BP US Domestic Relocation Policy
College and Entry Level New Hires
Date: Updated October 1, 2015
Version 4.0
BP US Domestic Relocation Policy – College and Entry Level New Hires
1
PURPOSE OF THIS POLICY ................................................................................. 4
1.1
RELOCATION PROGRAM AND POLICY ADMINISTRATION ........................................ 4
2
WHEN TO USE THIS POLICY, APPLICABILITY, AND EFFECTIVE DATE ......................... 4
3
REPAYMENT AGREEMENT .................................................................................. 5
4
CONTRACTUAL MATTERS .................................................................................. 5
5
RELOCATION COSTS / EXPENSE REIMBURSEMENT................................................ 6
6
RELOCATION ALLOWANCES ............................................................................... 6
6.1
LUMP SUM ...................................................................................................... 6
6.2
COST OF LIVING ALLOWANCE (COLA) ................................................................ 7
6.3
MISCELLANEOUS EXPENSE ALLOWANCE ............................................................. 8
7
RENTER ASSISTANCE ........................................................................................ 8
7.1
CURRENT RENTERS: LEASE CANCELLATION ......................................................... 8
7.2
RENTING IN THE NEW LOCATION ........................................................................ 8
8
HOMEOWNER ASSISTANCE ................................................................................ 8
8.1
CURRENT HOMEOWNER: DUPLICATE HOUSING ................................................... 8
8.2
HOME FINDING ASSISTANCE .............................................................................. 9
9
HOUSEHOLD GOODS SHIPMENT......................................................................... 9
9.1
AUTOMOBILES ............................................................................................... 11
9.2
MOVES INTO/OUT OF ALASKA AND OUT OF HAWAII AND PUERTO RICO ................. 11
9.3
PREPARING OIL/GAS EQUIPMENT THAT SHIPS WITH THE HOUSEHOLD GOODS ...... 11
9.4
SELF MOVE ................................................................................................... 11
9.5
MOVES INTO/OUT OF TEMPORARY HOUSING ..................................................... 12
9.6
MOBILE HOME TRAILER .................................................................................. 12
10
FINAL MOVE .................................................................................................. 12
11
PROFESSIONAL RECERTIFICATION..................................................................... 13
12
TAX CONSIDERATIONS .................................................................................... 13
TAX SUMMARY CHART ..................................................................................................... 14
APPENDIX: COST OF LIVING ALLOWANCE (COLA)............................................................. 15
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BP US Domestic Relocation Policy – College and Entry Level New Hires
BP US Domestic Policy Summary*
College and Entry Level New Hires
Eligibility
Lump Sum
Cost of Living
Allowance
(COLA)
Miscellaneous
Expense
Allowance
Lease
Cancellation
Rental /Home
Finding
Assistance
Duplicate
Housing
Household
Goods
Shipment
Final Move
Professional
Re-certification



Must meet IRS distance test (i.e. 50 mile test).
Must complete relocation benefits within 1 year of work start date.
Provided to offset expenses associated with: home finding trip, temporary living, travel to report to
work, travel to return home to ship household goods and final move meals.
(For Alaska moves and moves with participating early experience programs only)

Financial assistance may be provided if the new work location is deemed to have a higher cost of
living than the old work location.

Determined by BP’s third party data provider.

One-time allowance to offset incidental expenses.

Equivalent to one week of starting salary.


If the transferee is required to pay a lease cancellation fee, the reimbursable amount is limited to
the lesser of three (3) months rent, capped at $3,500, the balance of the rent due under the terms
of the lease, or the amount of any fee directly related to canceling the lease.
Destination assistance coordinated by the relocation service provider for both rental and home
finding.
(For current homeowners only)

Reimbursement may begin 31 days after the transferee starts incurring duplicate housing
expenses.

Reimbursement until the close date on the former residence or three months, capped at $3,500,
whichever comes first.

Coordination of packing, shipping and unloading provided by the Relocation Counselor.

Automobiles : BP will pay to ship one (1) car if the move is less than 400 miles; two (2) cars if the
distance is over 400 miles.
.

Self move options available – reimbursement for trailer or truck rental available.

Reimbursement for airfare, lodging (one night in old and one night in new location).

If distance is less than 250 miles, mileage reimbursement at current IRS mileage rates, in lieu of
airfare, for up to 2 vehicles.


