UK – Oil giant Shell plans to contribute an estimated $1.4bn (€1.1bn) to its defined benefit pension plans this year.
“The group has certain obligations that are not contractually fixed as to timing and amount, including contributions to defined benefit pension plans estimated to be $1.4 billion in 2005,” the company stated in a filing to the US Securities and Exchange Commission.
It added that the actuarial valuations of its four main pension funds in aggregate at the end of 2004 would show an “increased surplus of assets over liabilities compared with the end of 2003”. This was mainly the result of investment performance during 2004.
It said: “These actuarial valuations, rather than the group accounting policy FAS 87 measure are the basis on which the funds’ trustees manage the funds and define the required contributions from the member companies.”
It added that the company’s proposal to raise the retirement age to 65 for members of its Dutch scheme, Stichting Shell Pensioenfonds, would be further assessed in 2005. The plan, which was unveiled last year, had raised the anger of unions.
Shell now says: “Details of the proposal and its effects will be assessed further during 2005.”
Last week IPE reported that Stichting Pensioenfonds ABP, the largest Dutch fund, expects it could receive compensation from Shell following US legal action relating to the oil giant’s overstatement of its reserves.
Meanwhile, Shell’s rival oil firm BP has said it plans to contribute €465m in pension contributions this year.
“The aggregate level of contributions in 2005 is expected to be approximately $600m,” the group said in its 2004 annual report released last month.
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