Moving together towards the new pension system
Debby van der Voort (Communications Manager, Shell Pension) and Martin ten Brink (Chair of the SSPF board) in conversation about the transition to the new pension system.
SSPF is actively preparing for the transition to the new pension system. The board plays an important role in the transition from SSPF to the Future Pensions Act (Wtp).
The Wtp will fundamentally reshape the Dutch pension landscape and SSPF is facing major changes as a result. The SSPF board believes that open and transparent communication about this issue is important. Martin and Debby discussed the developments and challenges as well as how participants are being guided through this transition step by step.
Participants often ask us why all accrued pensions and pensions in payment are being transferred to the new pension system. How was this decision made?
Martin: In summer 2024, Shell Netherlands and the Central Works Council (CWC) reached an agreement about the implementation of the Wtp with SSPF. In doing so, the Voeks Committee on the Right to be Heard exercised its statutory right to be heard.
Based on this agreement, Shell Netherlands and the CWC submitted a transition plan to the SSPF board on 1 July 2024. This plan includes the assignment to transition to the new system as of 1 January 2027, including the conversion of all accrued pensions and pensions in payment. Between the summer of 2024 and 2025, the board carefully assessed whether this mandate complies with legislation and regulations, and to what extent it is realistic and balanced. These are the 3 legal criteria that a board is required to apply. Based on these 3 criteria, the SSPF board had no reason not to accept the social partners’ request to convert the pensions. In the vast majority (at least 67%) of all 10,000 scenarios calculated, conversion offers better pension prospects for all participants compared to a situation with a ‘hard close’ of the fund. In addition, the expiry of the current additional payment guarantee played an important role in assessing the balance of the proposed Wtp transition. The employer pays a lump sum for the expiry of that guarantee that does justice to the value of that additional payment guarantee.
As part of accepting the instructions, SSPF drew up a comprehensive implementation plan and submitted it to the Dutch Central Bank (De Nederlandsche Bank (DNB)) for approval. This plan contains all the pension fund's considerations, calculations and justifications with regard to the Wtp transition. In addition, a communication plan was submitted to the Dutch Authority for the Financial Markets (Autoriteit Financiële Markten (AFM)) at the same time. In accordance with the requirements of the Wtp, advice was sought from the Accountability Body (VO) and approval was obtained from the Board of Supervisors (RvT). The plan, as well as also a brief outline summary, can be found at www.shellpensioen.nl.
How does the approval process at the Dutch Central Bank (DNB) work for the conversion of pensions?
Martin: Now that the aforementioned steps have been completed, the SSPF board is working on the implementation of the new scheme as of 1 January 2027. The AFM has already issued a positive opinion on the submitted SSPF communication plan. DNB is still assessing the implementation plan and final approval by DNB has not yet been received. However, DNB has already expressed a positive opinion on the quality of the implementation plan and the many of the underlying financial and technical documents.
We expect DNB to give its final approval in the course of 2026. The exact date is not yet known, as DNB also has to assess the plans of other funds.
A number of opinions have been submitted to DNB, with some participants having comments or questions about the implementation plan. How does the SSPF board view these opinions?
Martin: The board is in favour of hearing the interests of all the participants, including retirees and former employees. VOEKS’ right to be heard and the opinions submitted will absolutely be respected. The board emphasises that it is important to consider all the facts in the implementation plan and not just some of the insights. In this way, we can offer participants a complete and balanced picture of what has been decided and how. That is why additional information has been posted on www.shellpensioen.nl I encourage everyone to visit that website periodically for the latest information.
How can participants know that this process was conducted fairly and carefully?
Martin: Each step in the process has been transparent. The VO, where retirees are well represented, closely monitored the entire process has its own independent expert. In addition, the VO asked a number of questions and received explanations. Based on these insights, the VO ultimately issued a positive recommendation. The Board of Supervisors, with three independent members, also assessed and approved the conversion decision. Independent external experts, such as actuaries, accountants and lawyers, supervised and assessed the process. Internal reviews were also carried out by key risk management and audit officials. This ensured that the process was conducted carefully, fairly, transparently.
Martin ten Brink:
‘The transition to the new pension system is a major responsibility. We remain committed to that responsibility. We will continue to work hard to keep participants well informed. Clear communication and mutual trust are key factors in this. SSPF ensures a solid pension, both now and in the future.’
Under the new scheme, the risk lies more with the participant. How are these risks shared?
Martin: Under the new scheme, SSPF retirees share the risks associated with their pensions because they participate in the benefit collective together (Collective Variable Pension, or CVP for short). This benefit collective implements several measures to mitigate risks, such as investment risk, for participants. One example of this is a well-diversified investment portfolio.
In addition, the board has decided to set aside €500 million for the establishment of a risk-sharing reserve. This reserve reduces the likelihood of retirees’ pensions being lower as a result of the transition to less than 5% in the first 15 years.
How is the fund’s buffer distributed? Can you explain why older retirees receive a smaller increase than younger participants? And can an estimate be given of the pension increase after the buffer has been distributed?
