bp reports more than £7 billion profits in 6 months – raises dividend – but refuses to restore cut in BP pensions.

BP Pensioner group criticises CEO’s claim that restoring cut in BP pensioners’ real incomes would be “a burden” and “hit bp’s bottom line”.

  • bp announced today that its profits in the first half of 2023 have totalled more than £7 billion and it will increase the dividend paid to shareholders by 10% and spend an additional £1 billion on buying back its own shares.
  • However, bp’s CEO, Bernard Looney, has rejected the recommendation of independent Trustees of the BP Pension Fund to award a discretionary 4% increase in the pension payable to BP’s pensioners. The average pension paid by the BP pension Fund is £18,000 per annum. 16,000 pensioners are in their 80s and 90s. In just two years, their pensions have been reduced in value by 11%.
  • bp’s CEO has recently said the primary driver for his decision to block the PensionTrustees was to ensure that the company is “strong” and that the discretionary increase would “hit BP’s bottom line” and be “an additional burden that BP is not willing to accept”.
  • The BP Pensioner group, representing 1,700 members of the Fund, believes this claim does not stand up to scrutiny:
    • The discretionary award recommended by the Trustees, after consultation with the Fund actuary, did not require a single penny of cash support from bp.
    • The Fund has a £6 billion surplus which is held in trust exclusively for scheme members.
    • Even had it not been in surplus, BP’s CFO has recently said the Company is generating more cash than it knows what to do with.
    • The impact of the discretionary increase on how BP records the Fund’s assets and liabilities on its Balance Sheet and P&L would have been extremely small. And the cash impact negligible.
    • bp and the trustees are reported to be in talks involving a ‘buy-in’ to the Pension Fund by insurance companies. The BP Pensioner group believes it this ‘behind the scenes’ activity that is the real reason for why BP has broken with decades of practice in keeping its pensioners income aligned with inflation.
  • The BP Pensioner group is staging a ‘Social Media Day of Action’ on August 1st This aims to highlight the impact on BP’s pensioners – and the failure of bp’s leadership to engage with them.Nick Coleman, on behalf of the BP Pensioner Group, said:
    The refusal of bp’s chief executive to even discuss hisdecision to reject the independent Pension Fund Trustees recommendation is not acceptable and falls short of the standards expected of a leader of a company such as bp. Theimpact of that decision falls upon 60,000 members of the Pension Fund – the same people who spent much of their working lives creating the company that he now leads. We urge the CEO and board to reconsider this decision and engage with BP’s pensioners so this dispute can be swiftly resolved. The social media day of action sends a strong signal that BP pensioners and this campaign are not going away. ”

Notes to Editors

  • In the past BP has always supported the Fund Trustees in keeping pensions aligned with inflation.
  • BP’s pensioners have now suffered an 11% reduction in the real value of their pension over the past two years.
  • The Fund has a very strong surplus which could and should be used for the purpose it was intended – to ensure the value of the pension is not eroded permanently by inflation.
  • This is the first time that a bp CEO has taken such a decision to block the recommended discretionary increase.
  • Such is the profitability of the company, in just two years, Mr Looney has received a 477% increase in his own total remuneration – reaching £10 million pa in 2022.
  • The BP Pensioner Group will shortly announce the next step in its legal challenge to the decision and other related matters.