Questions and Answers about the transition to a single pension scheme for SABIC in the Netherlands

In 2013 SABIC started the process of harmonizing the pension schemes of the SABIC companies in the Netherlands. Since then, a number of steps have been taken towards this objective. Since 1 January 2014 there has been a single pension scheme with a single pension fund (SFP) for all SABIC employees in the Netherlands. On 31 December 2014 the pension entitlements and pension rights of Stichting Pensioenfonds SABIC Innovative Plastics (the former pension administrator of the employers SABIC Innovative Plastics B.V. and SABIC Global Technologies B.V.) were transferred to SPF by a collective value transfer. They were used to purchase pension entitlements in the SPF pension scheme with a pension age of 67. As a final step in this harmonization process, the pension entitlements accrued with SPF up to the time of the collective value transfer (in some cases with different pension ages) will be converted to pension entitlements under the latest SPF pension scheme by an internal collective value transfer (conversion) on 1 January 2016. This internal collective value transfer is also called a ‘conversion’ for short.

In November 2015, SPF sent all those concerned a personal letter informing them about the transition. One letter was sent to members actually affected by the conversion (active members, deferred members), one letter to disabled members and one letter to the remaining members (pensioners and members of the former Pensioenfonds SABIC-IP). The letters refer to more detailed information in the form of Questions and Answers.

SUMMARY OF THE QUESTIONS AND ANSWERS (click on the question to go straight to the answer) CONVERSION Why are the pension entitlements being converted to a single pension age? What is the effect of the conversion? How is the amount of the pension after conversion calculated? Why is the retirement pension different after conversion? When will the pensions actually be converted? PENSION AFTER CONVERSION Can I still retire at 65 when my pension has been converted? How does the conversion affect my PPS benefit? How might the entitlements to retirement pension be affected if they are not converted? Does the conversion affect the pre-pension capital? How does the conversion affect the partner’s pension, temporary partner’s pension and orphan’s pension? How can I see my new pension situation (after conversion)? What effect will the conversion have on the pension entitlements of my former partner(s)? OBJECTION How and until when can I object to the conversion? How do I object to the conversion? DISABLED How does the conversion affect disabled members? How does the conversion affect my disability pension benefit? ADVANTAGES / DISADVANTAGES OF CONVERSION What are the advantages and disadvantages of conversion? MISCELLANEOUS How are the employer SABIC and the social partners involved? The conversion has also been reported to De Nederlandsche Bank (DNB). Has DNB already expressed an opinion about it? I have not received a letter about the conversion, although I accrued pension with SPF in the period up to and including 31 December 2013. Who should I notify? MORE INFORMATION Where do I find the current pension regulations? What do I have to do myself? Information sessions? Any questions?

Questions with Answers 1) Why are the pension entitlements being converted to a single pension age? The aim of the internal collective value transfer (conversion) is to convert the existing different pension ages (65, 66 and 67) to a single pension age (67), while maintaining the relationship between the retirement pension, partner’s pension, temporary partner’s pension and orphan’s pension. Making this change will improve the administration of the SPF pension scheme, create more uniformity between the pension entitlements and rights of SABIC employees in the Netherlands and make the personal pension situation clearer and easier to understand for the members and deferred members. It will also bring the pension age and the partner’s pension into line with the new AOW age. The conversion affects the pension entitlements accrued by the employees and former employees of SABIC Europe B.V., SABIC Limburg B.V. and SABIC Capital B.V. The pension entitlements of employees and former employees of SABIC Innovative Plastics B.V. and SABIC Global Technologies B.V. will not be involved in the internal collective value transfer (conversion) as these entitlements were already converted in a similar way to a pension age of 67 by the collective value transfer of Pensioenfonds SABIC IP to SPF on 31 December 2014. The new regulations already apply to them. The conversion will not affect the total value of your pension, so you will not lose any money. After the conversion your pension statement will give a clearer and more comprehensible picture of your pension situation: your full pension will then be calculated with a pension age of 67. The conversion does not mean that you cannot retire until you are 67 either. You still have the option to retire at any age between 60 and 67, as well as all of the other options (for example exchange and high/low). You can object to the conversion, but you must do so within six weeks of the date of the letter. Back to the questions

2) What is the effect of the conversion? The conversion converts the retirement pension at a pension age of 65 and 66 to a retirement pension at a pension age of 67. After conversion, the new regulations apply and the relationships between retirement pension, partner’s pension and temporary partner’s pension remain the same. The partner’s pension after the internal collective value transfer (conversion) is 70% of the retirement pension. The temporary partner’s pension is 14% of the retirement pension. The supplementary partner’s pension is not included in the conversion as it is not linked to a pension age. After the conversion of pension entitlements at a pension age 65 or 66 to a pension age of 67, members and deferred members can still choose to take their pension on the original start date (or another date). The conversion factors SPF uses for this are established by the Board every year on the basis of the interest rate applying at the time and the life-expectancy, for example. As the factors change every year, there may be differences between the factors used to convert the pension to an age of 67 on 1 January 2016 and the factors used to bring the pension forward again to the desired start date (for example the age of 65). Back to the questions

