Following the appointment of Andrew Spink KC and solicitors Stephenson Harwood LLP, by the BP Pensioner Group, confidential legal letters have today been issued to senior members of BP management and directors of the BP Pension Fund Trustee.
This is the culmination of a process started by the Pensioner Group, which comprises c.2,500 pensioners who have suffered as a result of receiving the double blow of a significant reduction in the value of their pensions at the same time as having to deal with an unprecedented cost of living crisis.
The legal letters rely on statements (as well as other evidence) made over a significant period of time by both BP and the Trustee about how pension increases will be dealt with and require them to explain why, in light of this evidence, increases have been provided at substantially lower levels than could have been provided for under the Scheme. In particular, the Trustee has been asked to reconsider the relevant pension increases and liaise with BP on appropriate increases.
If adequate responses are not received, the Pensioner Group considers it will have little option than to escalate its own legal response until/unless pension increases at an adequate level are restored. The Group has received legal advice that it has a number of options for doing this, but, as such advice is privileged and confidential this cannot itself be shared.
The dispute relates to decisions made in 2022 and 2023 by BP and the Pension Fund Trustee which have led directly to an 11% fall in the value of the pension in real terms.
For several decades, BP and the Trustees have given written and verbal assurances that their policy is to “increase pensions fully 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 and later retired on the basis of that assurance.
The BP Pension Fund has a record surplus of some £5 billion.
Mike Slingsby, a former senior manager at BP, speaking on behalf of the BP Pensioner Group said:
“It is a matter of deep regret that after 7 months of innumerable letters, emails and telephone calls, neither BP’s leadership nor the Trustee Chairman have seen fit to hold a single direct conversation or meeting with the Pensioner Group, which represents some 2,500 members of the BP Pension Fund. This has forced us, reluctantly, to take formal legal steps against the Company that we served loyally for much of our careers and lives.”
BP’s interim CEO, Murray Auchincloss recently invited pensioners to apply for a one-off, means-tested payment of £2,500 as charity handout for pensioners in hardship.
“While we welcome help to any pensioner in hardship”, said Slingsby, “resorting to a one-off charity handout shows a leadership failure to grasp the seriousness of this wholly unnecessary dispute in which BP’s pensioners have seen the value of their pensions significantly cut in real terms.”
“A charity offer is completely inadequate, and the Company leadership appears to be tone deaf – despite claiming it is listening to its pensioners.”
For reasons of legal privilege and confidentiality, no further comment on the legal process or the content of correspondence between the Group and BP/the Pension Fund Trustee will be made at this time.
Notes to Editors
- The BP Pensioner Group was formed in May 2023 and has grown to some 2,500 members – purely by word of mouth – following the Pension Fund Trustee refusal to share basic information about the group with the c.58,000 members of the Fund.
- The Pensioner Group has appointed Andrew Spink – a highly respected KC specialising in pensions, banking and financial services https://www.outertemple.com/barrister/andrew-spink-kc/ and law firm Stephenson Harwood LLP – who have a proven track record in successfully acting for representatives of groups of pension scheme members. https://www.shlegal.com/services/pensions-dispute-resolution.
- In April 2022, the Trustee of the BP Pension Fund failed to make a recommendation to BP that a ‘cost of living‘ discretionary increase in the pension should be made, as would have been allowed under the Pension Fund Deed, Rules and prevailing policies.
- In April 2023, BP’s former CEO Bernard Looney rejected the BP Pension Fund Trustee recommended ‘cost of living’ increase to the pension – a recommendation that had been endorsed by the Pension Fund’s independent actuary.
- The average BP pension is £18,000 per year. The permanent loss in its value as a result of the decision of the former CEO, Bernard Looney, is approaching £2,000 for every year of that pensioner’s retirement. This adds up to tens of thousands of pounds of lost value over the remaining years of that older person’s life. Of the c. 58,000 members of the pension fund, 16,000 are over the age of 80.
- BP has enjoyed record windfall profits and even described the company as a “cash machine”. In the past two years it has awarded spectacular windfall increases in remuneration and cash payments in lieu of pension to executive leaders such as Mr Looney and Mr Auchincloss. Mr Auchincloss, as BP’s Chief Financial officer, saw his total remuneration increase by 752% over the past two years to reach £5.2 million. He received a cash allowance in lieu of pension of £227,000.
- 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 members of the BP Pensioner Group