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:
- Strengthening Trustee boards by the appointment of a majority of independent directors with pension expertise.
- Proper consultation and choices to be provided to pension fund members where Trustees develop proposals for the Buy-Out of funds by insurance companies.
- 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: https://bppensionergroup.org/