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Shell studies worldwide pension consolidation

NETHERLANDS – Oil giant Royal Dutch/Shell is running a feasibility study on the possibilities of merging its worldwide pension asset and investment advice departments.

According to Shell spokesman Henk Bonder the initial focus is on combining the asset and investment advice departments of its UK and Dutch pension funds.

This does not mean a total merger, which would bring around $50bn of assets under one fund. If possible, the rest of the 200 Shell pension funds in 65 countries worldwide could also be taking part.

The study is at present looking at the two departments of the Shell Pensioenfonds Beheer BV in the Netherlands and the Shell Pension Management Services (UK).

The main driver, Bonder says, is to find a more cost-effective way of managing assets and investments, which could lead to lower overall costs.

After the feasibility study, recommendations will be put forward to the respective advisory committees, which need to assess the applicability. In contrast to earlier news reports, Shell pension funds will not be merging.

The new organisation will be based in Rijswijk, the Netherlands. Shell did not disclose how many staff would be affected.

No time frame was given, as the feasibility study could take some time.

Bonder reiterated that scheme administration of all pension funds would still be handled locally and that no centralisation is targeted.

As to how far the merger of the two departments of asset and investment advice would represent a conflict between the Dutch and UK sides is also unclear.

The UK fund has $25bn in assets, while the Dutch fund has $12bn. Dutch media have stated that a group of employees of the UK fund will be transferred to Rijswijk.

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