London, UK – Energy giant BP PLC has rejected a request by its pension fund trustee for a discretionary increase of two percent for qualified pensioners. The company stated that it considered various factors such as the current cost of living, the funding position of the BP Pension Fund, and the economic impact on BP before making its decision.
BP highlighted that under its largest UK-defined pension scheme, the BP Pension Scheme, pensions are guaranteed to increase each year in line with the retail price index (RPI) to a cap of five percent. The trustee’s request would result in a total annual increase of seven percent for the pensioners affected.
The company emphasized that it prioritized the interests of its broader stakeholders, including other members of the BPPF, employees in the UK, and members of the company’s pension arrangements outside the UK. BP pointed out that the five percent increase in pensions exceeds the salary increase awarded to UK employees and closely aligns with the December 2023 RPI figure.
Moreover, BP noted that it had previously provided additional funds to the BP Helios Fund, offering financial assistance to individuals with lower incomes. Over 6,500 applicants applied for the one-time GBP 2,500 grant, prompting the company to work with the trustee of the BP Helios Fund to allocate further funds for the current year.
The decision by BP to deny the discretionary increase has sparked mixed reactions among pensioners and stakeholders. While some may be disappointed by the outcome, others may appreciate the company’s efforts to balance the needs of various groups affected by the pension scheme.
Overall, BP’s decision underscores the complexities involved in managing pension funds and the challenges companies face in meeting the expectations of pensioners while also considering the broader financial implications for the organization. As the situation unfolds, stakeholders will continue to monitor developments to see how BP navigates these sensitive issues in the future.