NETHERLANDS - The €18.5bn pension fund of oil giant Shell said it will pay its 37,500 participants a full indexation of 1.6% as of 1 July.
The scheme's coverage ratio last year increased from 145% to 165%.
The rules of the new financial assessment framework FTK allow full indexation with a funding ratio of over 130%.
Shell Pension Fund has been able to pay full indexation every year since 2001, but achieved 1.4% in 2006.
The scheme's board will soon start discussing its ALM-based strategic investment policy for the period 2008-2010, a spokesman indicated, and will also look into issues such as social responsible investment.
Three unions recently urged the pension fund to withdraw its investments in arms manufacturers.
Present allocation for the pension fund's strategic investment mix consists of 30% fixed income, 60%-67% listed equity and 3%-10% alternatives, including property and private equity.
Listed equity and alternatives, together, are meant to comprise of 70% of the scheme's assets, however, rules specify the strategic weight of equity investments must decrease as the weight of alternatives goes up.
Stichting Shell Pensioenfonds returned 17.3% last year while projection for the long-term return of the total portfolio is 6.8%.