BBC News
watch One-Minute World News
Last Updated: Monday, 1 October 2007, 17:03 GMT 18:03 UK
Shell takes a pensions holiday
Shell petrol station
Shell's pension scheme has a healthy surplus
Oil giant Royal Dutch Shell has temporarily suspended payments to its pension scheme.

The "pension holiday" is a sign the fund - one of the biggest UK pension schemes - has a healthy surplus.

Pension breaks were popular in the 1990s when schemes appeared to be well-funded, but the 2001 stock market crash left many funds in the red.

Regulatory changes have now made it more difficult to take pension holidays unless there is a substantial surplus.


A Shell spokeswoman said: "We can confirm that the Shell UK pension fund has agreed to a temporary reduction in company contributions to zero. The fund remains in a very strong position and is heavily in surplus."

The largest 200 companies have a collective surplus of 5bn, according to Aon
Improved stock market performance and increased company contributions helped close deficits.
More than two-thirds of final salary pension schemes are now closed to new members

The company did not say how much its main pension fund is in the black, but Shell has one most generously-funded schemes in the UK, into which it put 67m last year.

Company pension scheme balances have been improving after making headline news in the first part of the decade.

Stephen Yeo, a partner at the pensions consultancy Watson Wyatt, said more companies could follow Shell's lead.

"Once the company puts the money in it is very difficult to get it out," he added.

The BBC is not responsible for the content of external internet sites

Has China's housing bubble burst?
How the world's oldest clove tree defied an empire
Why Royal Ballet principal Sergei Polunin quit


Americas Africa Europe Middle East South Asia Asia Pacific