There are few things that annoy me more in pensions than the behaviour of BP’s management in blocking the Trustee’s wish to distribute part of its substantial surplus to members.
BP pensioners will be out in force at BP’s AGM today with lots of questions for the new Chairman and new CEO.
Pensions disputes may not be the biggest problem for BP’s new leaders – but the attractions of getting hands on a £4 billion surplus may be irresistible with Government’s new Pension Schemes Bill about to become law.
Below is a press release from the BP Pensioner Group whose Website is https://bppensionergroup.org/
In the Parliamentary debate on the Pension Schemes Bill, in response to questions about sponsoring employers blocking or not granting discretionary increases (mainly in respect of pre 1997 benefits and Hewlett Packard was specifically mentioned), the Pensions Minister stated that he expected Trustees to “veto” any surplus return to employers [until constructive obligations created at time of service was honoured] (my interpretation).
Sorry should have read:
[until the constructive obligation created at time of service was honoured]
The Accounting Standard IAS 19 at paragraph 61 states:
“An entity shall account not only for its legal obligation under the formal
terms of a defined benefit plan, but also for any constructive obligation
that arises from the entity’s informal practices. Informal practices give rise
to a constructive obligation where the entity has no realistic alternative
but to pay employee benefits. An example of a constructive obligation is
where a change in the entity’s informal practices would cause unacceptable
damage to its relationship with employees.”