In oral evidence to the UK Parliament’s Work & Pensions Select Committee Inquiry into Defined Benefit pension schemes, Nick Coleman representing the BP Pensioner Group, criticised what he termed an:

“an unseemly grab for pension surpluses which reveals weaknesses and conflicts of interest in Pension Fund Trustee models and exposes the impotence of pensioner members in having a say in what happens to their pension and pension fund surplus in maturity.”

Coleman suggested a number of measures for the Committee to consider aimed at safeguarding the interests of the more than 9 million members of the UK’s Defined Benefit schemes including:

  1. Strengthening Trustee boards by the appointment of a majority of independent directors with pension expertise.
  2. Proper consultation and choices to be provided to pension fund members where Trustees develop proposals for the Buy-Out of funds by insurance companies.
  3. Proper consultation and dialogue with pension fund members for dealing with any fund surpluses remaining after members benefits have been secured in full.

Notes to Editors

  • The BP Pension Fund has c. 60,000 members of whom 16,000 are over the age of 80. The average annual pension paid is around £18,000 pa.
  • For some 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.
  • In the past two years, BP and the Trustees have failed to follow the policy of increasing pensions in line with the cost of living leading to a permanent 11% reduction in the value of BP pensions in real terms.
  • The BP Pension Fund trustee 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.Issued on behalf of the 2,300 members of the BP Pensioner Group Website: