YOUR SHELL NET PENSION

Transcription

1 YOUR SHELL NET PENSION if your pensionable salary per year exceeds the fiscal upper income limit Welcome to the Shell net pension scheme. Government has set a fiscal limit on the amount of gross annual income that can be used to accrue a pension. Above this limit only net income (after income tax) can be saved towards a pension. Pension benefit is not taxed after retirement: a net pension. Read more about accruing pension capital towards the net pension and the advantages of the Shell net pension scheme in this brochure. Shell Nederland wants to provide you with a good pension scheme where it remains possible for you to accrue an adequate pension, also over that part of your pensionable salary above the fiscal limit. A scheme in which dependants are well covered in the event of your death and which provides continued pension capital accrual above the fiscal limit in the event of full and permanent disability. Therefore Shell has set up a net pension scheme for employees on pensionable salaries that exceed the fiscal limit. The Shell net pension scheme makes optimum use of the possibilities provided by the tax legislation. Shell thereby ensures that you achieve the maximum permitted accrual. The entire contribution goes towards your pension, without any deduction of operating costs or profit margins. Who is it for? The net pension scheme is intended for participants whose annual salary will exceed the permitted fiscal limit. Calculation of the accrual is different for the SSPF and SNPS pension schemes and therefore the fiscal limit is also different: 1. You entered company service before July 1, Then you are a participant in Stichting Shell Pensioenfonds (SSPF) and for you the permitted fiscal limit is 92,600 (level 2015). 2. You entered company service after July 1, Then you are a participant in Shell Nederland Pensioenfonds Stichting (SNPS) and for you the permitted fiscal limit is 88,500 (level 2015). The net pensionscheme is voluntary. You may choose not to participate. However, Shell assumes that you will want to participate in the Shell net pension scheme for your salary that exceeds the fiscal limit. If this is the case you do not need to take any action, you are automatically a participant. Further on you can read what you need to do if you do not wish to participate in the net pension scheme. What is a net pension scheme? The net pension scheme is an individual defined contribution scheme. This means that contributions from the portion of your salary that exceeds the fiscal limit of 88,500 are saved individually towards your pension capital. Monthly contributions are invested, which always involves some investment risk. Your accrued pension capital develops based on the monthly contributions and the yield on investments. Your accrued pension capital is not subject to income tax in box 3 (capital gains tax). When you reach retirement you use your accrued capital to purchase a lifelong retirement pension and partner s pension, if desired.

2 Your Shell net pension scheme from SNPS Shell Nederland Pensioenfonds Stichting was established in Participants in an SNPS pension scheme can log into their personal area at mijnnettosnps.nl to, for instance, keep their details up to date, follow developments in their accrued capital and indicate their investment preferences. In the Shell net pension scheme you accrue capital for your retirement pension. Furthermore, your dependants and the consequences of possible incapacity for work are well covered. Retirement pension You accrue pension capital for a retirement pension. During the accrual period the sum of your pension capital is not subject to income tax in box 3 (capital gains tax), so you don t need to declare it when submitting your income tax return. From your retirement date you will receive net pension benefit payments (not subject to tax) from the pension insurance company of your choice. You will receive retirement pension as long as you live. Surviving dependant s pension In the event of death in service your partner and/or children will receive a surviving dependant s pension. Your partner will receive this partner s pension for life and it will be paid net (not subject to tax). Your children will receive a net orphan s pension until their 18th birthday. Children who are studying are entitled to an orphan s pension while they are studying (up to September after their 24 th birthday). Disability In the event of (partial) disability your net contribution payments are continued, during which you are exempt from making contributions. Therefore SNPS continues to pay your pension contributions in the event of (partial) disability. Who pays the contributions? Net pension scheme contributions comprise an employer and employee component. The maximum permitted contribution is age-related and determined by law. Contributions increase as retirement draws nearer, this takes place in steps of five years. You contribute 2% from the portion of your salary that exceeds the fiscal limit, regardless of your age. The rest of the permitted contributions are being paid for by Shell. You receive a gross allowance for this on your salary above the fiscal limit. After the deduction of income tax the entire net contribution is being invested in the pension scheme as a net amount.

