Stichting Shell Pensioenfonds, The Hague, Netherlands chose BlackRock as its outsourced CIO, covering about €27 billion ($30.1 billion) in assets and more than 30,000 participants.
BlackRock will provide strategic advice and management of the investment portfolio, will select and monitor investment managers and carry out balance sheet and risk management — which includes interest-rate and currency hedging, a news release said.
Assets are expected to transfer to BlackRock by mid-2025.
The money management giant, which has $10.65 trillion in assets under management, will also support the pension fund in integrating responsible investment, and in the huge transition underway in the Netherlands in which the traditionally defined benefit retirement system moves to a defined contribution model.
A BlackRock spokesperson confirmed that no employees from Shell will transfer, bucking a recent trend among large pension funds to shift not just assets to OCIOs, but also in-house pension fund staff.
"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,” Kenan Yildirim, director at the Shell pension fund, said in the release.
“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. In addition, our participants will benefit from BlackRock’s expertise global scale and experience in risk management and sustainability.”
The Dutch pension fund system is undergoing big changes.
The Future Pensions Act was approved by Dutch government in May 2023, and will shift the DB system toward DC. Pension funds that do not move to a DC arrangement will enter into run-off — operating as DB and paying benefits, but without an expectation of further contributions or accrual. Occupational pension funds must submit their transition plan to the government by Jan. 1, 2025, and moves must be completed by Jan. 1, 2028.
A Shell spokesperson added that the priority is to safeguard and future-proof the pension funds for staff. "In light of recent changes to Dutch pensions legislation, the Shell pension fund is working on a transition plan. At this stage we can't comment further," the spokesperson said.
“Issues are becoming more complex by the day, driven in part by the transition to the new pension system and the increasing focus on sustainability,” said Monique Donders, country manager, BlackRock Netherlands, in the release. “Our strong local fiduciary team with in-depth knowledge of these issues can lean on the strength of our international organization. It is our ambition to be the transition partner of choice for our existing and new clients. Globally, investors are looking for strategic partners who can add value and do more for them. We are looking forward to working together with Stichting Shell Pensioenfonds during the pension transition and in the years to come."
