BP 2010 Annual Report Download - page 118
Download and view the complete annual report
Please find page 118 of the 2010 BP annual report below. You can navigate through the pages in the report by either clicking on the pages listed below, or by using the keyword search tool below to find specific information within the annual report.Directors’remunerationreport
Pensions
Executivedirectorsareeligibletoparticipateintheappropriatepension
schemesapplyingintheirhomecountries.Detailsaresetoutinthe
tablebelow.
UKdirectors
UKdirectorsaremembersoftheregularBPPensionScheme.Thecore
benetsunderthisschemearenon-contributory.Theyincludeapension
accrualof1/60thofbasicsalaryforeachyearofservice,uptoamaximum
oftwo-thirdsofnalbasicsalaryandadependant’sbenetoftwo-thirdsof
themember’spension.Theschemepensionisnotintegratedwithstate
pensionbenets.
TherulesoftheBPPensionSchemewereamendedin2006such
thatthenormalretirementageis65.Priorto1December2006,scheme
memberscouldretireonorafterage60withoutreduction.Specialearly
retirementtermsapplytopre-1December2006serviceformemberswith
longserviceasat1December2006.
Pensionbenetsinexcessoftheindividuallifetimeallowanceset
bylegislationarepaidviaanunapproved,unfundedpensionarrangement
provideddirectlybythecompany.
Inthelightofthereducedannualallowancetaxregimebeing
implementedfromApril2011,thecompanyisconsideringalternative
approachestotheprovisionofpensionbenetsforfutureserviceforUK
directorsandotherseniorstaffimpactedbythechange.
AlthoughMrIngliswas,likeotherUKdirectors,amemberofthe
BPPensionScheme,hisparticipationgaverisetoaUSfederaltaxliability
ashewasbasedinHouston.During2010,pursuanttoataxequalization
arrangementthatappliedinrespectoftheperiodsinceMrInglisbecame
adirectorinFebruary2007,underhisinternationalassignment
arrangements,thecommitteeapprovedthedischargeofthisUStaxliability
amountingto$1.26millioninrespectof2010.Thisgureincludedan
elementinrespectoftheadditionalvalueofMrInglis’saccruedpensionas
aresultofcrystallizationofearlyretirementrightsontheterminationofhis
employmentwithBP.
USdirectors
MrDudleyandDrGroteparticipateintheUSBPRetirementAccumulation
Plan(USpensionplan),whichfeaturesacashbalanceformula.Pension
benetsareprovidedthroughacombinationoftax-qualiedand
non-qualiedbenetrestorationplans,consistentwithUStaxregulations
asapplicable.Inaddition,MrDudleyretainstheheritageAmocoretirement
plan,whichprovidesbenetsonanalaveragepayformulaof1.67%of
highestaverageearnings(basepayplusbonusinaccordancewithstandard
USpractice)foreachyearofservice,reducedby1.5%oftheprimarysocial
securitybenetforeachyearofservice.Thehigherbenetoftheplans
producedbythetwoformulaswillbepayableandthisiscurrentlythe
benetdeterminedundertheAmocoheritageterms.
Inaddition,BPprovidesaSupplementalExecutiveRetirement
BenetsPlan(supplementalplan),whichisanon-qualiedarrangement
thatbecameeffectiveon1January2002forUSemployeeswithsalary
aboveaspeciedsalarygradelevel.MrDudleyandDrGroteareeligibleto
participateunderthesupplementalplan.Thebenetformulaisatarget
of1.3%ofnalaverageearnings(basepayplusbonus)foreachyear
ofservice,inclusiveofallotherBP(US)qualiedandnon-qualied
pensionarrangements.Thisbenetisunfundedandthereforepaidfrom
corporateassets.
Theirpensionaccrualfor2010,showninthetablebelow,takes
intoaccountthetotalamountthatcouldbepayableunderrelevantplans.
Other benets
Executivedirectorsareeligibletoparticipateinregularemployeebenet
plansandinall-employeesharesavingschemesapplyingintheirhome
countries.Benetsinkindarenotpensionable.BPprovided
accommodationinLondonforMrDudleyandforMrInglisduring2010.
Thisprovisionceasedforbothindividualsattheendof2010.
Pensionsa (information subject to audit)
thousand
Additionalpension
Accruedpension earnedduringthe Transfervalueof Transfervalueof AmountofB-Aless
Serviceat entitlement yearended accruedbenetb accruedbenetb contributionsmadeby
31Dec2010 at31Dec2010 31Dec2010a at31Dec2009(A) at31Dec2010(B) thedirectorin2010
RWDudley(US) 31years $704 $298 $4,353 $10,336 $5,983
ICConn(UK) 25years £287 £12 £4,508 £5,373 £865
DrBEGrote(US) 31years $1,281 $270 $12,047 $16,501 $4,454
Directorsleavingtheboardin2010
DrABHayward(UK)c 29years £605 £21 £10,840 £13,677 £2,837
AGInglis(UK)c 30years £349 £12 £6,000 £7,633 £1,633
a Additionalpensionearnedduringtheyearincludesaninationincreaseof2.4%forUKdirectorsand1.5%forUSdirectors.
b Transfervalueshavebeencalculatedinaccordancewithguidanceissuedbytheactuarialprofession.
cFiguresarecalculatedtoendof2010.
116BPAnnualReportandForm20-F2010