Shell scheme bolsters investment governance
NETHERLANDS - The €17bn Dutch pension fund of energy giant Shell has improved its governance through two new appointments and the establishment of an investment committee.Maurice Kemper has been made risk and investment officer and will assist the pension board in deciding on risk and asset management independently from Shell Asset Management Company (SAMCo). Following Kemper's appointment, agreements with SAMCo have been reviewed, guidelines have been tightened and the reporting frequency has been increased, the pension fund said. Furthermore, the new investment committee will discuss all reports and documents before they are tabled during the board meetings. The meetings of the investment committee are prepared by Kemper, who is also monitoring the asset management against the pension fund's objectives on a daily basis. Jelle Beenen of consultancy giant Mercer has been made an external investment adviser and will comment on SAMCo's investment proposals for a second opinion. Beenen said he was also monitoring the implementation of investments and supporting Kemper in this area. After a absolute low of €10bn, the assets of the Shell Pensioenfonds have risen to €17bn, mainly thanks to recovering equity markets and a €2bn additional contribution from the employer. At the end the of third quarter, the pension fund's coverage ratio was 113%, whereas its required minimum funding was 105%. The scheme said it has already factored in a 1.7% rise of its liabilities for increasing longevity, but noted that a current assessment of the most recent longevity prognosis of the Acturial Society might further affect its financial position. At present, the scheme's participants' council is disputing the decision to postpone granting the 1.5% indexation that wasn't paid during the lean year 2009, although the pension fund did grant a conditional inflation compensation of 0.8% on 1 July 2010. The council has asked the administrative high court for trade and industry in Amsterdam to check the legality of the withheld indexation.