ARCO, BP Amoco severance plans offer options to employees

Combinations of severance pay, “enhanced retirement plans,” medical insurance “bridged” to retirement, offered by two companies

Tom Hall

PNA Staff Writer

As agreed to by BP Amoco and depending on eligibility, ARCO employees may choose from one of four severance options if they are let go as a result of the proposed merger with BP Amoco.” At the April 9 Alaska Support Industry Alliance breakfast, ARCO Alaska President Kevin Meyers said to qualify to receive the severance packages employees must be working for ARCO Alaska when the deal with BP Amoco closes. ARCO Alaska spokeswoman Dawn Patience told PNA in early April that two of the options are “enhanced retirement plans.

The first option, called “5 and 5”, adds five years to both age and years of service, which could make some employees eligible for immediate retirement. They would also receive 1.5 weeks of pay per year of service up to a maximum of 36 weeks.

A second option is called the “rule of 60” — if the employee’s years of service and age add up to 60 points, then he or she is eligible for the “5 and 5” plan, but it would only be effective at actual retirement age. The “5 and 5” formula for severance pay would apply to this option.

Option three provides a special termination allowance payment of three weeks pay per year of service with a minimum of 12 weeks up to a maximum of 72 weeks.

Option four, the change of control provision, is open to all employees, and provides a minimum of six months of compensation.

In the event that some BP Amoco employees are cut because of the merger, severance plans would also apply, although plan details are sketchy. BP spokeswoman Carla Beam told PNA that basically, terminated employees would receive one month of pay for every year of service. Employees would have to qualify for two months of severance pay and employees with more than 12 years of service would have their severance pay computed on a graduated scale. For some employees close to retirement, BP Amoco would “bridge” their medical benefits, and employees who transferred into the state would qualify for relocation expenses.