A big change is coming to the BP Employee Savings Plan on July 1st, 2025. Focused on maintaining a competitive retirement benefit while streamlining compliance with federal regulations, BP has announced a major change to its 401(k) company contributions.
Effective July 1, 2025, the company will transition from a 7% elective matching contribution to a combination of a 3% non-elective contribution and a 4% elective matching contribution.
Under the new structure, BP will automatically contribute 3% of each eligible employee’s salary to their 401(k) plan, regardless of whether the employee contributes. In addition, the company will match 100% of employee contributions up to 4% of salary. This new arrangement maintains a potential total company contribution of 7%.
The introduction of a non-elective 3% contribution is being made under the “safe harbor” 401(k) provisions.
Safe harbor provisions are designed to help companies meet IRS nondiscrimination testing requirements. These tests ensure that 401(k) plans do not unfairly favor highly compensated employees over other workers.
By committing to a guaranteed 3% contribution for all eligible employees, regardless of their own deferral rates, the company avoids the need for annual testing and potential corrective measures, such as refunding contributions to executives. BP’s recent acquisitions of new companies changed the ratio of highly compensated workers, which necessitated making this change to keep the Employee Savings Plan compliant.
For employees, this change has great advantages.
BP already provides a significant opportunity to save in the Employee Savings Plan. Through this shift in contributions, BP remains committed to providing competitive, equitable retirement benefits.
Not all financial advisors have experience with BP's various benefit plans. We've helped several BP professionals and guided them through the nuances of BP's ESP, ECP, and EBP plans.
Our advisors are fiduciaries working in your best interest and can provide you with a tailored plan designed to help you reach your financial goals. Contact us for a complimentary, hassle-free first meeting where our advisors can learn about your current goals and help you develop a tailored plan to achieve them.