A - D
ACCRUAL RATE is the fraction of Final Pensionable Salary that you will receive for each year of Pensionable Service in a defined benefit scheme such as the SCPF. It is 1/54 for the Pre-2009 Section and 1/60 for the Post-2009 Section.
ACTIVE MEMBER is a member of an occupational pension scheme (such as the SCPF) who is accruing benefits under that scheme in respect of current service.
ADULT DEPENDANT is a person who, in the opinion of your Employing Company, is financially dependent on or interdependent with you.
ANNUAL ALLOWANCE is the maximum value of pension benefits, including AVCs, that HMRC allows you to build up in any year without incurring a tax charge. The Annual Allowance is currently £40,000 a year and will increase to £60,000 from April 2023.
ADDITIONAL VOLUNTARY CONTRIBUTIONS (AVCs) are the contributions over and above a member's normal contributions, which the member elects to pay to an AVC arrangement of an occupational pension scheme (such as the SCPF) in order to secure additional benefits.
BASIC STATE PENSION (BSP) is the flat rate (not earnings related) State pension paid to all who have met the minimum National Insurance contribution requirements, their spouses, subject to certain conditions, and widow(er)s before 6 April 2016. See new State Pension.
CHILD is any one of your unmarried children (legitimate, legitimated, illegitimate, lawfully adopted, or step) who:
- has not yet reached 18 years; or
- is under 23 years and in full-time education; or
- has a disability that means they are dependent on you.
Children is used throughout this website accordingly.
COMMUTATION is exchanging some of your pension for a Pension Commencement Lump Sum. Under current legislation, this cash lump sum is paid tax free.
CONTRACTED OUT was the status of the SCPF in relation to the State Second Pension (S2P). Before 6 April 2016 if you were a member the benefits you would have received from S2P were replaced by benefits from the SCPF. From 6 April 2016, a single tier state pension was introduced which replaced the basic state pension and S2P as a result contracting-out ended for all occupational pension schemes.
DEFERRED MEMBER is someone who has left the service of companies in the Shell Group or opted out of the SCPF, not started to receive a pension and retains benefits in the SCPF.
DEFINED BENEFIT (DB) SCHEME is a scheme in which the benefits are defined in the scheme rules and build up independently of the contributions payable and investment returns. Benefits are based on pensionable earnings and the length of pensionable service on leaving the scheme, retiring or death, whichever comes first. It is also known as a final salary scheme.
DEFINED CONTRIBUTION (DC) SCHEME is a scheme in which a member's benefits are determined by the value of their ‘pot’ at retirement. The ‘pot’, in turn, is determined by the contributions paid into it in respect of that member, and any investment returns. It is also known as a 'money purchase' scheme. Defined contribution schemes can be set up by employers for their employees or can be set up by an individual for him or herself.
DEFERRED PENSION is a benefit relating to the past service of a member of an occupational pension scheme who is no longer an active member but has not yet taken pension benefits. The benefits are payable at retirement or, if earlier, death.
E - N
EMPLOYING COMPANY is the participating Member Company that currently employs a member, or in the case of a Deferred Member or a Linked Fund Member, was the last participating Member Company to employ the member.
FINAL PENSIONABLE SALARY is the salary on which your pension is calculated at the date you leave your Employing Company’s service, leave the SCPF or die, whichever is the earliest.
If you are a member of the Pre-2009 Section
Your Employing Company currently exercises its discretion to include the pensionable shift allowance when calculating pension benefits. This may change in future. At present:
- If you have been receiving pensionable shift allowance for the whole of the three years immediately before the date you leave your Employing Company’s service, leave the SCPF or die,whichever is the earliest, the amount used in respect of pensionable shift allowance in the pension calculation is based on whichever is the highest of:
a) The pensionable shift allowance you received in the 12 months before you left
b) The average of the last three years’ pensionable shift allowance you received
c) The average of the best three years’ pensionable shift allowance you received in the last 13 years (at the same date in the same month as your date of leaving) adjusted by the movement in the Retail Prices Index (RPI) over this period.
- If you have not been in receipt of pensionable shift allowance for the whole of the three years prior to leaving, but have received pensionable shift allowance at some point in the last 13 years, then the amount of pensionable shift allowance that is used in the pension calculation is based on whichever is the higher of:
a) The average of the last three years’ pensionable shift allowance received
b) The average of the best three years’ pensionable shift allowance received in the last 13 years (at the same date in the same month as your date of leaving) adjusted by the movement in the RPI.
