Appendix — special information for heritage participants

Employees who were participants in a heritage pension plan such as the BP, Amoco, ARCO (including Vastar and CH-20), Master Hourly and Castrol plans at the time these plans were merged into the BP Retirement Accumulation Plan (RAP) have additional plan provisions that pertain to them. The information provided in the cash balance section such as What happens if… applies to the heritage plan participants unless otherwise indicated. Also, the general information provided in this section of this RAP summary plan description applies to all heritage plans. Refer to the applicable Appendix for each heritage plan for specific information about that heritage pension benefit.

Heritage plan eligibility

Eligibility requirements for each heritage plan are described in the Appendix for that plan.

If you are eligible for the grandfather provision, leave the company and are rehired within one year, the grandfather provision still applies to you. Heritage employees also include those who were not employed on the transition date but were/are rehired before incurring a one-year break in service.

Opening account

If you were a participant in a heritage plan, an Opening Account was established for you when your former pension plan was merged into the BP RAP. Your Opening Account equals the lump sum present value of any benefits converted from a former pension plan at the time you began participating in this plan. Your Opening Account does not receive monthly pay credits, but is credited with both regular interest credits and supplemental interest credits.

If you are rehired and did not commence your heritage benefit, an opening account may be established for you. See You are rehired.

For details on how the Opening Account balances were calculated contact BP Retirement Services at Fidelity at 1-877-272-3334.

Supplemental interest credits

Supplemental interest credits provide additional interest on your Opening Account. The supplemental interest credit is the difference between 150% of the regular interest credit, converted to a monthly compounded interest rate, and the regular interest credit, also converted to a monthly compounded interest rate. The supplemental interest credit is applied to your Opening Account in addition to the regular interest credit. The Opening Account balance has a total annual yield rate that is 150% of the regular interest credit rate. For example, if the regular interest credit rate yields a 6% annual return, your Opening Account will receive regular interest credits plus supplemental interest credits that yields an effective annual rate of 9%, net of monthly compounding. The supplemental interest credit applies only to your Opening Account and not to your Current Account.  

You continue to receive supplemental interest credits as long as you remain with BP (or an employee of an 80% or more owned affiliate). If you leave BP and elect to receive your plan benefit at a later date, your Opening Account will continue to receive regular interest credits, but supplemental interest credits won't be paid after the end of the month in which your employment ends.

Vesting in a heritage plan

If you were vested in a heritage pension plan, you automatically became vested in your BP RAP benefit when your plan merged into the BP RAP.

If you were not vested in a heritage pension plan at the time of the plan merger, your years of service may be recognized by the BP RAP at the time you became a participant in this plan. If you were rehired, please see You are rehired.

Heritage plan account growth

Here is an example of how your account can grow over one year with an Opening Account.

Assume you were age 43 with 6 years of service as of January 1, 2012, and you earned $57,850 in base pay and a $4,050 pensionable bonus paid in March during 2012. At the end of the prior year, your Opening Account is valued at $23,059 and Current Account at $4,836. In this example, we are assuming regular interest credits of 5% per annum. You would receive the following account growth each month:

Note: The Social Security Wage Base equals $110,100 for 2012. On a monthly basis, ¼ of the Social Security Wage Base equals $2,293.75 in 2012.

Additional payment options

BP, Amoco, ARCO, Master Hourly and Castrol heritage employees may have additional pension distribution options available to them.