This provision is to support the employment transition needs of the
transferee’s spouse or partner.
BP will provide tax assistance (gross up) for certain taxable payments to assist with the additional
federal, state, local income taxes and FICA. See policy for details.
*Please refer to the policy document for complete details on each policy component.
Tax Assistance
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BP US Domestic Relocation Policy – College and Entry Level New Hires
1
Purpose of This Policy
This document outlines the provisions that BP employees may be eligible to receive in
respect to a US domestic relocation. It is the intent of this policy to cover specified
reasonable costs and professional assistance associated with moving to the new
location. The benefits incorporated into this policy are not intended to fit every
conceivable individual situation or to be applied on a "keep whole" basis. Additionally, the
provisions of this policy are intended to provide fair and appropriate levels of financial and
relocation assistance for the disruption caused by a relocation, but not to seek to enrich
or provide financial reward in line with individual performance/contribution.
The BP domestic and international mobility policy framework (the mobility framework), is
the parent document of this policy and sets out the governance framework for this and
other mobility policies.
1.1
Relocation Program and Policy Administration
BP has partnered with a relocation service provider to assist transferees in coordinating
their relocation. Upon receiving a relocation authorization from BP, the relocation service
provider will assign a dedicated Relocation Counselor who will be the transferee’s
primary point of contact throughout the relocation process. The Relocation Counselor
will guide the transferee through every step, answer any questions and outline the
information that the transferee needs to provide during the move process. The relocation
service provider will not process the relocation authorization earlier than 60 days prior to
the transferee’s work start date.
2
When to use this Policy, Applicability, and Effective Date
Relocation assistance described in this policy may be offered to authorized moves of
college hires and entry-level exempt employees of BP operations in the U.S, excluding
US territories and possessions, except for Puerto Rico. This includes college hires and
entry-level exempt employees who are homeowners and renters.
The relocation assistance described in this policy may be offered to employees
participating in any US Based Early Experience Program. These programs include, but are
not limited to: Challenger Program (excluding international and Alaskan North Slope
rotations), Discover Program, Sunrise Program, IST Challenger Program, and BP HR
Explorers. For the avoidance of doubt, this policy is not applicable to employees who
have completed or graduated from the early experience program.
This policy is effective for US domestic relocations authorized on or after October 1,
2015.
To be eligible for relocation assistance described in this policy, all of the following criteria
must be met:




The transferee must be relocated at the Company’s request.
The transferee must be a full-time exempt employee.
The transferee may be a current homeowner or a renter.
The relocation must meet the IRS distance and time test:

Distance Test: The distance between the former residence and the new
work location (as determined by BP) must be 50 miles greater than the
distance between the former residence and the former work location.
For example:
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BP US Domestic Relocation Policy – College and Entry Level New Hires
Old home to new job = 60 miles
Old home to old job = 8 miles
Difference =
52 miles





Time Test: The transferee must work at least 39 weeks in the new location
during the 12-month period immediately following the relocation.
The transferee must complete each provision for which the transferee is eligible
as well as submit all expenses within one (1) year of the transferee’s work start
date or at any earlier date requested by BP or its relocation services provider.
The transferee must move to within a reasonable distance of the new work
location. The transferee’s strategic performance unit/business unit/function may
require that the transferee move within a specified mileage of the work location.
One set of relocation benefits will be provided per household. If two or more BP
employees are members of the same household and move together, only one
package of relocation benefits will be paid.
Family members covered under this policy include the transferee’s
spouse/partner and any dependent in accordance with the Domestic and
International Mobility Policy Governance.
3
Repayment Agreement
Moving a new hire transferee requires a substantial investment by BP. Therefore, if the
new hire transferee voluntarily terminates his/her employment within one year from the
work start date, the new hire transferee will be required to reimburse BP, as detailed in
the Relocation Repayment and Deduction Authorization Agreement, for some of the
financial assistance provided by BP specific to the relocation. The repayment agreement
does not apply to current employees who are being transferred.
4
Contractual Matters
This policy is not an employment offer, contract or guarantee of continued employment.
The transferee’s employment with BP is at-will, which means that it is not for any
particular period of time, and may be terminated by the transferee or by BP at any time,
with or without cause or notice. In addition, this policy may not be construed as a
benefit plan, and payments under this policy will not be considered salary for purposes of
benefit or compensation plans.
While this program is intended to be ongoing, BP reserves the right to end, suspend or
amend its relocation policy in whole or in part, at any time. Further, the Company retains
ultimate discretionary authority to interpret the provisions of this policy and to determine
eligibility for benefits. There will be no cash payments in lieu of utilization of any
relocation components contained in this policy. At its sole discretion, BP may modify the
terms paid in any given situation or to any given transferee. The Company’s decisions
regarding the application and interpretation of this relocation policy are final and binding.
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BP US Domestic Relocation Policy – College and Entry Level New Hires
Relocation Costs / Expense Reimbursement
The Relocation Counselor will process and audit the transferee’s relocation expense
reports for those relocation expenses that will be directly reimbursed to the transferee.
Payment will be made by BP Payroll.
5




