and has passed a resolution allowing any ‘qualifying spouse’ to be entitled to a dependant’s pension based on all of a Member’s pensionable service. This means we treat those in a same sex marriage exactly the same as anyone in a civil partnership or married to a spouse of the opposite sex.
Contribution Reserve Account (CRA)
We have written to every member to advise you of a change to the way in which the Company funds the SCPF. This is for information only as there is no impact on your pension benefits as a result of this change. If, however, you do have any questions then please send them to the following email address SI-Pension-HRUK-CRA@shell.com. A copy of the letter can be downloaded below and some more background information in the form of frequently asked questions and answers.
The Budget included big changes for UK pensions and it is natural for members to wonder how they will be affected. The major announcements currently only affect members of defined contribution (DC) pension schemes. The SCPF is a defined benefit (DB) scheme and in the short term there will be no impact for the majority of members.
The Government has started a consultation exercise on how, or whether, any of the changes should apply to private sector DB schemes or to the AVC arrangements held within such schemes. It will be many months before anything concrete is known.
Member-Nominated Director Elections for the SCPF – Results
Active Member Constituency:
Moira Shannon has been elected for a term of four years from 1 January 2014
Nathaniel Mead has been elected for a term of two years from 1 January 2014
Pensioner Member Constituency
Mary Corrie has been elected for a term of four years from 1 January 2014
Pensioner Liaison Representative Constituency
As previously announced, David Fortune has been elected unopposed for a term of four years from 1 January 2014.
Thanks to everyone who stood.
Additional Voluntary Contributions
As announced in the 2012 edition of ‘the source’, the Trustee has added two new investment funds to the current range of unit linked funds, bringing the number of funds in which members can choose to invest to twelve.
More details of the funds are given in the AVC Newsletter being sent to SCPF active members’ home addresses with their annual SCPF benefit statement as well as the updated ‘Understanding your AVC Investment Choices’ booklet - AVC Investment Guide July 2013.
The Pensions Regulator (TPR) recently launched a campaign warning individuals of the potential risks of transferring their pensions in certain circumstances and have produced a leaflet giving information about this.
The leaflet is available to download from the ‘SCPF Factsheets’ and ‘SOCPF Factsheets’ section on this website, or for more detailed information, a factsheet can be downloaded direct from TPR’s website via the following link: http://www.pensionsadvisoryservice.org.uk/media/826600/members_leaflet.pdf
RPI Consultation – No Change
The UK Statistics Authority (ONS) have announced that, following its consultation, there will be no change to the calculation of the Retail Prices Index (RPI). This was a surprise - the markets had already factored in some expected changes. The ONS have recommended that any future changes to RPI should be limited to issues such as the annual update of the weighted ‘basket’ and improvements to data (for example, they have also recommended some improvements to the data on housing costs).
There will be a new index published, RPIJ, which uses basically the same data as the RPI but has a different formula which is more in line with the way CPI is calculated. It is currently unclear what practical purpose the new index will have, other than to aid analysis of the impact that the formula effect has on RPI.
In summary, the current formula will continue to be used for all RPI-linked pension increases, so there is no change in the way SCPF pensions are calculated.
Tax Reforms - Scheme Pays Option
A factsheet has been produced to advise active SCPF members about the ‘Scheme Pays’ option available in some circumstances if they believe that they are subject to an Annual Allowance tax charge. The factsheet must be read in conjunction with the Annual Allowance factsheets and both are available from the ‘SCPF Factsheets’ section.
Strategic Asset Allocation Review
As you may have read in the Source, the Trustee undertook a detailed review of the SCPF's investment portfolio following the trienniel valuation. As the position of the fund has not changed dramatically in the last few years, there is no dramatic change in the asset allocation.
The main change has been to increase diversification by adding new categories of sovereign and corporate debt to the permitted asset classes which we believe should not reduce the chance of good performance but reduces downside risk. There has also been press coverage during the year about the Government's desire for pension funds to invest more in UK infrastructure.
