BP ends integration

Oil giant BP Amoco is ending integration in its pension scheme. This will affect some 50,000 current and former employees and cost around £600 million to implement.

A Bargaining Report survey of pension schemes in 1998 found less than half (44%) practised integration. Mostly this was done by deducting an amount from pay to arrive at pensionable pay - usually equivalent to the basic state pension or the lower earnings limit for national insurance contributions. This could mean some £3,400 deducted from pay for pension purposes with a disproportionate impact on the low paid.

Over the last 10 years surveys by the National Assocation of Pension Funds have shown a falling proportion of scheme with integration. The TUC, along with several individual unions, has been campaigning on the issue and will shortly bring out a new report on integration.