Receipts must be submitted for all expenses (where required) except tips, tolls and
expenses paid with funds from the Lump Sum Payment and Miscellaneous Expense
Allowance.
Relocation expenses are separate and distinct from business expenses and must be
submitted to the relocation service provider.
Transferees should keep a copy of the submitted expense reports (including the
receipts) for their records.
Monthly credit card statements may not be used in lieu of original receipts.
Expenses other than those expressly included in this policy will not be included in any
lump sum payment nor be reimbursed.
6
6.1
Relocation Allowances
Lump Sum
The relocation policy includes a lump sum benefit for expenses associated with the
home finding trip, temporary living, travel to report to work, travel to return home
to ship household goods and final move meals.
BP has determined that this lump sum benefit plan is fair to the transferee, eliminates
significant administrative time and allows transferees maximum flexibility in managing
their relocation.
These funds are the transferee’s to spend, as he/she deems necessary for expenses
incurred in connection with the relocation. The transferee may retain any portion of
these funds not spent. Any shortfall of funds is to be covered by the transferee at
his/her expense. Transferees do not need to submit for individual expenses, but should
retain receipts for their personal records.
The lump sum benefit and the Miscellaneous Expense Allowance are typically processed
together and paid to the transferee in one payment. Both the lump sum and
Miscellaneous Expense Allowance are paid via the relocation service provider through
BP payroll. Tax assistance is provided for federal, state, and local income taxes and
FICA.
Calculation of the lump sum is based on data provided by Runzheimer International, an
independent company that specializes in this area, and is based on the following
parameters:
Page 6

Family size for home finding trip and final move meals.

Authorized days for home finding trip: 4 days for a current renter, 7 days for a
current homeowner.

Authorized days for temporary living: employee only: 30 days

Travel for home finding trip: employee and employee’s family: 1 round trip, coach
class airfare (business class airfare for flights exceeding 4 hours), 14-day advance
purchase. If move distance is less than 250 miles, mileage is at the current IRS
mileage rate, in lieu of airfare.
BP US Domestic Relocation Policy – College and Entry Level New Hires
6.2

Travel for the report to work trip and the trip to return home to ship goods:
employee only: 1 round trip, coach class airfare (business class airfare for flights
exceeding 4 hours), 14-day advance purchase. If move distance is less than 250
miles, mileage is at the current IRS mileage rate, in lieu of airfare.

Lodging for home finding: employee and employee’s family: full service hotel based
on BP T&E business travel guidelines.

Lodging for temporary living: employee only: one bedroom corporate apartment or
hotel, as applicable based on BP T&E business travel guidelines.

Rental car costs (when applicable) for temporary living and house hunting trip:
intermediate class rental car based on BP T&E business travel guidelines.

Number of meals associated with house hunting and final move trip, based on BP
T&E business travel guidelines..