The new Strategic Asset Allocation has added Infrastructure as a permitted investment, but we will only invest when our advisors can recommend assets which we believe are suitable for the Fund. The Trustee Board approved a revised Statement of Investment Principles in September.
Proposed Changes to RPI
You may have read in the papers that the Office for National Statistics (ONS) has announced a consultation on changes to the calculation of the retail prices index (RPI) rate of inflation which could lead to RPI moving more slowly and in step with the consumer prices index (CPI). When there is no price information for some parts of the index, an average is calculated. The way this is done is different for RPI compared to the CPI. Historically, this difference - know as the 'formula effect' - has led to the RPI increasing faster than CPI.
The outcome of this consultation could vary from "no change" to a complete elimination of the formula effect. The consultation closes on 30 November 2012 and any recommendations arising from it will be published in January 2013. Any changes would impact the returns paid by index-linked gilts, which means that the Bank of England must also be consulted, and changes might need to be agreed by the Chancellor.
Depending on the extent of any changes, there might be significant consequences for the Fund and for members. We will continue to monitor developments in this area and we will update the website if and when the Government takes any concrete decisions.
Pension Increases - RPI/CPI (Updated)
You may have heard or read about the Government's plans to look at whether pensions should be increased by the Consumer Prices Index (CPI) or the Retail Prices Index (RPI). The Government's consultation process is due to end in March 2011. We await the conclusion of the consultation but at this stage we are not anticipating that we will need to amend the rules in the Trust Deed and Regulations which give RPI as the basis for the annual review of pensions.
We can confirm that we are not required by the Government to amend the Trust Deed and Regulations and that RPI can continue to be used as the basis for the annual review of pensions.
March 2011 (updated February 2012)
2011 UK Retirement Benefits Review
The Company announced today that it is proposing to develop a UK defined contribution pension plan for new hires to Shell to reflect market trends in the UK. Timing is proposed to be Quarter 1 2013. The plan will be designed to ensure that the reward package in the UK for new hires remains strongly competitive.
Current active members, deferred members and pensioners of the Shell Contributory Pension Fund (SCPF) and the Shell Overseas Contributory Pension Fund (SOCPF) are not impacted by this proposal. Active members of the SCPF and SOCPF will continue to accrue pension benefits within those plans on the same basis as now. The Company has confirmed that its commitment to funding the SCPF and SOCPF remains unchanged. Further details of the proposed pension plan for new hires will be made available as the design is progressed.
9 December 2011
Shell Pensions Trust Limited: Member Nominated Trustee Directors Election Results
The results of the recent election results for Member Nominated Trustee Directors of Shell Pensions Trust Limited are as follows:
Active Member Constituency
Elected: Sian Bowen, Fiona Mayhew
First Reserve: Victor Piotrowicz
Pensioner/Deferred Member Constituency
Elected: Bob Craig
First Reserve: Sue Jones
All new directors will serve four year terms beginning 1 January 2012. The Board welcomes the new directors and thanks all members for participating in the election process.
14 November 2011
SCPF Benefit Statements
The Shell Contributory Pension Fund (SCPF) Benefit Statements are usually made available for all active members of the SCPF in late June each year. We decided to delay the statements this year as we had introduced a new and upgraded pensions administration system (Compendia). We advised active members, in late June, that we expected to be able to make the statements available during October 2011.
Unfortunately, there is a further delay while final checks are being made, for which we apologise. Your SCPF Benefit Statement will be sent to your home address during the week beginning 7 November 2011 so you should receive your Benefit Statement by 11 November 2011.
Please note that if you also have benefits in the SOCPF, you will receive two separate statements covering your benefits in each fund.
Please check your statement carefully. If you have any queries regarding your statement, please contact the Pensions Advisory Unit at email@example.com
Recent Market Volatility
Members and pensioners of the Shell Contributory Pension Fund (SCPF) will receive in September a copy of "The Source". This will provide an account of the stewardship of the Fund for which the Trustee, Shell Pensions Trust, is responsible. The Source, produced in newspaper form, is intended primarily to cover the calendar year 2010 in an accessible way, following the publication of the Trustee Report and Accounts. Given the time to print and distribute it, however, please continue to use this website for current information on events.
