New Shell workers to get ‘individual’ pension scheme from 2013

Oil giant Shell plans to exclude new workers from its current final salary pension scheme from next year, and set up ‘defined contribution’ pensions for them instead, the NRC reports.


Shell says the current system is too expensive to operate and is too vulnerable to stock exchange movements. ‘That is a risk the company cannot take,’ a spokesman is quoted as saying.
Under a defined contribution scheme, the amount of pension received depends on the success of investments. Unions say the change is ‘unacceptable’. ‘Shell is moving from having the best pension system to the worst,’ said FNV official Egbert Schellenberg on the union’s website.
Returns
The arrival of the individual pension allows workers to decide how to invest the money themselves, says NRC economics journalist Menno Tamminga: ‘The downside is that not everyone is a good investor and the returns can be much lower.’
The Anglo-Dutch oil group said on Sunday it planned to close its British final salary scheme to new staff next year in order to ‘reflect market trends in the UK’.
Workers at Anglo-Dutch food group Unilever have gone on strike in Britain over similar plans.
Shell closes last FTSE 100 final salary pension scheme

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