Pressue to tighten pension fund rules after Gulf disaster

UK PENSION fund holders keeping a close eye on the Gulf of Mexico disaster are urging the government to tighten regulation in a bid to protect against exposure to financial uncertainty similar to BP.

A trio of MPs, alongside pension fund charity FairPensions, are campaigning for the coalition government to set up protection regulation against environmental and social risk.

MPs Zac Goldsmith, Martin Horwood and Caroline Lucas have said pension funds need to take environmental risks much more seriously and that a regulatory framework is needed to support that.

It is estimated that over 18m Britons could be exposed to BP’s uncertain financial situation because they are either beneficiaries from pension funds that hold BP shares or are shareholders themselves.

Every £1 in £7 of dividends from FTSE 100 companies go to UK pension funds that have shares in BP, it is understood.

Joanne Segars, National Association of Pension Funds chief executive, said: “The worry for institutional investors is that this disastrous oil leak will hit BP’s prospects for longer-term growth and future dividends.”

Worries that BP’s plummeting share price, alongside legal threats from the US to hold off paying out the dividend could have a severe knock on effect are held among millions of Britons.

The group’s shares hit a new low yesterday, sinking below 1997 levels to 345.15p before recovering to 366p.

Further speculation that BP could be vulnerable to a takeover climbed after Standard Chartered noted that PetroChina could be a possible suitor.