Exxon Mobil Ready and Willing to Shore Up Pension Fund
01 August 2012 (PLANSPONSOREurope.com) - While it is unclear whether Exxon Mobil will need to make additional contributions to shore up its pension fund it remains ready and willing to do so, Financial Director Henk Benne has told PLANSPONSOR Europe.
The energy giant’s pension fund Protector’s annual report revealed that its sponsors had contributed 258m euros to help bolster the scheme.
Benne told PLANSPONSOR Europe: “As the result of the rapidly falling interest rate, the discount rate became low in the Netherlands because we used the swap rate here. The coverage ratio fell below the legal requirement and as a result of the existing agreement between the fund and the sponsors the sponsors became a contribution of 258m euros in 2011.
“We won’t necessarily have to contribute further money because as the annual report also mentions at year-end we had a small surplus in the fund which was returned in 2012 to the sponsors and the same happened in 2010. At that time we had a surplus of 153m euros in the fund and that surplus was also returned to the sponsors. We have a rather unique funding arrangement where the company has agreed to shore up the fund to meet the legal requirement but if we have excess funding then the fund will return the surplus to the sponsors.
“The current position is that the sponsor is both willing and able to support its pension funds and make the payment when necessary and it expects to receive the surplus in return. Not many companies are willing and able to support their funds in this manor but it is a long standing agreement between the Dutch pension fund and sponsors and has served us both well over the years.”