If the employee is relocating to Alaska, he/she will have additional incidental
expenses due to the need to adapt to a different climate. To help offset some of
those expenses, the transferee will be provided with an increased amount
calculated by Runzheimer International that will be based on relocating family size.
This is intended to help cover costs for such items as: winter clothing, snow tires,
winter driving classes, and other aspects of daily life unique to Alaska.
Cost of Living Allowance (COLA)
For college hires and entry level exempt employees relocating to Alaska at BP’s request
and employees participating in any US based early experience program offering the
COLA benefit, the transferee may be provided with financial assistance for a specified
period of time if he/she relocates to an area with a higher cost of living, as determined by
BP. This assistance will be provided if the cost of living at the new work location, as
determined by BP, is higher than at the old work location. This determination is based on
information provided by Runzheimer International, an independent company that
specializes in this area. The Relocation Counselor will advise the transferee if he/she
qualifies for assistance.
The transferee may perceive the area as high cost but the data provided by Runzheimer
may not support that perception. Personal choice with regard to housing and lifestyle is
a factor in that perception. BP is not responsible for the continuation of a standard of
living to which the transferee has become accustomed. Replicating the old location
square footage, price per square foot, amenities, etc. is not a goal of BP’s program. The
COLA is not subject to negotiation. For further information, please see the Appendix.
The Relocation Counselor will provide the amount of the COLA for which the transferee
is eligible and coordinate the delivery of the payment through BP’s payroll. The date the
transferee’s move authorization is processed by the relocation service provider will be
used to capture the COLA indices and the new annual salary used in the calculation.
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BP US Domestic Relocation Policy – College and Entry Level New Hires
6.3
Miscellaneous Expense Allowance
The transferee will be provided with a Miscellaneous Expense Allowance to offset
expenses associated with the relocation but not specifically covered by the program.
The allowance is equal to one week of the transferee's starting salary. Tax assistance is
provided for federal, state and local income taxes and FICA.
Some examples of expenses which the allowance is intended to help offset are:
Miscellaneous Expense Allowance - Description of Coverage
7
7.1
 Laundry and dry cleaning
 Connection of household appliances
not performed by the moving company
 Driver’s license/automobile
registration
 Storage beyond the 60 days provided
 Cable TV, satellite, phone and utility
hook-up/installation
 Pet transportation, boarding/kennelling
and care
 Newspapers and movies
 Meals during temporary living
 Shipment of items not covered under
the movement of household goods
program
 Additional tax obligations not covered
by BP’s Tax Assistance
Renter Assistance
Current Renters: Lease Cancellation
Once the transferee has been notified of the relocation, the transferee should locate a
copy of the lease and review the lease cancellation terms. The transferee should also
notify the landlord of the vacate date as soon as possible. The lease may contain a
transfer clause, which would allow the transferee to cancel the lease. If the transferee is
required to pay a lease cancellation fee, the reimbursable amount is limited to the lesser
of three (3) months rent, capped at $3,500, the balance of the rent due under the terms
of the lease, or the amount of any fee directly related to canceling the lease. The
transferee is responsible for any damage payments or loss of security deposits.
Homeowners are not eligible for lease cancellation.
The transferee should obtain a receipt from the landlord for the lease cancellation fee.
The receipt along with a copy of the transferee’s old lease must be submitted to the
relocation service provider for reimbursement. The lease cancellation fee is taxable
income and will be tax assisted.
7.2
Renting in the New Location
The Relocation Counselor will refer the transferee to a Destination Consultant, who will
provide assistance in locating rentals in the new location. To avoid lease cancellation
fees in the future, the transferee should insist upon a provision in the new lease stating
that the cancellation charge will be waived or perhaps reduced if BP relocates the
transferee in the future.
8
8.1
Homeowner Assistance
Current Homeowner: Duplicate Housing
If the transferee is currently a homeowner and the transferee purchases or rents a
residence at the new location before selling the former residence, the transferee may be
reimbursed for certain expenses related to maintaining the former residence. The
duplicate housing benefit is not intended to cover deferred maintenance, seasonal clean-
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BP US Domestic Relocation Policy – College and Entry Level New Hires
up and/or winterization of a lawn, emergency or non-emergency home repairs, maid
service, home watch services, etc.
Reimbursement may begin 31 days after the transferee starts to incur duplicate housing
expenses (determined by the closing date on the transferee’s new home or, if renting,
the date on the transferee’s new long-term lease agreement). The transferee will receive
duplicate housing expense reimbursement until the closing date on the former residence
or three (3) months, capped at $3,500, whichever comes first. The following expenses
will be reimbursed:






Mortgage interest for a 1st mortgage only.
Real estate taxes.
Homeowner’s association dues.
Homeowner’s insurance, including the additional fee that may be required to provide
for burglary and vandalism coverage for a vacant house.
Lawn care, snow removal, pool maintenance (only for a vacant residence), and
Utilities (only for a vacant residence).
This provision applies and is paid, upon receipt of documentation substantiating payment
of each expense, such as copies of tax bills, insurance premium notices, utility bills, etc.
Duplicate expense reimbursement does not begin until the 31st day. Duplicate housing
expenses are taxable income and will be tax assisted.
8.2
9
Home Finding Assistance
The relocation service provider offers a variety of services to help the transferee find a
new community and select a home to purchase or to rent. These include counseling
(where available) regarding mortgage prequalification, mortgage application, broker
referral, and apartment finding for renters. The transferee should not contact a real
estate agent before calling the Relocation Counselor.
Household Goods Shipment
The Relocation Counselor will coordinate the physical movement of the transferee’s
household goods. To ensure enough time to make arrangements, the transferee should
contact the Relocation Counselor in the early planning stages of the move. The
Relocation Counselor will arrange for a professional mover to contact the transferee to
assess packing and shipping requirements and to plan times for packing, pickup and
delivery of the transferee’s household goods to the new home and explain the claims
process.
The following expenses to move normal household goods from the transferee’s old
location to the new location will be paid:

Packing, loading and transportation.

