Carmichael raises worker pension risks in parliamentary debate

17 Jan 2024

Orkney and Shetland MP, Alistair Carmichael, has today welcomed concessions by the pensions minister to look further at issues with defined benefit pension schemes, following a debate in Parliament led by the isles MP. Mr Carmichael secured the debate to raise concerns in support of BP pension holders, who have faced a real-terms devaluation of their pensions despite record assets in the fund.

BP previously followed a policy of protecting its Defined Benefit pensions from being devalued by inflation as long as the UK Pension Fund had sufficient resources. In 2022 and 2023, however, BP blocked the Pension Fund Trustee from following this practice, causing 58,000 BP pensions to fall by 11% in real-terms value. The BP Pensioner Group, which formed in 2023 in response to the change, has voiced concerns that the move is in preparation of BP offloading its pension fund to a third party, and that other companies may follow suit if this happens.

9.6 million UK citizens are members of Defined Benefit pension schemes with total assets of £1.7 trillion. The vast majority of these schemes are in a surplus of assets over liabilities - totalling £359 billion.

Responding to the debate, the Parliamentary Under-Secretary of State for Pensions Paul Maynard MP said that he would take up the concerns raised with the Pensions Regulator.

Speaking after the debate, Mr Carmichael said:

“I am glad that we were able to secure this debate – laying down a marker for further action on behalf of pensioners. It was good to see that the minister is alive to the challenges involved but we need to see more in the weeks to come.

“The sort of light touch regulation that the minister talked about in his response only works for as long as there is good faith from both sides. Trust has been damaged between BP and its defined benefit pension holders. This is a matter of basic fairness and one which could affect millions of pensioners across the country if BP’s policies are allowed to spread – that must be challenged.”

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