If you are a member of the Post-2009 Section
Your Final Pensionable Salary is your highest average annual Pensionable Salary in any 36 consecutive months in your last five years’ Pensionable Service immediately before you leave your Employing Company’s service, leave the SCPF or die, whichever is the earlier. If, when you leave, you have not completed three years’ Pensionable Service, your Final Pensionable Salary will be your average annual Pensionable Salary for that shorter period.
Your Employing Company currently exercises its discretion to include pensionable shift allowance when calculating pension benefits. This may change in future.
FOUNDING COMPANIES are The Shell Petroleum Company Limited and Shell Group Holdings Limited. Some discretionary powers under the SCPF are vested in these companies.
GUARANTEED MINIMUM PENSION (GMP) is the minimum pension which a salary-related pension scheme, like the SCPF, must provide as one of the conditions of contracting-out of the former State Second Pension between April 1978 and April 1997. This means that your pension, when it is paid, can be considered to be made up of two parts, the GMP element and the balance.
INTER FUND LINKING RULES (IFLR) set out the position for members who build up pensionable service in the SCPF and the SOCPF. These rules deal with the calculation of such members’ benefits, the apportionment of those benefits between the SCPF and SOCPF and the funding of those benefits.
LIFETIME ALLOWANCE (LTA) is the maximum value of pension benefits that HMRC allows you to build up during your lifetime without incurring a tax charge. This limit is currently £1,073,100.
LINKED FUND MEMBER means a member of a Fund who is not accruing Pensionable Service in that Fund but has past Pensionable Service in that Fund, and who is an active member of the other Fund and whose periods of Pensionable Service in the two Funds are continuous or are continuous as a result of linked Pensionable Service. Please note, if you are a Linked Fund Member by virtue of SCPF and SOCPF membership, you should read this website in conjunction with the factsheet on Linked Fund Membership.
MEMBER means someone who is or has been employed by one of the Member Companies and joined the SCPF during this period of employment. There are three categories of member: active, deferred or pensioner.
MEMBER COMPANY is a company admitted to membership of the SCPF by the Trustee with the consent of the Founding Companies.
P - Z
PENSION AGE is the age you can take your pension without Employing Company consent, and without having your pension reduced.
- For members of the Pre-2009 Section this is normally age 60, although some members of this Section may have a different Pension Age for historic reasons.
- For members of the Post-2009 Section this is age 65.
PENSION COMMENCEMENT LUMP SUM (PCLS) is a lump sum benefit paid to a member of a Registered Pension Scheme in connection with his or her pension and is paid in commutation of part of the pension. The amount by which your pension is reduced for each £1 of lump sum depends on your sex and your age when your pension starts to be paid.
PENSIONABLE SALARY is your basic salary plus any pensionable shift allowance (excluding overtime, bonuses and non-pensionable allowances) on which your SCPF contributions are based. Any salary sacrifice arrangement is not taken into account.
PENSIONABLE SERVICE is the total of your years and months of SCPF membership whilst in the service of Member Companies, plus any years and months of additional service granted as a result of a transfer in from another Registered Pension Scheme. Any part months of service will be rounded up or down to the nearest month.
PENSIONER means someone who is or has been employed by one of the Member Companies and joined the SCPF during this period of employment, and has started to receive a pension from the SCPF.
PROSPECTIVE PENSIONABLE SERVICE is the service you can build up until Pension Age.
QUALIFYING SPOUSE is someone you are legally married to or in a civil partnership with at the time of your death.
RETAIL PRICES INDEX (RPI) is the index of retail prices (for all items) published by the Office of National Statistics.
Salary Sacrifice is where you give up part of your salary (sacrifice) by an amount equal to the contribution you would otherwise have made to the SCPF. Your Employing Company then pays this amount into the SCPF on your behalf.
SCPF is the Shell Contributory Pension Fund.
SERPS (STATE EARNINGS RELATED PENSION) replaced by S2P, the State Second Pension.
SOCPF is the Shell Overseas Contributory Pension Fund. This includes a pre-2009 Section and post-2009 Section of membership.
SPONSORING EMPLOYER is the employer with responsibility for meeting the liabilities of a DB pension scheme.
STATE SECOND PENSION (S2P) was the earnings related element of the state pension scheme which replaced the State Earnings Related Pension Scheme (SERPS) to enhance the basic state pension.
THE TRUSTEE is Shell Pensions Trust Limited, which is a Corporate Trustee.