Unloading and initial placement of furniture.

Unpacking.

Disconnection and reconnection of appliances.

One debris pick-up within 45 days of delivery for any crates and cartons the
transferee unpacks (this does not include personal trash).

Storage up to 60 days when the transferee is required to vacate the home at the old
location before the transferee is able to occupy a home at the new location.
If the transferee is unsure about whether some of the items are considered normal
household goods, the Relocation Counselor can provide clarification.
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BP US Domestic Relocation Policy – College and Entry Level New Hires
Non-covered Moving Expenses. Transportation of items not covered under this policy
includes (but is not limited to):

Building supplies such as lumber, wall board, sand, cement, bricks, insulation,
shingles, fences.

Boats or canoes, 14 feet and over, or motorized over 10 horsepower.

Coal or firewood and/or other flammable or hazardous materials.

Coin and/or stamp collections, currency, jewelry, furs, securities, wine, precious
metals or stones.

Collectibles.

Important documents.

Frozen foods and/or perishables.

Pets and/or livestock.

Doghouses, tree houses, dog runs.

Storage sheds, playhouses and swing sets

Trailers for camping and utility.

Free standing hot tubs.

Above ground swimming pools.

Yard ornaments including concrete furniture, statues, gazebos, wishing wells.

Any item too large for two people to handle safely.
Non-Covered Services Related to Moving: The following services are not covered
under this policy:

Appraisals of antiques and/or high value items.

Disassembly and/or reassembly of playhouses, portable hot tubs, above ground
swimming pools, satellite dishes, storage sheds.

Removal and/or reinstallation of antenna.

Removal and/or hanging of curtains and drapes.

Removal and /or reinstallation of permanently attached objects such as carpeting,
drapery fixtures or rods, electrical fixtures, mirrors or pictures, plumbing fixtures,
attached shelving.

Removal of goods from attics or crawl spaces not accessible by permanent stairwell
or other easy access.

Electrical or plumbing services over and above normal appliance hook-up (i.e.,
installing a water line, gas line or upgrading an outlet).
These lists are not all-inclusive, and the transferee should discuss any questions
with the Relocation Counselor.
An extra pick-up or delivery stop is permissible if approved in advance by the Relocation
Counselor and provided the stop is en route to the transferee’s new location. The
maximum charge allowed for an extra stop is $100. Pick-up and delivery dates for
household goods are scheduled only Monday through Friday.
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BP US Domestic Relocation Policy – College and Entry Level New Hires
The household goods will be insured up to a maximum of $200,000 for possessions that
are being transported to the new location or held in storage. Should the transferee need
additional insurance coverage, the transferee may be required to substantiate the
estimate by providing a copy of the transferee’s Homeowner's Personal Contents policy
page to the Relocation Counselor indicating the transferee’s coverage amount and/or
other documentation as determined by BP prior to an increase in the insurance coverage
beyond $200,000.
Charges for shipping household pets, additional insurance on items of extraordinary
value or any out-of-policy expenses are the transferee’s responsibility and may be offset
by the Miscellaneous Expense Allowance, if applicable.
9.1
Automobiles
BP will pay to ship one (1) car if the move is less than 400 miles; two (2) cars if the
distance is over 400 miles. Any cars shipped must meet eligibility requirements. The
Relocation Counselor can provide details.
9.2
Moves into/out of Alaska and out of Hawaii and Puerto Rico
In addition to the standard shipment detailed above, employees moving into or out of
Alaska, and out of Hawaii and Puerto Rico are allowed an air shipment based on family
size, as follows:
 Family Size 1
 Family Size 2
 Family Size 3+
 One “D” container
 One “LDN” container
 One “LDN” plus one “E” container
The air shipment is intended for basic living necessities that the transferee may need
while waiting for the household goods shipment to arrive. In addition, transferees
moving in or out of Alaska may separately ship one recreational boat or vehicle of up to
14 feet in length.
9.3
Preparing Oil/Gas Equipment That Ships with the Household Goods
In support of BP’s corporate focus on safety, oil/gas powered equipment such as
motorcycles, small recreational vehicles, riding lawn mowers, push lawn mowers, yard
equipment, chain saws, weed eaters, etc., will be properly prepared, at BP’s expense, to
ship with the transferee’s household goods. Proper shipment preparation requires the
oil and gas to be drained from the equipment by a certified professional company.
Equipment not properly drained and ready to ship on packing day must be shipped as a
second shipment at the transferee’s expense and responsibility.
9.4
Self Move
For safety reasons, BP does not encourage transferees to do a self move. However, if
the transferee chooses to do this, in lieu of a professional mover, the transferee may
choose one of the following options:
Option 1: The transferee will be reimbursed for the use of a trailer attached to the
transferee’s own vehicle to transport all or part of the personal effects. The
transferee will be reimbursed for the trailer expense at 4 cents per mile in
addition to the Company’s normal mileage rate for the use of the transferee’s
own vehicle. A receipt for the trailer rental must be submitted to the
relocation service provider for reimbursement.
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BP US Domestic Relocation Policy – College and Entry Level New Hires
Option 2: The transferee will be reimbursed for renting a truck for moving the personal
effects. Truck rental expense and fuel for the truck will be reimbursed.
Receipts for the truck rental and gas must be submitted to the relocation
service provider for reimbursement. Additionally, the transferee will be
reimbursed final move mileage for driving the transferee’s vehicle to the new
location.
9.5
9.6
Moves into/out of Temporary Housing
The transferee may choose one of the following options if he/she needs to move into
temporary living quarters:

