SABIC’s employer(s) and trade unions have concluded a new pension agreement for the period 2019 through 2023. The main adjustments to the basic pension scheme are the increase in the pension calculation age to 68 and the associated increase in pension accrual to 1.875%. On January 1, 2019, all accrued retirement pension entitlements with a different pension calculation age were converted into retirement pension entitlements with a pension calculation age of 68. It was further agreed to continue the risk attitude and current contribution level of 25.5% of the wage bill for the period 2019 through 2023.
In the fourth quarter of 2018, the Fund tested the new pension agreement for lawfulness, enforceability, and sustainability and decided on that basis to implement it with effect from January 1, 2019.
As the existing administration agreement between SABIC and SPF expired at the end of 2018, the year partly revolved around preparing for a new administration agreement for a five-year period from 2019. SABIC and SPF signed the new administration agreement on November 2, 2018.
The Service Level Agreement between SPF and DPS also expired at the end of 2018. At the end of 2017, SPF's board established a working group which was tasked with negotiating a new share of turnover (DVO) with DPS. SPF has sought support from a third party and has carried out a benchmark study regarding quality and costs. The intensive negotiation process between the working group and the DPS resulted in the signing of a new DVO for the period 2019-2023 on November 2, 2018.
The United Kingdom’s withdrawal from the European Union is planned for 2019. The Board is investigating the consequences of a hard Brexit for the pension fund and taking the necessary measures to mitigate these consequences as much as possible. Issues such as central clearing and contracts with external asset managers are receiving the highest attention and are a top priority for SPF.
The incorporation of IORP II into national legislation is planned for early 2019. This is European legislation on matters including organization (Governance) and communication in relation to pension funds. Such matters were already well organized in the Netherlands, but we now need to adapt to the new rules which will require considerable work. Measures have been taken by SPF to comply with the new legislation. This will be done behind the scenes, and members will not experience any noticeable change or inconvenience. The changes relating to communication: the next UPS must feature the funding level, pension age, and contribution, among other things. Further-reaching changes are expected for the 2020 UPSs, and three pension scenarios will be shown: expected, pessimistic, and optimistic.
Biennial survey of all SABIC employees. We hope you completed the questionnaire to provide us with feedback on how we can further improve our communications.
The scheme will be extended and improved with effect from July 1. The employees in question will receive an information pack by e-mail. We will also be holding a number of webinars on June 5. A personal letter will be sent out in early June.