Jaarbericht 2016 CONTENTS

“Last year was not easy.” SFP Chair Jo Mastenbroek is very clear in his reflection on 2016. “Over the year, we were concerned that we’d need to make end-of-year curtailments to retirees’ pensions and to the pension accrual of active and deferred members.

2016 was a challenging year
for SPF


Thankfully, however, the financial markets had recovered slightly by the end of the year, which helped us tide over and avoid making curtailments. Looking at our calculations, we still think that we’ll be able to realize the pension fund’s ambition of offering an indexed pension on the long term. However, this does not alter the fact that we’ve been unable to achieve this for some years now and that we expect either no or only partial indexation in the foreseeable future.”

Deputy Chair Guido Croonen points out SFP's good return in 2016, having achieved 8.6% on the pension capital. However, the drop in interest in 2016 meant that this good return did not lead to an increase in the funding level. Croonen explains, “We ended 2016 in a relatively healthy position, having begun the year at a funding level of 108.4%. This then dropped to 97.7% and rose again to 106.8% at the end of the year. We have also achieved another good return in the first quarter of 2017. The question now is whether this trend will continue throughout the year. However, it needs to be said that a good return does not mean that we’ll soon be able to index again fully.”


In 2016, SPF's Board devoted a great deal of energy and attention to managing the risks that a pension fund is faced with. “These aren't just financial risks, by the way,” explains Mastenbroek. “We also looked at outsourcing tasks to pension administrator DPS and examined the current IT risks. As it’s extremely important to have financial expertise, the Board decided to take on a new external investment advisor last year. In addition, following the departure of Cor van der Sluis as an external member of the Board, the Board has welcomed a new professional external member, Marcel Roberts, who will bring a wealth of knowledge about asset management and investments.”


DNB and Investment Policy

An investment study conducted by De Nederlandsche Bank (DNB) at SPF also highlighted SPF’s sound approach to investment policy and risk management. Jo Mastenbroek is delighted with the positive result. “DNB said we should be pleased with the result, adding that the study did not give reason for SPF to implement any major measures.”
The Board also closely inspected the fund's investment policy again last year, but this did not lead to any significant changes. The fund still looks to achieve a good return at an acceptable risk level. For instance, SPF will invest more in Dutch mortgages with a favorable risk-return profile. The investment policy for Socially Responsible Investing (SRI) will also be revised this year.

Changes to the board

SPF's Board was subject to further changes in 2016. Frank Mortier, the former Chair of SPF, has left the pension fund. Leon Jacobs has been appointed as a member of the Board, having been approved by DNB. Jacobs is an employer member of the Board. Over the past couple of years, he has been participating in the fund's program of succession planning and said he was ready to take on a position on the Board. Guido Croonen stresses that the appointment Leon Jacobs is an indication of the success of SPF's program for succession planning. “Continuity on the Board is crucial.”



In 2016, the Board devoted its attention to thinking about the future of the pension fund. Jo Mastenbroek explains, “We looked into whether the fund is viable and will remain so in the medium term. After all, pensions and legislation never stay the same, and we have noticed that pensions are becoming more and more individualized. These developments can have major consequences for the performance of a pension fund. Smaller funds are finding it increasingly difficult to operate with an acceptable cost structure.” Guido Croonen adds, “Although SPF is by no means in the danger zone, the Board is eager to start thinking about the future of the fund in good time. We want to be well prepared for the developments we’re predicting.” The Dutch government is set to announce a new pension contract in 2017, which will entail far-reaching changes to pensions. In 2017, the Board will sit down with the social partners – employers and labor unions – to discuss how the fund can best prepare itself for new developments. There needs to be some clarity on this point if the pension agreements between the labor unions and employers expire and need to be renewed at the end of 2018.


Common interest

Jo Mastenbroek and Guido Croonen are pleased with how the Board members work together and with the working relationship between the Board and the Accountability Council following the merger of Stichting Pensioenfonds SABIC IP and SPF.

Jo Mastenbroek en Guido Croonen
"We now have one Board and Accountability Council in which members of all Dutch SABIC offices feel they are effectively represented with one common interest."

SPF's Board is closely involved in communications to all groups of members of the fund. “We want to provide members with comprehensible information about their pensions at SPF,” says Guido Croonen. “In 2016, this was achieved by organizing several information meetings in Bergen op Zoom, Sittard, and Geleen, as well as a number of Lync sessions. Participants have ample opportunity to ask questions during these sessions. I’m delighted to see interest from retirees as well as from an increasing number of active members. This is a positive development. Besides these meetings, we’ve conducted numerous personal pension consultations with members.”
The annual members’ survey also revealed that members are satisfied with communication from SPF. 76% of our members said they had confidence in the fund, and 92% said they received sufficient information.



Looking back at last year, the Chair and Deputy Chair saw SPF make a good return in 2016. Administration and management are healthy, and we have enough people sitting on the Board and advisory committees. Besides that, the first months of 2017 have shown a continuation of the positive financial development.
Nevertheless, the Board will have to deal with some tricky pension issues in 2017 as well. In the spring of 2017, De Nederlandsche Bank informed SPF that the PPS regulation is out of date. The Board will meet to discuss this point and decide whether the current pre-pension saving scheme (PPS) needs to change.
Alongside this, the fund plans to make further preparations for future developments in pensions, formulating strategies where necessary.