The transferee will be reimbursed for a self move from his/her old location to
temporary living quarters at the new location, and then to permanent quarters at the
new location if the transferee rents unfurnished quarters at the new location prior to
the availability of the transferee’s permanent residence.

The transferee may have the van line move a partial shipment (up to 50% of goods)
into the temporary quarters and the remainder of the transferee’s shipment into
storage, providing that the shipments are delivered consecutively. The van line will
then move the transferee’s household goods from both the temporary living quarters
and the storage facility into the transferee’s permanent residence when appropriate.
Mobile Home Trailer
A mobile home trailer is defined as a regular, single body structure with permanent
wheels attached. The wheels and tires may be removed when the trailer is stationary. If
the transferee’s principal residence is a mobile home trailer, certain expenses related to
moving it are covered; however, if the cost of moving the trailer exceeds its value, the
Relocation Counselor will discuss other options with the transferee. The maximum
amount reimbursed is $3,500. If the transferee’s mobile home trailer is to be moved, the
following will be reimbursed:







Packing and unpacking normal household furnishings and personal effects, and
insurance for loss or damage to them while in transit and storage.
Removal and reinstallation of blocks, anchors and existing under-skirting.
Moving non-concrete steps and disassembly of outside buildings.
Disconnecting and reconnecting gas, electricity and water to existing hook-ups.
Attaching wheels/tires for the move and removing them for set-up in the new
location.
State permits, tolls and escort fees.
Storage at point of origin or destination.
The cost of wheels, tires and tubes, or other accessories not listed, are not covered
under this policy. If the transferee moves the trailer with his/her own vehicle, the
transferee will be reimbursed at 4 cents per mile for the actual pulling of the trailer, in
addition to the Company's normal mileage rate for the use of the transferee’s own
vehicle. If the transferee does not want to move the trailer him/herself, or is not able to,
the Relocation Counselor will advise the transferee of his/her options.
10
Final Move
Lodging and travel associated with the final move trip are reimbursed separately (from
the lump sum payment). The transferee will be reimbursed for coach class airfare
(business class airfare for flights exceeding 4 hours), 14-day advance purchase for the
transferee and his/her relocating family. If the move distance is less than 250 miles,
mileage will be reimbursed at the current IRS mileage rate, in lieu of airfare, for up to
two vehicles driven to the new location.
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BP US Domestic Relocation Policy – College and Entry Level New Hires
In addition, reimbursement for one night's lodging at the old location (after the
transferee’s furnishings have been removed from the former home) and one night's
lodging immediately upon arrival at the new location plus one night's lodging for every
400 miles travelled should the transferee drive to the new location will be provided.
Additional expenses incurred, including those while awaiting delivery of household
goods, will not be reimbursed. Actual receipts will need to be submitted to the
relocation service provider for reimbursement. Some of these expenses are excludable
from income; those that are not will be tax assisted.
11
Professional Recertification
This provision is to support the employment transition needs of the transferee’s
spouse or partner. BP will reimburse actual, reasonable and necessary out-of-pocket
expenses related to professional re-certification up to a maximum reimbursement of
$1,800. Tax assistance is provided.
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Tax Considerations
The IRS considers all expenses paid to the transferee, or on the transferee’s behalf, as
taxable benefits except those expenses associated with:



