Shell to Outsource $30B Pension to BlackRock

BlackRock has announced that the $10 trillion asset manager was selected as the outsourced fiduciary manager of Stichting Shell Pensioenfonds, the defined benefit pension fund of Shell plc. Shell will outsource asset management of its 27-billion-euro ($30 billion) fund entirely to BlackRock.

As of August 31, SSPF had a funded status of 134.5%, well above the fund’s minimum required funding ratio of 105%. As of December 31, 2023, the fund had 5,206 participants, 6,468 former participants and 18,160 beneficiaries who joined the company before July 1, 2013, and are based in the Netherlands.

The transfer of Shell’s pension assets to BlackRock is expected to be completed by mid-2025.

Asset management for Shell’s Shell Nederland Pensioenfonds Stichting pension fund in the Netherlands, for employees who joined the company on or after July 1, 2013, will remain unchanged under Achmea Investment Management, according to Shell.

For more stories like this, sign up for the CIO Alert daily newsletter. 

Globally, more than $300 billion of assets have been transferred to BlackRock’s OCIO business to date. BlackRock was named a winner in the asset management and servicing OCIO category at the 2023 CIO Industry Innovation Awards.

As a part of the outsourcing, Shell’s pension will move to a defined contribution model, as required by the Netherlands Future Pensions Act. BlackRock will assist in the transition to the new pension system. A spokesperson for Shell could not be immediately reached for comment.

Future Pensions Act

Shell’s appointment of BlackRock as its fiduciary manager comes as the Netherlands plans a complete overhaul of the country’s pension system by the end of the decade.

As part of the Dutch Future Pensions Act, which came into effect in July 2023, all defined benefit plans are required to switch to a defined contribution system. Pension funds based in the country have until January 1, 2028, to make the switch.

“In light of the developments regarding the Future Pensions Act and the request from our social partners to transition, the Board has decided, after a careful selection process, to appoint BlackRock as fiduciary manager for SSPF,” said Kenan Yildirim, director of Stichting Shell Pensioenfonds, in a statement.

The law requires defined benefit plan sponsors to submit a transition plan by January 1, 2025.

“In anticipation of the upcoming changes, the appointment of BlackRock will safeguard the execution of the investment process and ensure that the costs and risks of the transition are carefully managed,” Yildirim continued in the statement. “In addition, our participants will benefit from BlackRock’s expertise, global scale and experience in risk management and sustainability.”