Leading petroleum company, British Petroleum (BP) has threatened to forcefully grant pension benefits to about 20 ex-employees who are not willing to withdraw their pension benefits because of calculation differences.
Disagreements have ensued between the company and its former employees over the system of calculating pension benefits as employees opts for Defined Contribution (DC) scheme while the company insists to calculate the terminal benefits using the Defined Benefits scheme.
The disagreements have been going on since those who were retrenched last year putting the number of those on the waiting list to benefit from the new scheme to 20.
However, in a letter dated August 18, 2009 and duly signed by the company’s Acting General Manager Dasford Kamkwamba, the company told the ex-employees to withdraw their pension with the Defined Benefits scheme as the company’s trustees have not yet make a decision on which scheme to calculate their pension.
Some of the employees speaking on condition of anonymity observed that the company’s insistence to use the Defined Benefits scheme deny them the lump some amount of their benefits and leavening the those managing the trust fund with surplus.
“What would the company going to do with the surplus as the belongs to the employees. The irony that all BP associates in Africa moved from Defined Benefits to Defined Contribution why should BP Malawi find it difficult to do the same.
“Pension fund schemes are supposed to be managed and controlled by elected trustees within a company for BP Malawi they want it to be controlled in London,”
But the said letter management told the ex employees that: “You have up to 8th September if you wish to make use of the options provided. If we do not hear after the said date, we will witdraw your benefits on option 4 (lump sum cash benefit). In recognition that your exist from the organization was not voluntary, the company and trustees have resolved to pay a once off exgratia payment. This is over and above the withdrawal benefits under the DB scheme.”
Kamkwamba said there was nothing they could do to satisfy the ex-employees wishes as the company has not received a go-ahead from their office in London to implement the Defined Contribution scheme.
“The date they left company the scheme was Defined Benefits so we can not calculate different from where they left,” he said.
Kamkwamba said he could not discuss the surplus money to be realized from the change to Defined Contribution because the company have not reached that level: “Lets reach the bridge first.”
Part of the letter reads: “In 2007 BP management communicated the trustees’ proposal for the conversion of BP Pension Fund from the current Defined Benefit (DB) scheme to a Defined Contribution (DC). In view of your preference, management, in line with BP Global Reward’s (BP London) requirement that any proposed change to employee benefits be approved by BP London, notified BP London of the proposed conversion.”