The household goods shipment.
Storage of household goods for the first 30 days.
Final move expenses, excluding meals, and mileage over the current federal
excludable rate.
Payments subject to tax withholding in compliance with IRS regulations will appear on
the transferee’s W-2 for the year in which the payment was disbursed. BP will provide
tax assistance (“gross-up”) to assist with additional federal, state and local income taxes
and FICA. Payments which are not tax-assisted are identified as such in this policy and
noted on the tax summary table located on the following page.
During the year, tax assistance calculations are based on supplemental rates. At the end
of the year, a “true up” adjustment is made to adjust the tax assistance rate to the
marginal rate associated with the transferee’s net taxable earnings. Other income such
as investments, spousal income, or itemized exemptions will not be considered. It is
important to note that the tax assistance provided may not always result in exact
or complete gross-up of applicable expenses. The transferee will be responsible
for any additional tax liability not covered by the tax assistance calculation; he/she
should consider using the Miscellaneous Expense Allowance for this purpose.
Moves delayed beyond the permitted 12-month IRS rule may not receive tax assistance,
at BP’s discretion. Tax assistance amounts are paid directly to the applicable federal,
state, and local agencies on the transferee’s behalf. They will be reported in the
withholding boxes on the transferee’s W-2. BP is not responsible for, nor will the
transferee be reimbursed for, any federal or state capital gains taxes related to the sale
of the transferee’s home.
Note:

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The transferee is solely responsible for maintaining all records and receipts
necessary to claim any allowable federal (and where applicable, state and local)
income tax deductions.
BP US Domestic Relocation Policy – College and Entry Level New Hires




