BP DB pension funding position swings into £1.4bn surplus

The funding position of BP’s defined benefit (DB) schemes swung from a deficit of £935m at the end of 2020 to a surplus of £1.4bn, as of 30 June 2021, its second-quarter results report has revealed.

As reported by our sister title, Pensions Age, following a review during the second quarter of 2021, BP found that its DB pension surplus had risen to £719m at the end of March 2020, before hitting £1.4bn at the end of Q2.

The firm’s DB assets increased from £5.72bn to £7.55bn in the first six months of 2021, while its liabilities declined from £6.65bn to £6.11bn during the same period.

BP attributed the swing in its DB pension funding position to net actuarial gains reported in other comprehensive income arising from increases in the UK, US and Eurozone discount rates.

This was partially offset by increases in inflation rates and negative asset performance.

There was also a reduction in liabilities for the UK-funded final salary pension scheme in the second quarter, which was closed to future accrual on 30 June 2021.

For active members of the scheme at 30 June 2021, benefits payable are now linked to salary as at that date rather than to salary on retirement. 

“The current environment is likely to continue to affect the values of the plan assets and obligations resulting in potential volatility in the amount of the net DB pension plan surplus/deficit recognised,” the report stated.

    Share Story:

Recent Stories

Podcast: The benefits of private equity in pension fund portfolios
The outbreak of the Covid-19 pandemic, in which stock markets have seen increased volatility, combined with global low interest rates has led to alternative asset classes rising in popularity. Private equity is one of the top runners in this category, and for good reason.

In this podcast, Munich Private Equity Partners Managing Director, Christopher Bär, chats to European Pensions Editor, Natalie Tuck, about the benefits private equity investments can bring to pension fund portfolios and the best approach to take.

Podcast - The power of three: Using Common Contractual Funds to improve tax outcomes for investors
Large asset owners are still investing in equities in a way where they are taxed on their income. The implication is that they get a poorer return. They need to, and can, improve this, but how?

In this podcast, AMX Head of Client and Manager Development, Aaron Overy, and AMX Product Tax Specialist, Kevin Duggan, discuss with European Pensions Editor, Natalie Tuck, about three options to help ensure good withholding tax outcomes for institutional investors.
Mitigating risk
BNP Paribas Asset Management’s head of pension solutions, Julien Halfon, discusses equity hedging with Laura Blows

Europe’s pensions challenges
Francesca Fabrizi meets Matti Leppälä, Secretary General and CEO of PensionsEurope, to discuss the key aims and objectives of the association today.