Martin: The buffer will be distributed in accordance with statutory rules and based on the methodology proposed in the transition plan. The financial position of SSPF at the time of transition will be decisive on this point. The capital available at that time, after reduction of a mandatory buffer that must be maintained under the new system, will be distributed among all participants in line with the distribution rules of the current pension scheme. This means that all SSPF participants will receive a percentage of their future indexation expectation in a single payment, on top of their existing pension entitlements. Older participants will receive a smaller share than younger participants. This is because older participants have a shorter life expectancy than younger participants. This is no different under the current scheme. The board considers it important to explain this clearly so that everyone understands why the distribution is as it is. Shortly before the transition on 1 January 2027, the exact financial status of the fund and therefore the size of the buffers will be known. At that point, it will also become clearer as to what this means for individual participants. In November 2026, all participants will receive a personal statement explaining their individual situation.
Currently, our participants receive indexation every year. How does it stand with indexation in the future?
Martin: That will change. At the time of conversion, everyone will receive a one-off increase based on the buffer distribution. SSPF will start with a large buffer (at least 25%), which means that pensions will be immediately increased by around 70–100% of the expected future indexations. SSPF will then also generate returns under the new scheme because the pension capital will remain invested. These returns will also directly benefit SSPF participants.
So, in the future, pensions will also continue to be adjusted based on the returns generated. This is expected to be a positive adjustment in most cases but may sometimes also be a downward adjustment. Of course, the SSPF board will try to avoid negative adjustments as much as possible through prudent investment policies. It is also expected that in more than two‑thirds (at least 67%) of the 10,000 modelled scenarios, the transition of existing pension rights into the new scheme results in a better pension outlook for all participants compared to a situation in which the fund would be ‘hard‑closed’.
Some retired participants would like to know why they cannot choose a second Collective Variable Pension (CVP) or select different investment profiles, and whether this might become available in the future.
Martin: The possibility of a second benefit collective (CVP) has been examined by the pension fund, partly in response to requests from Shell Netherlands and the CWC. While the board understands the wish to do so, the legislation is designed in such a way that there is only one benefit collective for retirees. In addition, retirees who want less risk at the time of transition are given the freedom to transfer their pension capital to an insurance company. Because the legislation is set up this way, all pension administrators have designed their systems accordingly. Adding a benefit collective is very complex and costly in terms of implementation, which is why it has not proved feasible at this time. If this changes in the future, the SSPF board will reconsider and explore this option further.
We understand that each participant will receive their own pension pot, but what happens if it is empty? Will retirees and their surviving dependants still receive a pension for life regardless of how old they are?
Martin: The simple answer is that personal pension pots in the CVP cannot go empty. That is the advantage of a collective benefit phase. Participants contribute their personal pension pots to the collective, and the risks are then shared among this group. If a participant lives longer, this risk is absorbed by the collective. After all, there are also participants who will live shorter than average lives. Each participant in the CVP therefore will continue to receive a pension for life. This basic principle remains unchanged in the new system and provides security for all retirees and their surviving dependants.
A lot can happen on the economic front between now and the transition on 1 January 2027. How will the fund ensure a good balance between the funding ratio and returns until 2027?
Martin: In recent years, the fund has pursued a clear investment strategy aimed at achieving the current indexation target. This objective will remain in place until the transition date and does not conflict with the objectives of the new pension scheme. If it becomes apparent in 2026 that additional measures are necessary, the board will certainly consider them. The primary focus will remain on the board, supported by a professional asset management company, ensuring a good balance between return and risk through careful risk management and the utilisation of expertise, so that the fund remains financially sound until and after the transition.
Achmea will discontinue its activities as a pension administration organisation. How will the transition be arranged?
Martin: Achmea will discontinue its pension administration activities in 2030. SSPF will seek a new partner for outsourcing pension administration well in advance and will ensure a smooth transition. The risks will be carefully assessed and participants will be informed of any changes in good time.
In 2026, the payment date of the pension benefit will change from September onwards to the 25th of each month, instead of the 1st. Why is the payment date changing, and will I lose three weeks of pension?
Martin: This adjustment will ensure a seamless transition to the new administrative processes and will reduce the risks and costs involved in implementation. The administrative process will become more efficient and will be in line with standard practices in the pension sector and those of most employers. Almost all Dutch pension funds pay pensions at the end of each month. This is also consistent with the payment date of all salary payments made to employees by Shell. As a result of this change, retirees will not miss out on any pension payments, but there will be a one-off three-week gap between two pension payments. Your pension will remain the same.
Martin: This is an important task for communication. How do you involve your participants in all these changes?
Debby: We communicate in many different ways and always based on the latest knowledge and insights. We present the main points early on and provide more specific details as the intended transition date approaches. We do this via websites, newsletters, mailings, webinars and, if desired, even personal consultations.
The CARE programme plays a central role here. CARE stands for ‘Comfort and Retirement Ease’ and offers e-learning courses, webinars and personal guidance, so that participants are guided step by step through what the pension changes could mean for them. I would like to invite all participants to visit the CARE website, which is full of useful information: www.care-shellpensioen.nl.
In addition, we are working together with VOEKS Welzijnsnetwerk to reach participants who are less digitally skilled, some of whom are well into their eighties. In this way, we aim to reach and support all participants throughout the transition, even though the exact individual impact is not yet known at this stage.