BP blocks cost of living increase for its pensioners despite record windfall profits.
South Wales MPs write to BP’s CEO on behalf of constituents.
More than 130 MP’s, including local MPs Carolyn Harris, Swansea East, and Stephen Kinnock, Aberavon, have written to BP’s CEO, Bernard Looney, after bp refused the recommendation of its Pension Fund trustees to provide a discretionary pension increase from 5% to 9% for its 60,000 members of whom some 16,000 are pensioners in their 80s and 90s. Many live in regions of the UK where BP has had significant operations over many years including South Wales, Kingston upon Hull, Teesside, and Grampian.
The average pension paid by the Fund is around £18,000 pa and the Trustees recommendation aimed to offset the impact of inflation on pensioner incomes which have fallen by 11% in real terms in just two years. In the past BP has always supported the Trustees in keeping pensions aligned with inflation.
BP has said that its decision “was based on the need to balance the interests of our many stakeholders, including customers, employees, retired members of staff and shareholders, across the world. Importantly, many of bp’s retirees are outside the UK and most are not in inflation-linked final salary pension schemes.” The Company has advised that those in hardship should apply to the BP Benevolent Fund.
But Mike Slingsby, a member of a 2,000-strong BP Pensioner campaigning group and a former BP senior manager, who worked for BP in South Wales for over 30 years, at both the Landarcy & Milford Haven Refineries and at BP Chemicals Baglan Bay, said:
“The decision by BP to block the Trustees recommendation at a time when inflation is causing real hardship and anxiety across the country – not least for the many BP pensioners in South Wales – needs to be challenged. For well over 30 years, BP and the Trustees have given written and verbal assurances that their policy is to increase pensions in line with cost- of-living increases wherever possible and provided the Fund has sufficient resources. Thousands of BP employees invested their own money into the Fund with that assurance.
“The Fund currently has a very strong surplus of £5 billion, 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. BP has also made record windfall profits but regardless, simply agreeing to the Trustees recommended increase would not have cost BP a penny in contribution to the Fund.”
“We are deeply disappointed that the Company that many local people served for much of their lives has refused to discuss the matter with us. We have recently obtained a Legal Opinion and the company’s stance means we will shortly be pursuing a legal pathway to resolve this matter.”
The Pension Fund recently admitted that it was in talks with insurance companies inviting them to ‘buy-in’ to the Fund. Buy-In arrangements are invariably the first step leading to a complete sell off of pension funds to insurance companies.
BP’s CEO, Bernard Looney – whose pay package increased by 477% over the past two years to reach £10 million per annum – has refused to engage with the BP Pensioner Group
Media Brief 29th August 2023
while the Fund Trustees have declined to share simple contact information about the Pensioner Group with the Fund members.
Nigel Briggs, a BP pensioner who worked for BP in South Wales for 36 years, latterly as Senior Engineer, said:
“There are thousands of former BP employees who have lost a significant amount of their retirement real income and are now being prevented from being informed about the efforts by fellow pensioners to campaign on their behalf about the erosion of their pension and to put this right. So far, 2,000 pensioners have got together through word of mouth and any former BP employees can contact the campaign for further information by emailingcontact@bppensionergroup.org”
Notes to Editors
- BP first developed oil refining and petrochemicals operations in South Wales in 1921 – first at Llandarcy oil refinery near Neath, then at Baglan Bay chemicals plant, Neath Port Talbot and at Barry, Vale of Glamorgan. It was also for a short period a part-owner of the Milford Haven oil refinery, Pembrokeshire, following a merger with Amoco. Many bp pensioners live in the South Wales region.
- The BP Pension Fund is ring-fenced and independent from BP. It is UK-based and subject to UK law – its assets cannot be deployed to support benefit packages in other countries. Comparing ring-fenced pensions with current employees’ pay, bonus and numerous other benefits in different countries is virtually impossible – let alone comparing all these with shareholders’ dividends and share buy-backs.
- The Pension Fund is a Trust, protected by Trust and Pension Law. Its assets were built up in large part from employees’ payments-in-lieu of wages as well as Additional Voluntary Contributions such as salary sacrifice. In short – the assets are there to meet the retirement needs of 60,000 people who work or worked for BP over many decades.
- The BP Pensioner group has called upon BP to confirm its intentions for the Fund, make good the 11% loss in the real value of pensions and openly and widely consult with the Fund membership as well as the Trustees before any significant changes to the Fund are made.
Issued on behalf of the 2,000 members of the BP Pensioner Group
Further Information Tel: 07824 696946 Email: contact@bppensionergroup.org