Pension fund for energy giant Shell increases premiums to 45%
NETHERLANDS - The €17.5bn Dutch pension fund of energy company Shell has decided to increase the pension contribution to 45% of pensionable salary.
The employer - which will contribute 41.6 percentage points of the premium from 1 January - will shoulder the whole of the 9.5-percentage-point increase.
The employees' contribution will remain 2% of pensionable salary up to €77,128 and 8% for salary exceeding this level.
The scheme's coverage ratio fell from 126% in June 2011 to 109% at the end of November, mainly due to falling long-term interest rates, the criterion for accounting liabilities.
A 1% drop in long-term interest rates led to a €2.5bn increase of liabilities in the third quarter, the scheme said.
The pension fund raised the nominal interest hedge on its liabilities to 24% in 2010, but a spokesman declined to provide details on any changes in the scheme's hedging policy.
Meanwhile, the €1.2bn pension fund for pharmacy employees (PMA) announced a contribution increase of 15% to comply with the legal requirement of a cost-covering premium.
Last year, the employer contributed 19.2% and 16.4% for workers born before and after 1950, respectively, while employees paid 9.6% and 8.2% premiums, respectively.
The scheme attributed the increase to the effects of rising longevity and low long-term interest rates.
In 2011, PMA's coverage ratio fell by 21 percentage points to 100%.
The €2bn pension fund for the wholesale grocery industry said it would raise the pension contribution from 18.3% to 18.5% of pensionable salary, with employers and employees paying 13.6% and 5.3%, respectively.
In addition, the scheme will raise the franchise - the part of the salary that is excluded from pension accrual - by €143 to €14,415.
The pension fund said it also lowered the yearly pension accrual from 2.25% to 2.1%.
The industry-wide scheme's coverage ratio was 102.1% at the end of November.