Download
1 / 7
70 likes | 312 Views
BP Canada Pension & Savings Review Stacey Norman Herb Kostler Francine Swanson PAC Meeting May 29, 2007. Pension & Savings review. BP HR initiated a Total Rewards review in 2006 As part of this, BP Canada should consider its Pension and Savings Plans Issues to consider:
E N D
BP Canada Pension & Savings Review Stacey Norman Herb Kostler Francine Swanson PAC Meeting May 29, 2007
Pension & Savings review • BP HR initiated a Total Rewards review in 2006 • As part of this, BP Canada should consider its Pension and Savings Plans • Issues to consider: • many years since the plans were reviewed • dissatisfaction with service providers • compliance with relevant legislation • competitiveness vs. industry • employee understanding and awareness of the value of plans • inequities between newer and longer-term employees • whether the plans provide sufficient retirement income for employees
Proposed process • Review of plan design and administration will cover several areas, using a combination of internal resources as well as external consulting services • 3 stages : • a) review of current plan design and administration and identification of options; • (b) internal BP approval based on an Executive Memorandum which sets forth the recommendations; and • c) implementation of the recommendations approved by BP
Staged approach • Priorities for action in 2007/2008 (in order): • Savings Plan • Concerns: • Low satisfaction with current service provider (Scotia McLeod) • Scotia not adhering to BP Policy of Balanced funds for DPSP • CAP compliance issues re: investment manager monitoring and advice Scotia gives to employees for Group RSP and DPSP accounts • Scotia is a full service stock broker (full fees also) • Is the current level of BP and employee matching appropriate and competitive • Recommendation: • Contract with an external consultant to administer the RFP process for a new service provider (involve BP HR, Finance, Legal, SCM) • Timeline • start May 1, new provider effective January 1, 2008
Staged approach • Communication • Concerns: • Is BP providing the right level of communications on pension and savings benefits? Are the communications effective? • How does BP balance employees’ need for education vs. advice • Should employee input to redesign projects be sought? • Recommendation: • Communication strategy should be developed. Focus on general financial planning and awareness, as well as plan design/information. • Also need to evaluate current communication vehicles (e.g. pay advices, annual pension statements, BPRP) for effectiveness. • Timeline: • start strategy work in June, integrate enhancements in Fall/07 with savings plan provider change
Staged approach • DC Pension Plan • Concerns: • Is contribution rate (6%) competitive • Is the plan design effective for retaining employees • Long term, does this plan provides a sufficient income replacement for retirement • Should there be an Employee contribution supplementing BP contributions. • Recommendation: • Contract with an external consultant to administer a plan review (involve BP HR, Finance, Legal, SCM) • Timeline: • start RFP June 1 with decision on consultant made by September 1, program changes to be effective June 1, 2008.
Staged approach • DB Pension Plan • Concerns: • Design considerations • Main issues are plan documentation, controls, data flow • Recommendation: • No plan review/redesign planned for 2007/08 • Focus is data clean-up (e.g. ad hoc increase), improving documentation and administration processes • Timeline: • start immediately, continue work with Towers Perrin on pension task list