Recently global financial markets have entered another period of heightened volatility. This has been caused by concerns over government debt levels, particularly in the Euro zone and the USA, and questions over the path of future economic growth.
The Trustee, together with its investment manager, Shell Asset Management Company and its independent investment adviser, Aon Hewitt, is monitoring events closely and is ready to take action if appropriate. It is important to remember that the SCPF is a long-term investor with liabilities going out many years into the future. Investment decisions are made in this context. The paramount aim is to ensure that the Fund's investments produce the cash flows necessary to meet its future pension obligations over the decades to come. This remains the key objective of the Trustee.
The SCPF remains well funded, professionally managed and advised, with the backing of a strong sponsor company.
15th August 2011
New Pensions Administration and Payroll System - Important Information
On 31 May 2011, the Trustee Services Unit implemented a new Pensions Administration and Payroll system, called Compendia. This will enable us to improve our service to members.
Pensioners should note that there are some minor but important changes which affect them - the article below explains the new pension numbers and the new pension payment advice slip layout.
Active members should note that Benefit Statements are usually available for all active members of the Fund in late June each year. Earlier in the year the Trustee Services Unit made a decision to produce the Benefit Statements for the year to 31 March 2011 using Compendia rather than the previous pensions administration system. Having implemented Compendia on 31 May 2011 we now need a period of stability before we prepare the Benefit Statements. It is likely that Benefit Statements will be available at the earliest during October 2011. We apologise for this delay and any inconvenience caused.
We will update you on the expected timing of availability of Benefit Statements later in the year. In the meantime, should you require an update of the information for a specific purpose e.g. you are approaching your Normal Pension Date or are thinking about early retirement, you may request this information from the Pensions Advisory Unit.
All members should note that the Trustee Services Unit has not been in a position to respond to queries from members as quickly as usual during the period when we switched over from our previous administration system to Compendia. We aim to return to our normal response times as soon as possible. Thank you for your patience in the meantime.
Pension Increases - RPI History
In February 2011 the Bank of England made a comment that one component of inflation (clothing) may have been understated by the Office for National Statistics (ONS) in their inflation calculations.
The ONS has stated that it regularly updates its methodology and that there has been no change to the published inflation index (RPI). The latter is what is referenced in the Trust Deeds to calculate pension increases for the Shell Contributory Pension Fund and the Shell Overseas Contributory Pension Fund. As there are no changes to the published RPI, pensions will continue to be uplifted by the published RPI and no changes will be made to historic increases for both funds.
Commutation Factor Review November 2010
When you first take your pension you can exchange some of your pension for a pension commencement lump sum. Commutation factors are used to calculate how much pension you would give up.
The Founding Companies review and set the commutation factors in the SCPF and the SOCPF, after consultation with the Actuary.
The most recent review and consultation took place in November 2010 and as a result the commutation factors were increased from 1 January 2011. The Trustees of the SCPF and SOCPF approved the necessary amendment to the Trust Deed and Regulations at their Trustee meetings in November and December 2010.
As commutation factors are subject to review, you will receive an estimate of the maximum pension commencement lump sum available to you when you take your pension.
If you would like further information about the change in commutation factors please go to HR Online/My Benefits/My Pension or contact the Pensions Advisory Unit FTT/21 email: firstname.lastname@example.org if you are an active member. If you are a deferred member, please email: email@example.com.
The Government has announced the following tax changes:
- From 6 April 2011, the Annual Allowance, which limits the amount of pension savings you can make in a year, will reduce from £255,000 to £50,000.
- This new Annual Allowance will replace the previous Government’s plans for restricting tax relief on pension savings for high earners. However, the anti-forestalling legislation, which prevents increases in contributions and benefits before April 2011, remains in place.
- From 6 April 2012, the Lifetime Allowance, which limits the amount of pension savings you can make in your lifetime, will reduce from £1.8 million to £1.5 million.
- If you think you may be affected by these changes, you should speak to an Independent Financial Adviser (IFA)
Active members can find further information about tax changes, on HR Online/My Benefits/My Pension.