When is a bp commitment not a commitment?
The graphic shows an extract from a BP pensions newsletter dating to 1996 and includes:
“the Trustees with the agreement of the company, have stated that they intend to follow a policy of increasing pensions in line with RPI wherever possible even when this exceeds 5% so long as the BP Pension Fund has sufficient resources to permit this. In times of high inflation this would be a valuable underpinning to the purchasing power of your pension”.
The document also stated that a benefit of the scheme was: “Guaranteed increases to protect the value of your pension over the years of your retirement”.
This is only one example where, for at least a decade, BP was giving its staff similar pension commitments, on which they then based their financial decisions.
For 2022 the relevant RPI (Retail Price Index) inflation was 7.5% but the BP Pension Fund Trustees did not increase pensions in line with RPI, despite BP making record profits that year.
For 2023 RPI inflation was 13.4%. The Trustees proposed to increase pensions by 9%, but despite the pension fund being in significant surplus, BP rejected the discretionary increase of 4%.
Despite the earlier commitments, over the last two years, BP pensions have fallen in value by 11%.
Pensioners now feel that they can no longer trust BP’s commitments.
And can the current bp staff trust any commitments that BP is making to them?
It’s not too late to resolve the pensions issues informally. If BP continues to refuse to do this, a day will come where BP will have to account for the legitimacy of its recent pensions decisions.