BP: no final salary scheme
ENERGY giant BP is to close its final salary pension scheme to new employees from April next year, City PM can confirm.
The cost of funding BP’s pension obligations has soared since last year, reaching $368m (£222m) in the first quarter of 2009, compared to $246m in the same period of 2008, as the return on its investments tumbled.
Current employees will not be affected, the company said, but new workers will be offered defined benefit pension schemes.
The move is part of a cost-cutting drive initiated by chief executive Tony Hayward, but comes as a surprise given that the pension scheme had a surplus on an accounting basis of £1.58bn last year.
A company spokesman said the measure was aimed at reducing the burden on shareholders and preventing pension liabilities from spiralling out of control.