BP to close final-salary pension to new entrants

LONDON Wed Jun 3, 2009 2:09am EDT

A British Petroleum (BP) sign is seen at a petrol station in south London July 29, 2008. REUTERS/Dylan Martinez (BRITAIN)

A British Petroleum (BP) sign is seen at a petrol station in south London July 29, 2008.

Credit: Reuters/Dylan Martinez (BRITAIN)

LONDON (Reuters) - BP said on Tuesday it will close its final-salary pension scheme for new UK employees joining the company after April 2010.

"Given that people are tending to live longer and be in retirement for longer we needed to think of a way of making sure that the fund can pay future pensions," a spokesman said.

He said the move formed part of BP's (BP.L) wider cost-cutting plans. The group cut costs globally by about $1 billion (600 million pounds) in its first quarter.

In April BP reported a 62 percent fall in first-quarter profit and a rise in debt levels.

Last year the BP pension scheme, one of the few among top British companies to offer final-salary pensions to new employees, had a surplus of 1.58 billion pounds.

Shares of BP closed Tuesday at 524.75 pence, valuing the business at 98.4 billion pounds.

(Reporting by James Davey; Editing by Steve Orlofsky)