Interview chairman of Shell pension funds Martin ten Brink and board member Jolanda Schenk

double interview

With the war in Ukraine, conflicts in the Middle East, rising inflation and high interest rates, 2023 was an uncertain investment year. Nevertheless, SSPF managed to achieve a stable and positive investment result. Interview with board member Jolanda Schenk and chairman Martin ten Brink.

Martin: "The market went up and down substantially. Still, it was a manageable year for us. As a long-term investor, you spread risks. We do this by having a diversified investment portfolio. If something performs less well, another investment will fare better. As a result, we ultimately attained a stable and positive result."

Jolanda: "We are financially stable, and we can weather some setback. That's why we were able to index our pensions last year. As a result, everyone made quite a bit more. In fact, the pension fund has no indexation arrears; it is completely up to date. That is not something many pension funds are privy to."

Transition to the new pension system

Martin: "2023 was largely marked by the Future Pensions Act (Wtp) coming into force. This sets the pension world on the verge of a transformation unparalleled in its scope. A total of €1,500 billion in Dutch pension funds is to be divided among 'personal pots'. In this vast endeavour, we want to adequately inform participants about the choices they can make and how the new law will affect their pensions. In addition, before we move to the new system on 1 January 2027, we want to switch to a new pension administration system. This requires careful coordination of various elements in terms of timing. We are currently making every effort to ensure a well-prepared and secure transition to the new pension system.”

Jolanda: "At this moment, the social partners—Shell Nederland (employer) and the Central Works Council (COR)—are talking about ‘conversion’. They need to agree on the direction: will current pensions be converted to the new system, or will SSPF close for future pension accrual? If the latter is decided, the accumulated pensions will remain in the existing scheme.”

Jolanda Schenk

Martin: "But according to the new law, conversion can only proceed if it is fair and equitable for all participant groups. Until the social partners make that choice, we cannot say much about how the new law will affect our participants. In the meantime, we are preparing for different scenarios."

Jolanda: "Communication with the participants is our key focus. Therefore, together with Voeks (an association of former Shell employees), we visited several locations across the country to engage with participants and hear their opinions. This will give us a clear understanding of how we can most effectively communicate about the Future Pensions Act.”

Ambitions

Jolanda: "One of our strategic goals is to optimise the participant experience. Participants are central to everything we do at our fund. We closely assess how we can best guide participants through all the decision points that arise in their lives, such as marriage, divorce or disability. How do these events affect your pension? We communicate regularly with participants about how these events can affect their pensions, empowering them to make informed decisions. And our fund does that quite well. It's not without reason that SSPF received the Pension Pro Award in communication at the end of 2022."

Martin: "In 2023, participants also rated their trust in our fund at 8.9. Last year, this was an 8.7. We are very proud of that."

Martin ten Brink

Conflict in the Middle East and war in Ukraine

Martin: "The effects of geopolitical developments in the world, such as the war in Ukraine and conflicts in the Middle East, are causing an economic chain reaction. For instance, central banks are taking a more critical approach to their policies, commodity prices are on the rise and consumer confidence is declining. These are all factors that could potentially reignite inflation. If these conflicts escalate, gas and oil prices will rise, causing the global economy to cool down again. The International Monetary Fund (IMF) is already predicting that the global economy will not increase by more than around 3 per cent per year over the next 5 years. That is the lowest level since 1990."

Looking ahead

Jolanda: "Our socially responsible investment policy, also known as ESG (Environmental, Social & Governance), is a key focus for the board. We have, among other things, an ESG Forum, in which board members meet with specialists from our asset manager SAMCo and Shell Pensioenbureau Nederland. Together, we discuss how to further develop our ESG policy and what regulations are coming our way."

Martin: "We also outlined our climate policy in 2023 with the ultimate goal of having a 'net zero investment portfolio' by 2050. This also has a long way to go, but our fund has set clear targets along the way."