Your pension, your future
Love your future. Shell Pension.
Your pension, your future
Love your future. Shell Pension.

November 2020

Risk management system

Three lines of defense

The risk management system has a "first, second and third line of defense". The responsibility for risk management rests with the person who is primarily responsible for the relevant process. This is the "first line of defense" - the first line of defense - of board risk management.
As a second line of defence, SSPF has set up a risk management process. The SPN Finance Department independently checks whether the controls to be carried out by the first line have been properly implemented and whether the control measures are effective. For this they use the Risk and Control Self Assessment (RCSA) cycle. The RCSA determines the likelihood of a threat occurring and the potential impact thereof. The design, organisation and operation of the system are also periodically evaluated. A self-assessment is carried out at least every three years, during which the design and operation of the entire risk management system is evaluated,  this is reported to the board and the Dutch Central Bank.

Key functions
One of the board members has been appointed by SSPF as 'key risk management function holder': the portfolio holder risk management on the board. The Finance Manager of SPN  fulfils this risk management key function and supports the key function holder in the execution of the second-line tasks. Execution of the second-line tasks. The board is part of this risk management process and determines the outcomes in terms of substantive changes and risk classification and acceptance.

The third line of defence is formed by Shell Internal Audit, which carries out periodic audits at SPN and SAMCo. Since 2020, the management board has also appointed a key function holder Internal Audit  who ensures that the audit and assurance process is well managed and reports to the board. The SSPF control framework also builds on the controls of the implementing organisations: SPN, APS and SAMCo. Each of these organisations has set up the 'three lines of defence' in order to manage the risks for their own organisation.

Risk management process

As a second line of defence, SSPF has set up a risk management process. The SPN Finance Department 

This process provides a control framework that is appropriate to the fund's profile and the risks  to which the fund is exposed. Each year, the board evaluates the control framework. In 2020 several adjustments were made to further fine-tune our risk management and to adjust it to the changing circumstances, including an update of the controls around communication risks and controls with regard to the implementation of the Own Risk Assessment (ERB).

The risk management framework is being developed continuously and adapted where necessary. In 2021, SSPF will carry out an ERB for the first time. In addition, climate risks and the consequences of the legal interpretation of the Pension Agreement will be given special attention. SSPF sees dozens of financial and non-financial risks, the most important of which are explained below.

Good to know

The risk management framework is being developed continuously and adapted where necessary. In 2021, SSPF will carry out an ERB for the first time. In addition, climate risks and the consequences of the legal interpretation of the Pension Agreement will be given special attention. SSPF sees dozens of financial and non-financial risks, the most important of which are explained below.