3 Costs SNPS is non-profit making. The Shell net pension scheme makes optimum use of the possibilities provided by the tax legislation. Your entire contribution goes towards your pension, without any deduction of operating costs or profit margins. You only pay the investment costs incurred in the investment of pension capital. These costs are deducted from the return on investment. SNPS is able to keep these costs as low as possible by making collective investments. For more information about costs visit mijnnettosnps.nl. Risk contributions The necessary risk contributions to insure against disability (continued monthly net pension accrual if you become fully and permanently disabled) and death in service (partner s pension and orphan s pension), are abstracted from the contribution. Collectivity keeps these risk contributions low for SNPS. Insight into pension capital To gain an insight into your accrued pension capital and expected pension income visit your personal area of the participants portal mijnnettosnps.nl where you can see how your pension capital is growing on a monthly basis. Furthermore, once a year you will receive a Uniform Pension Statement regarding the net pension scheme. It shows the sum you have accrued for your net pension. You can also find this statement at mijnnettosnps.nl. Retirement On your retirement date you use your accrued pension capital to purchase a retirement pension from the insurer of your choice. This retirement pension is paid out net of tax on a monthly basis; it is not subject to further taxation. You may also decide to purchase a partner s pension. Naturally this reduces your retirement pension. This partner s pension is also paid out net of tax. Pension choices Your SNPS net pension scheme has many possibilities and you are fully in control. However, some personal events may affect your pension. To find out what possibilities your net pension scheme offers and what kind of impact events can have, please visit mijnnettosnps.nl or contact the pension service desk. Life cycle profiles Contributions paid into the pension scheme are invested in a mix that includes equities and bonds. This investment mix is called a Life cycle profile and is geared based on age. At a younger age there is relatively more investment in equities and more in bonds at a later age. In this way, fluctuations in the projected income for later due to increases or decreases in interest are reduced as you get older and therefore closer to your retirement date. SNPS has three types of Life cycle profiles: Offensive, Neutral and Defensive. By default, your contributions are being invested based on the neutral Life cycle profile at SNPS. You have the option to align your investments with your risk profile or consciously deviate from this. You can find more information about capital accrual within the Life cycle profiles and the underlying Life cycle portfolios at mijnnettosnps.nl. Your net pension, no defined final sum The sum of accrued pension capital and the pension benefit that you can purchase with it depends on several factors. The main risks that play a role are the following. Contributions are being invested so that they achieve a good yield. We refer to uncertainty about expected yields as investment risk. You are also dependant on the market rate of interest at the time that you purchase your pension: the interest-rate risk. Furthermore, the tariffs that pension insurance companies use can change over the course of time. Because of life expectancy increasing more than expected, for example. We call this the longevity risk.

4 You may retire between the ages of 55 and 67 Retirement age The target retirement age is 67. You may retire between the ages of 55 and 67. With your manager s consent you may also choose to continue working and defer your pension (up to a maximum age of 70). Three months before your retirement date you will receive a letter from SNPS explaining the pension commencement procedure. This will be accompanied by a projection of how much pension capital will be available to purchase your pension at your retirement date. For more information If you have questions about the SNPS net pension scheme after reading this brochure you will find key information and answers to Frequently Asked Questions at snps.nl. We can be reached by pensioenfonds@shell.com and also by telephone on weekdays from 8:30 to 17:30 on (070) From April 2015 our new contact details will be: snps@achmea.nl and telephone

