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Shell’s funding ratio tumbles

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  • Shell’s funding ratio tumbles

NETHERLANDS - The Dutch pension fund of Anglo-Dutch oil giant Shell has seen its funding ratio plummet 160% to 85% in less than a year.

Shell announced the bad news in a letter to its members yesterday, revealing the cover ratio at the end of November stood at 85%, and the value of its investments had dropped by 40% since the beginning of this year.

The fund had already contacted the regulator DNB about its funding position of 105% in October as Dutch regulations stipulate the cover ratio of a pension fund must be at least 105%, and any shortfall must be repaired within three years.

Shell's Dutch fund, whose assets are managed by the Shell Asset Management Company (SAMco), invests heavily in equities, with around 70% of its assets allocated to the class.

The fund said its investments are spread globally, though on the basis of higher growth expectations it has a higher than average allocation to emerging markets.

As a consequence of the drop, Shell has decided the discounts on certain contributions will expire from next year.

Dutch media reported pension giant PFZW, the second-largest Dutch pension fund, had also dropped below 105%, and had a cover ratio of 96% at the end of November.

If you have any comments you would like to add to this or any other story, contact Carolyn Bandel on +44 (0)20 7261 4622 or email carolyn.bandel@ipe.com

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