3) How are the employer SABIC and the social partners involved? To complete the harmonization of pensions for SABIC employees in the Netherlands, SABIC has requested an internal collective value transfer (conversion). SPF will carry out this request together with the employer and the union organizations. Both the employer and the union organizations are involved in the process and the communication. Back to the questions

4) Can I still retire at 65 when my pension has been converted? Yes. Conversion of the pension already accrued is based on a starting age of 67 for your total retirement pension. However, you can still retire earlier, for example at 65. You can retire at any time between the ages of 60 and 67. Back to the questions

5) How is the amount of the pension after conversion calculated? The value of your pension after conversion is equal to the value before conversion. The conversion means that your whole pension is administered on the basis of a pension age of 67. The conversion relates only to the past. For your future pension accrual will be based on a pension age of 67. We determine the value of any pension you are entitled to. This is the total value of all pension entitlements (retirement pension, partner’s pension, temporary partner’s pension and orphan’s pension) which you can derive from your membership of the fund, except for any pre-pension capital or capital in the Net Pension Scheme. On the basis of this value, we then determine your pension under SPF’s pension regulations on 1 January 2016. Back to the questions

6) Why is the retirement pension different after conversion? Your pension scheme had a pension age of 65, 66 and 67. From 1 January 2016 the scheme will only have a pension age of 67. After conversion of the pension already accrued to the current scheme, your total pension will begin at 67. As the pension age will be increased by one or two years, your pension will be higher after conversion, as it will not have to be paid for as long if it starts at a later date. The retirement pension will not always be higher. If you have not accrued a partner’s pension (in an old pension scheme for example), your retirement pension after conversion may be lower than before conversion. This is because some of the value of the retirement pension is used to purchase partner’s pension. The partner’s pension after conversion is 70% of the retirement pension for these members as well. The temporary partner’s pension is 14% of the retirement pension. Before your retirement pension starts, you can still exchange the accrued partner’s pension for a higher retirement pension, with your partner’s consent or, for example, if you don’t have a partner. Back to the questions

7) The conversion has also been reported to De Nederlandsche Bank (DNB). Has DNB already expressed its opinion about it? A collective value transfer (conversion) can only go ahead if DNB does not object to it. SPF informed DNB of the proposed collective value transfer (conversion) on 29 September 2015. SPF expects to receive DNB approval shortly. Back to the questions

8) How and until when can I object to the conversion? If you wish to object to the collective value transfer (conversion), please notify us before 18 December 2015. You can make an objection with a ‘Declaration of objection to the conversion of the accrued pension with SPF’, which you can find after the questions and answers in this document. If you object to the collective value transfer (conversion) your pension entitlements will not be converted. The address or email address to which the declaration should be sent is given in the declaration. Back to the questions

9) When will the pensions actually be converted? Your pension will be converted on 1 January 2016. The pension entitlements in the personal pension statement were calculated well before this date. That means that the converted pension entitlements may still change if there is a change in your situation (for example death, separation etc.) in the meantime (before 1 January 2016). The results will then be different. If that is the case, it will be shown in the next Uniform Pension Statement (UPS). Back to the questions

10) How does the conversion affect disabled members? The pension entitlements of disabled members will also be converted. The same advantages apply as for the active members. The conversion may offer additional advantages for disabled members. Retirement pension does not need to start at the age of 65 or 66; the eventual disability pension of SPF upto the age of 67 will therefor not be terminated and no higher tax has to be paid in case of overlap between the Employee Insurance Administration (UWV) and the SPF pension. Back to the questions

11) How does the conversion affect my disability pension benefit? These pension rights are not involved in the collective value transfer (conversion). The amount of your disability pension benefit will therefore remain the same after the conversion. The end date of the benefit will not change. Back to the questions

12) How does the conversion affect the pension entitlements of my former partner(s)? The retirement pension entitlements of former partner(s) distributed after separation are also converted in accordance with the choice made by the SPF member. A former partner or partners can thus not make an objection themselves. The partner’s pension entitlements distributed after separation are not involved in the conversion and remain unchanged. Back to the questions

13) How does the conversion affect my PPS benefit? If you currently receive a PPS benefit (pre-pension benefit), this will not change. The PPS will remain in place alongside the new scheme and will not be involved in the conversion. Back to the questions

14) I have not received a letter about the conversion, although I accrued pension with SPF in the period up to and including 31 December 2013. Who should I notify? If you have not received a letter, please contact SPF by calling (045) 5788100 or emailing [email protected]. Back to the questions