5 What you need to do Participation Unlike your regular pension scheme up to the fiscal limit, participation in a net pension scheme is not mandatory. However, Shell assumes that you will want to participate in the Shell net pension scheme for salary that exceeds the fiscal limit. If this is the case you do not need to take any action, you are automatically a participant. Participants can cancel at one month s notice. In that case, the contributions already paid in will remain earmarked for the net pension. Opting out If you do not want to participate in the Shell net pension scheme from the outset you can fill in a form. You can find this form on the SNPS website. To download the form, you have to be logged in on the Shell network. If you don t have access to the Shell network, you can request the form with HR services. In that case Shell pays the gross allowance to you, minus tax, with your salary each month. Then you will not accrue pension on the portion of your salary that exceeds the fiscal limit and you will not accrue a surviving dependant s pension on that portion of your salary. Furthermore, pension capital will not continue to accrue above the fiscal limit if you would become fully and permanently disabled. Participate later or re-joining? You may also decide to participate when your pensionable salary is higher than the fiscal limit. Or later. Refraining from immediate participation in the net pension scheme means that you cannot join for a one year period. Also, if you stop participating and decide to participate in the scheme again, the earliest that you can do so is one year after you stopped. Bear in mind that joining later or re-joining may be subject to a medical examination. Important Are you cohabiting? If you, as participant in the net pensionscheme, would die before your retirement date your partner will be eligible for a surviving dependant s pension under certain conditions. If you are married the partner s pension is automatically included in the insurance, but if you are cohabiting you must enrol your partner with SNPS for the net pension scheme yourself. Are you working abroad? If you are working or living abroad, SNPS will not usually be informed about changes in your personal situation automatically. Therefore it is important that you inform SNPS of changes yourself. Also, as an expat you don t pay Dutch tax on your gross pension contributions. A hypothetical 52% tax is withheld on gross contributions made by Shell to ensure that employees abroad have the same net outcome as employees in the Netherlands. Therefore you receive the same amount of net contributions abroad as you would if you worked in the Netherlands. It is not possible to pay contributions into the net pension scheme prior to the deduction of the hypothetical taxation, regardless of whether a fiscal treaty applies.

6 Shell net pensionscheme Participating in the Shell net pensionscheme has the following advantages: Accruing capital in the Shell net pension scheme is more advantageous than doing it yourself: a. SNPS invests collectively and can therefore keep investment costs considerably lower than they would be if you if you were to invest by yourself. b. SNPS is non-profit making and does not deduct operating costs. c. Tax exemption: your accrued net pension capital is not subject to income tax in box 3. Dependants receive a good surviving dependant s pension, also on the portion of pensionable salary above the fiscal limit. You continue to accrue pension capital on the portion of salary above the fiscal limit, even if you are unable to work due to full and permanent disability. Immediate participation, no medical examination necessary. You can cancel with one month s notice. SNPS has a special helpdesk for the Shell net pension scheme. This means that you can rest assured that any questions you may have will be addressed personally and professionally. Considerations to waive participation in the Shell net pensionscheme: You have other sources of income. You think it s not necessary to build a net pension, besides your gross pension. Your partner earns sufficiently and you don t need insurance for a partner s pension. Maybe you don t even have a partner. Your salary is close to the fiscal limit and you don t expect a significant salary increase. If you don t deposit the net pension contribution in your pension, but have it paid with your salary you are free to use that money in any way. The Board has outsourced the administration and asset management of the pension scheme to Syntrus Achmea. However, the Board of SNPS remains ultimately responsible for the diligent and timely administration of the pension scheme. This brochure is a simplified explanation of the net pension scheme at SNPS. No rights may be derived from this brochure. The Pension Regulations contain the official legal wording of the net pension scheme and this prevails. The Pension Regulations can be downloaded at snps.nl. The companies in which Royal Dutch Shell plc has direct or indirect participating interests are separate legal entities with their own identity. In this brochure, the collective term Shell is used to indicate the various Shell employers and joint ventures affiliated with Shell Nederland Pensioenfonds Stichting. March 2016 mijnnettosnps.nl