The trustees of the BP Benevolent Fund (a registered charity) have worked to modernize and futureproof the fund and will rename it the ‘bp Helios Fund’. bp has also provided additional funding to enable the fund to support those most in need.
As a result, in addition to the longstanding support this fund has provided to certain former UK employees experiencing hardship, it is offering a one-off, tax-free, cost-of-living assistance grant to UK bp pensioners on lower incomes. Details of the grant, and how to apply for it, are being sent to all those who bp understands may be eligible across the UK. For pensioners who used to work at our UK retail sites, a similar arrangement has been set up with the Retail Trust, a registered national charity for the retail sector.
For many years, bp provided a defined benefit pension (DB) plan, also known as a final salary pension, for the majority of UK employees.
Like many other UK DB plans, the pensions of most bp DB pensioners1 are guaranteed to increase annually in line with the Retail Prices Index (RPI), up to a maximum increase of 5% each year. In line with these rules, the pensions of plan participants were increased by 5% in May 2023, following a similar 5% increase in May 2022. The plan rules do allow for discretionary increases above 5% – or above RPI – but only with bp’s consent.
Some pensioners have pointed out that discretionary increases were given between 1989 and 1991 when RPI was last above 5%. However, the pension landscape has changed significantly since this period and the historic approach from that time has not been in place for many years.
Therefore, as was communicated to pensioners by the BP Pension Fund Trustee as long ago as 2007, pensioners should ordinarily expect increases to follow RPI, subject to a maximum increase of 5%. If an additional discretionary increase is granted in a particular year, it will depend upon the circumstances at the time.
This year, bp did not agree to a request from the BP Pension Fund Trustee for an additional discretionary increase of 4% to pensions in payment, which would have made a total increase of 9%.
This was a difficult decision that bp took only after carefully considering many factors, including those noted below.
Balancing the interests of other retirees and employees:
Balancing the interests of other stakeholders:
We look forward to holding an information session for all UK DB pension plan participants this month, where we will answer questions on UK pension concerns. We have sent details to BP Pension Fund members about how to attend.