A current and a retired BP employee have filed a lawsuit against the energy company, charging it with misleading employees over earlier changes to its retirement program.
The lawsuit was filed in a U.S. District Court in Houston on Wednesday.
The plaintiffs allege that BP told participants when it replaced its traditional defined benefit plan with a cash balance plan in 1989 that the cash balance plan was “comparable to and, in most cases, better than” prior benefits under the old plan, when actually, certain employees' benefits were reduced.
The plaintiffs further allege BP failed to give participants “timely and sufficient” notice about the conversion, used an “unreasonably high” interest rate to calculate the value of opening balances when the plan was converted, which reduced participants' balances, and adjusted the cash balance plan to preserve the benefits of certain employees.
The lawsuit was filed on behalf of former employees of Standard Oil of Ohio, which was acquired by BP in 1987, and who were shifted into the traditional defined benefit plan and eventually the cash balance plan.
The plan had roughly $7.7 billion in total assets as of Jan. 1, 2015, according to BP's website.
“BP greatly values its employees and retirees. We have not been served with this suit but believe the management of the pension program for this group of employees is in compliance with the law,” a BP spokesman said in an e-mail.