Participant Jos Hooft talking with SNPS board member Eveline Smeets

double interview

The new Future Pensions Act (Wtp) brings about major changes. But...will these also affect (SNPS) pension fund participants? And what can you do to adequately prepare for your old age? SNPS participant Jos Hooft (Product Manager Ethylene Oxide, TOPS Shell programme participant) is posing these questions and more to SNPS executive board member Eveline Smeets (Head of Actuarial Affairs).

Jos: "Hi Eveline, how is our pension in the Netherlands going to change?"

Eveline: "In the system we are headed for, you are guaranteed a monthly contribution. However, the amount of your pension on your retirement date is not fixed. Your pension amount depends on the pension contributions deposited by you and your employer, the results achieved from the investments we make and other decisions you make such as when you retire."

Jos: "And how will this affect us as SNPS participants?"

Eveline: "As an SNPS participant, you will not notice it as much because the SNPS scheme has been operating this way for quite some time now. Ten years ago, Shell already made the decision to move towards a scheme in which the participant themselves were given more insight and influence over their own pensions. For example, you can choose how risky your contribution is being invested."

Jos: "What was the trigger for all of this, 10 years ago?"

Eveline: "The trends in our society had been apparent for some time. Our life expectancy is rising: on average, we are getting a fair bit older than 25 years ago. That means we have to pay out pensions for longer than previously anticipated. And an ageing population means we have more over-65s on fewer and fewer working people. This made pensions increasingly expensive and we had to find a solution. So the key question was: how can we solve this in a fair way, both for the employees and employers and for our government?"

Eveline Smeets

Jos: "Fair enough. Which particular change are you most happy with?"

Eveline: "I am particularly pleased with the transparency of the new system. Participants have to take responsibility for their own financial future, while the good things from the old system, such as joint bearing of risks, are safeguarded. In the current system, people do not understand how their pensions are accrued and why those may or may not increase. That is exactly what I try to achieve in my daily work: communicating that pensions are actually not that difficult at all. You pay contributions and those are invested for you. The contributions and the return from investments are added to your personal pension pot. Form that pot you will receive your monthly benefit. I feel the biggest challenge, but, having said that, also the positive aspect from the new system, is that it becomes more transparent. You can follow how your own pension pot develops. I think it also ties in well with what the new generation wants: you don't stay with the same employer for 40 years, you change employers or at times you are self-employed. In that case, you yourself want to be able to keep track of how your pot is doing."

Eveline: "And now I'm curious! What made you so keen to join the TOPS programme (Talent Development Pension Funds Shell)?"

Jos: "For those who don’t know: TOPS is a pool of (former) Shell employees who, in addition to their jobs, knowledge is imparted of pensions to perhaps play a future role in one of the funds' bodies. What appealed to me was the ambition to deliberately bring more diversity within the (pension) boards. Our group is drawn from different age groups, disciplines and Shell locations. That works tremendously well."

Jos Hooft

Eveline: "And what do you find specifically interesting to learn?"

Jos: "As a board member, it is quite a complex task to properly assess all interests. One of the things I really enjoy is that we deal with cases which represent a challenging dilemma. When you ask my generation whether they think it is important for pensions to be invested in a socially responsible way, almost everyone agrees. Making that feasible and applying it to a very diverse reality is a pretty difficult task. Nevertheless, a great challenge for the Shell funds and I also think it is important for both board members and the Accountability Body to have this high on their agenda. What also spurs me on is the fact that, on average, women are less concerned with financial security and also invest less, for example. Why is that? Why don't more women chat over drinks about the best investments and financial security - and therefore your pension? This is where I would like to make a difference.”

Jos: "What tools would you recommend for participants to view and plan their financial situation?"

Eveline: "I would start with getting a proper insight. There is a lot of information on our website shellpensioen.nl or at mijnpensioenoverzicht.nl. It starts with understanding what you are already accruing. Then you can set this off against what you think you will need after retirement. Shell Netherlands employees also have the option of an individual interview with a pension adviser. This way, you find out whether you are actually already well on your way or whether you still need to make further arrangements."

Eveline: "Do you have any additional advice for your fellow participants?"

Jos: "There was a good reading tip in the latest Own it magazine from Shell Pension: 'How to Worry Less About Money' by John Armstrong. It gets you thinking about your attitude towards money and makes you aware of what your perceptions about finances are. Is it something enjoyable, does it stress you out, how much is sufficient and what did you unconsciously learn about financial matters from your parents? It helped me to make more conscious decisions for the longer term including retirement planning."

Eveline: "Quite right. Worrying about nothing is a waste. Make sure you get a proper insight!"