SNPS. Smarten up your future
Annual Report 2020 – Shell Nederland Pensioenfonds 
Your pension, your future
Love your future. Shell Pension.

November 2020

Environmental risk

Main non-financial risks

The environmental risk is best defined as developments in the environment that conflict with the interests of, or have far-reaching consequences for, the pension fund. 

These include the impact of developments in the employer’s financial position (leading to carry-over risk), the lack of balanced representation of interests as a result of dominance by the employer or dominance by the employer’s appointed managers, and the influence exercised by the employer over the pension fund’s policy.

Risk of regulatory change

The risk of changes in laws and regulations (‘risk of regulatory change’) concerns the possible adverse effects on the fund of increasingly more laws and regulations changing more rapidly and overlapping each other. This can lead to different valuations, different and/or more compliance obligations and may even have a direct impact on the future of the fund. Take, for example, the (draft) legislation concerning the Pension Agreement.

Both risks mentioned above are proactively monitored under the supervision of the board so that the impact can be determined in a timely manner. Wherever possible, the decision-making process is taken part in under the direction of the board. This is done through participation in consultation structures and active involvement in and through industry organisations and civil society organisations.

“The risk of changes in legislation and regulations (‘regulatory change risk’) concerns the possible adverse consequences for the fund of increasingly more, faster and overlapping and changing laws and regulations”

Outsourcing risk

The outsourcing risk concerns the risk that the continuity of business operations, integrity and quality of the external service providers is insufficiently guaranteed. Continuity, confidentiality and good quality of service are paramount in the execution of core activities. The interests of participants and other stakeholders should not be jeopardised by such outsourcing.
The outsourcing risk is reduced by a solid outsourcing policy, outsourcing contracts and contract management. Independent assurance is obtained periodically.

IT risk

The IT risk is the risk that business processes, IT infrastructure and information provision lack sufficient integrity or are not continuously or sufficiently secured. A significant part of the critical IT systems is outsourced to third parties, rendering the IT risk an outsourcing risk to a large extent.

Integrity risk

This is the risk that the fund's reputation will be affected as a result of unethical, unethical behavior by the organisation, employees, policymakers or co-policymakers, managers or service providers. SNPS carries out a systematic integrity risk analysis (SIRA). Eleven specific integrity risks with associated control measures have been described that are operationally tested, including the conditions formulated in the outsourcing policy.