UK Pensions Consultation Forum: ‘working for everyone’s benefit’

1. UK Pensions Consultation Forum:‘working for everyone’s benefit’ UK Pensions & Benefits Defined Benefit employeesSeptember 2014 FOR BP INTERNAL USE ONLY

2. Contents • Your benefits package • Main features of the BP Pension Scheme • Core benefits • Flexible benefits • Voluntary benefits

3. Your benefits, your way BP’s flexible benefits plan is called your benefits, your way Your benefits package has three elements: • Core benefits • Benefits you get automatically, paid for by BP • ‘Backbone’ of overall benefits package • Life assurance, income protection & health benefits • Flexible benefits • Buy additional benefits with earnings • Voluntary benefits • Wide range of discounted goods and services • Available to choose all year round • Charitable giving opportunities and more

4. Overview of BP Pension Scheme • Pension benefits • Contributory options • Taxable allowances • Normal retirement • Age 60 for joiners on or before 30 November 2006 • Age 65 for joiners from 1 December 2006 • Early retirement • Options on retirement • State Pension Scheme • Death benefits • Use PensionLine

5. BP Pension Scheme - benefits • Non-contributory 60ths final salary pension: Pensionable service (in years and days)x final salary 60 • Member (pre December 2006 joiner) retires age 60 after 20 years’ pensionable service with a final salary of £30,000. • 20 x £30,000 = £10,000 annual pension 60 ‘Final salary’ is basic annual salary, including any permanent shift allowance, but excluding overtime and other variable payments. • Life cover of four times salary • Full details are in the new explanatory booklet at pensionline.bp.com plus 24/7 benefit statement and modelling facilities

6. Your contributory options • Higher pension build-up rates Pensionable service (in years and days) x final salary Accrual rate • Example: Member retiring at age 60 after 30 years’ pensionable service and final salary of £30,000; 20 years under 60th option; 10 years under 40th option 20 x £30,000 = £10,000 10 x £30,000 = £7,500 60 40 Total pension = £17,500 a year • Tax efficient contributions paid via salary sacrifice monthly • Start, stop or switch options anytime during the year via the “your benefits your way” portal as an “Anytime Event”. • Alternative: pay AVCs or contribute to another pension

7. Your contributory options Example: Member with 20 years’ service and a final salary of £30,000 * Non-contributory option ** Your contributions are made via salary sacrifice, so you save tax at your highest marginal rate *** Assumes you maintain constant contribution level over 20 years

8. Annual Allowance (AA) • Maximum pension savings each tax year without any tax liability • BP’s Scheme year runs 1 January to 31 December known as PIP Year (PIP = Pension Input Period) For example:1 January 2013 to 31 December 2013 = PIP Year 2013 = Tax Year 2013/14 • Allowance currently £40,000 per annum • Pension savings = growth in your pension during PIP year • Final Salary Scheme = increase in accrued pension • Money Purchase Scheme = actual contributions paid in • CPI growth allowable before counting for AA. • Savings above allowance subject to a tax charge • Can use any unused allowance from previous 3 years if needed (Carry Forward) • AA Statements available on Pensionline (currently whilst employed only) • Taxable Pension Savings need to be entered on Self Assessment Form • Tax charge can be paid via “Scheme Pays” providing over £2,000

9. Scheme Pays • Tax charge must be over £2,000 in the Scheme • Cannot add any non-BP Scheme’s tax charge to BP’s • The deadline for notifying the HMRC you are using Scheme Pays for 2013/14 (PIP Year 2013) is 31 January 2015 via self assessment. • There is a deadline for notifying the Scheme you are using Scheme Pays (for 2013/14 it is 31 July 2015, but if leaving must be before you leave) • The Scheme Pays tax charge within 3 month of notification • Tax charge offset from your pension using a pension debit • BP Pension Scheme factors on PensionLine for 2012, (2013 to be added shortly) • Scheme Pays form available on PensionLine • Irreversible decision • For more information on AA and Scheme Pays see HMRC website and PensionLine – AA Q&As

10. When you can take your pension * By law the minimum retirement age is now 55 (However, pre-6 April 2006 joiners retain right to retire at 50 on unconsented retirement terms.) ** From 1 March 2008, the reduction 4% a year if retiring without Company consent. *** If you joined the Scheme after 30/11/2006, the minimum age to receive an unreduced pension is 65.