15) How might the entitlements to retirement pension be affected if they are not converted? If your accrued pension is not converted, part of your pension will still have a pension age of 65 and/or 66. You may only defer this pension as long as you continue to work. If you are no longer in employment at the age of 65 or 66, SPF is obliged for fiscal reasons to start paying this pension at the age of 65 or 66. If you are also receiving unemployment benefit at that time, your pension will be deducted from this benefit. After conversion your pension will have a standard starting age of 67, but you will still have the flexibility to start your pension between the ages of 60 and 67. If your entitlements are not converted, you will not have a clear overall summary of your personal pension situation. Back to the questions

16) What are the advantages and disadvantages of conversion? Advantages of conversion:  Your full pension at a single age: clear and comprehensible.  No restrictions on retiring earlier or later in the future.  In line with the AOW age. Possible convergence of retirement pension with unemployment benefit (resulting in reduction of the benefit) deferred until the age of 67, unless the member opts for an early retirement pension start date.  No termination of the temporary partner’s pension for the current AOW age of your partner. Until now the end date depended on the AOW age applying on the date of leaving the company or retiring.

Disadvantages of conversion:  Any changes in factors (for example a change in the interest rate or life-expectancy) may result in differences between conversion in the future (for example when bringing forward the pension age) and conversion now. If the rate is lower this is an advantage, if it is higher, it is a disadvantage. Back to the questions

17) Does the conversion affect the pre-pension capital? If you have pre-pension capital, this capital remains alongside the basic scheme and is converted into pension when you retire or take early retirement. Back to the questions

18) How does the conversion affect the partner’s pension, temporary partner’s pension and orphan’s pension? If you have accrued partner’s pension or temporary partner’s pension for your partner and orphan’s pension for your children, these will be higher. As the conversion increases the retirement pension, your partner’s pension, temporary partner’s pension and orphan’s pension will also be increased. This additional partner’s and orphan’s pension is purchased with part of the retirement pension. Before your retirement pension starts, you can exchange the accrued partner’s pension back into a higher retirement pension with the consent of your partner or, for example, if you don’t have a partner. The temporary partner’s pension is paid from the first day of the month following the death of the member or deferred member and ends (after the conversion) when the partner reaches AOW age. If the entitlement is not converted, the temporary partner’s pension may end earlier, when the partner reaches the age of 65. Back to the questions

19) How do I object to the conversion? You are not obliged to have your accrued pension converted to the age of 67. You can object. If you are considering objecting it is always a good idea to read the information sent to you and the information on the SPF website about conversion. The conversion of your accrued pension to a single pension age has a number of advantages. By submitting a ‘Declaration of objection to the conversion of accrued pension with SPF’ you are also stating that you are aware of the consequences. If you still consciously wish to exclude your pension from the conversion you should do the following: Download the ‘Declaration of objection to the conversion of accrued pension with SPF’ from the SPF website. Complete the declaration and get your partner to sign it. Then send it by post or email to one of the addresses stated on the declaration. If you are not sure whether or not to object, please contact the SPF Pension Desk by calling 045 5788100 or sending an email to [email protected]. Back to the questions

20) How can I see my new pension situation (after conversion)? Your new pension situation is shown in the personal letter about the conversion. The results will only be different if there is a change in your situation before 1 January 2016 (for example death, separation etc.). If that is the case, you will be informed in writing. You will receive your Uniform Pension Statement (UPS) as usual in 2016. This will show all the financial information about your personal pension situation with SPF, so you will see your new pension situation. The Pension Planner on the SPF website will be amended to reflect the new pension situation in 2016. This will allow you to calculate all the individual choices you have on retirement. You can also see your pension entitlements after receiving the UPS at www.mijnpensioenoverzicht.nl. Back to the questions

21) Where do I find the current pension regulations? Your pension scheme is described in the pension regulations. You can download the pension regulations via http://www.spf-pensioenen.nl/overons/reglementen. You can also request a copy from the SPF Pension Desk. Back to the questions

22) What do I have to do myself? You do not have to take any further action unless you do not agree with the conversion of your accrued pension. You can make an objection. Read about how to do this above. Back to the questions

23) Information sessions? SPF is organizing information sessions about the conversion of pension entitlements to the age of 67 for active members on 24, 25 and 26 November and 1 December 2015. You will receive more information about this from your employer. If there is enough interest, an information session for deferred members will be held on 25 November at 07:00 PM at Fortunato in Sittard. Anyone interested in attending this session should contact Karin Grannetia (email [email protected]). Back to the questions

24) Any questions? Please contact our Pension Desk. The contact details are as follows: Stichting Pensioenfonds SABIC Postal address: Postbus 6500, 6401 JH Heerlen Telephone number and email: 045-5788100 and [email protected]. Back to the questions

The above information in the form of questions and answers has been carefully prepared on the basis of the information known to us and your pension regulations. The pension regulations are definitive.