11. Examples of early retirement Age: 58 Pensionable service: 16 years Accrual option: non-contributory 0:60 Final salary at retirement: £25,000 Annual pension at retirement:

12. Options on retirement • Annual pension, or • Exchange part of pension for a tax-free cash lump sum • One-off option only • Up to 25% of value of pension • Normally taken from any AVCs in first instance

13. State pension scheme • Two parts to State pension • basic State pension • additional State pension • Both payable from State pension age • Basic pension is flat rate and based on NI contributions record • Additional pension is earnings related (SERPS and S2P) • Replaced by single-tier pension from 6 April 2016 • BP Pension Scheme employees contracted-out of S2P • Pay reduced rate NI contributions • For BP service the Scheme provides benefits instead of the State • Getting State pension forecast/profile/statement • PensionLine; or • Directgov (process depends on your date of birth)

14. Pension for spouse/civil partner/dependants • Pension for your spouse, civil partner or another dependant • Equal to two-thirds of your pension • Children’s pensions • Active members • 4x basic salary lump sum death-in-service benefits • Deferred members and pensioners • five-year pension guarantee • Death grant to next-of-kin (for pensioners) • Fill in expression of wishes form and keep it up to date • Guides Trustee about who to consider for lump sum death benefit (and survivor’s pension in certain circumstances) • Get Form from PensionLine or from BP Pensions & Benefits Team

15. Use PensionLine • Use PensionLine to: • Check BP Scheme benefits and State pension • Model changes to contributory options • Model projected retirement benefits • Modeller in March to • Check effect of accrual rate changes and predicted salary increases on Annual Allowance • Check/download your latest Annual Allowance Statement • https://pensionline.bp.com

16. Core benefits in addition to pension • Private Medical Insurance (PMI) • Quicker medical diagnosis and treatment than NHS • Currently provided by Bupa • Core benefit limits • Covers only employee • Excess of £100/claim in a plan year • £1,000 per life per plan year in respect of eligible outpatient treatment and therapy costs • An additional per employee life per plan year benefit of £4,000 applies in respect of employee psychiatric and musculoskeletal treatments • Can ‘flex up’ PMI at favourable rates • Add immediate family members • Remove outpatient limits 16

17. Core benefits in addition to pension • Face-to-face health screening every three years • Paid for by BP • Gold (Bands C & D plus level E and below aged over 40) • Silver (Level E and below, aged below 40) • Or buy Gold cover through flexible benefits plan • Wellness Checkpoint • Online tools to monitor and manage health all year round • Employee Assistance Programme (EAP) • Confidential telephone helpline • Plus face-to-face counselling if needed • Financial information, debt counselling and specialist information 17

18. Flexible benefits • You can give up part of your earnings to buy additional: • Spouse/partner life assurance • Critical illness insurance • Dental insurance • Personal accident insurance • Childcare vouchers (change anytime via “Anytime Event”) • Cycle to work- (Only available at Annual enrolment) • Travel insurance • Deductions for benefits via salary sacrifice • valuable tax and NI savings • Select benefits during annual enrolment window • Fixed for calendar year, except for ‘qualifying life event’

19. Voluntary benefits • Buy them yourself at significant discounts secured by BP • BP Staff Fuel Card • Employee car plan • Insurance cover (e.g. house, car) • Charitable Giving • All new employees’ need to register for access to the Voluntary benefits website and access is given within 7-10 days.

20. Further Information 20

21. Who to contact? https://pensionline.bp.com • Your benefits, your way • Helpline: 0800 916 8013 (+44 1737 227513 from overseas) • Email: bpyourbenefits@towerswatson.com • Escalations: yourbenefitsyourway@uk.bp.com • For BP Pension Scheme • Phone: 0845 602 1063 (+44 1932 767 730 from overseas) • Email: pensions@uk.bp.com

22. Thank you for attending Any questions? Q & A