The transferee is responsible for all of the information contained in the transferee’s
tax returns. BP and the relocation service provider accept no liability for information
contained in the transferee’s returns.
The transferee should keep records and receipts of all expenses to manage the tax
return filing process at year-end.
In January of the year following the year in which the transferee moves, a year-end
tax reporting statement itemizing all relocation expenses will be prepared and sent to
the transferee from the relocation service provider.
The transferee should consider consulting a professional tax advisor for details on
the tax implications of the relocation. Along with seeking the assistance of a
professional tax advisor, the transferee should consider reading the following IRS
publications:
o Publication 521 – Moving Expenses
Tax Summary Chart
Reimbursement
Added to W-2
Taxable Income
Tax Assistance
Lump Sum Payment
Yes
Yes
Yes
Cost of Living Allowance
(COLA)
Miscellaneous Expense
Allowance
Lease Cancellation
Yes
Yes
No
Yes
Yes
Yes
Yes
Yes
Yes
Duplicate Housing
Yes
Yes
Yes
Final Move Travel
Excludable
No
N/A
Household Goods
Shipment
Storage of Household
Goods (1st 30 days)
Storage of Household
Goods (31-60 days)
Professional Recertification
Excludable
No
N/A
Excludable
No
N/A
Yes
Yes
Yes
Yes
Yes
Yes
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BP US Domestic Relocation Policy – College and Entry Level New Hires
APPENDIX: Cost of Living Allowance (COLA)
PURPOSE
The intent of this program is to provide assistance to college and entry level new hires
moving to Alaska at BP’s request and employees participating in any US based early
experience program offering the COLA benefit The assistance is designed to provide the
transferee with temporary financial support to offset some of the increased cost that
he/she may experience as he/she acclimates to the new location. The cost of living
support will be phased out over six years. BP maintains a competitive salary program and
will not compromise its integrity by providing indefinite cost of living payments. The
relocation service provider will provide the administration of the cash payments via
payroll. The date the transferee’s move authorization is received will be used to capture
the COLA indices and the new annual salary used in the calculation. Transferees who are
renters in the new location and who are eligible for financial assistance are only eligible
for a cash payment.
CALCULATION
BP uses Runzheimer International, an independent company that specializes in this area,
to determine the living cost differences between the transferee’s existing work site and
the new location. The new location will be based on the work site location, or, if within a
territory with no physical office, the major city within the territory. If there are multiple
major cities within the territory, or there is no major city, the new location will be based
on the location within the territory with the most business.
Living costs include income tax, housing, transportation and goods and services
expenditures, based on a representative standard of living for the transferee’s income,
family size and housing situation (rent or own). Income will reflect the transferee’s
current annual base salary. By using representative standards of living, rather than using
individual lifestyles, BP provides fair, equitable and objective cost of living assistance to all
eligible transferees.
Runzheimer is the only source that will be used to determine the actual benefit under this
policy.
If the analysis determines that the cost to live in the new location is higher than the existing
work site location, cost of living support will be provided.
The following table depicts an example of how BP determines the term and amount of the
payments for moves into Alaska:
Cost-ofLiving
Eligibility
Term
6 Years
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Payment
Year
Payout
Percentage
of Differential
Amount
Payout Percentage
of Differential Amount
Eligible Mortgage
Subsidy Limit *
1st
2nd
3rd
4th
5th
6th
350%
100%
80%
70%
50%
30%
20%
350%
100%
80%
70%
50%
30%
20%
BP US Domestic Relocation Policy – College and Entry Level New Hires
EXAMPLE:
Annual Cost-of-Living Differential = $5,000
1st Year Payment = $5,000
2nd Year Payment = $4,000
3rd Year Payment = $3,500
4th Year Payment = $2,500
5th Year Payment = $1,500
6th Year Payment = $1,000
Total Payment = $17,500
*If the transferee chooses the mortgage subsidy option, payouts will be applied to a
temporary reduction in interest rate for up to the maximum of 6 years. Amounts used to
qualify can vary based on product, loan amount and interest rate. If the differential cannot
be used toward a mortgage subsidy within one year, the transferee may receive the
remainder under the cash payment option detailed below.
APPLICATION OPTIONS:
When the analysis determines that cost of living support is warranted, the transferee
may:
1. Receive cash payment of the cost of living support, OR
2. Apply the cost of living support to the mortgage buy down (mortgage subsidy),
OR
3. Receive cost of living support as a combination of the cash payment and mortgage
buy down subsidy.
If the transferee receives the mortgage subsidy or the combination of the cash payment and
subsidy, the payout may not exceed the cash payout amounts, nor the payout duration
indicated in the table above.
CASH PAYMENT OPTION
BP provides cost of living support over six years. The first payment will be made upon
receipt by the relocation service provider of a copy of the transferee’s signed home
purchase or lease agreement. If the transferee continues to be eligible, he/she will
receive the remaining payments near the anniversary date of the first payment.
The payout is calculated at the time of the move and is not adjusted for subsequent
salary changes. Federal and applicable state and/or local income tax, Social Security tax
up to the annual limit, and Medicare tax will be withheld. In an actual calculation, the
destination state tax will apply. Tax assistance is not provided on cash COLA payments.
TEMPORARY MORTGAGE BUY DOWN (MORTGAGE SUBSIDY)
A temporary mortgage buy down is a subsidy paid by BP to reduce the interest rate and
monthly payments on the transferee’s mortgage for the first six years in the new location. A
buy down addresses the need to assist the transferee with mortgage payments while he/she
adapts to a higher cost area.
Under BP’s temporary mortgage buy down program, the national lender issues a mortgage
to the transferee at a fixed interest rate called the “note rate”. The note rate is typically set
at the prevailing market rate for 30-year fixed-rate mortgages.
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BP US Domestic Relocation Policy – College and Entry Level New Hires
The first years of the loan are subsidized by BP up to the amounts indicated in the table
above. As the subsidy diminishes over time, the buy down rate gradually increases in
planned increments to the note rate. When the transferee’s subsidy eligibility term is
reached, the subsidy stops, the buy down rate equals the note rate, and the transferee
continues making monthly payments at the note rate for the remainder of the mortgage
term.
The transferee must be able to independently meet the lender’s affordability criteria at the
note rate in order to use the mortgage subsidy benefit. The temporary mortgage buy down
is available only if the transferee secures his/her mortgage through one of BP’s national
mortgage lenders. If the transferee refinances, cost of living support will continue provided
the transferee uses the same mortgage company. Each month, an amount equal to the
mortgage interest subsidy paid on the transferee’s behalf to the lender will be reported
as taxable income to the transferee through payroll. This amount will appear on his/her
W-2 at the end of the year.
Given that no two relocations or personal fiscal circumstances are identical, the
Company encourages the transferee to obtain professional advice before deciding which
financial assistance option to select. Once the transferee has made a selection, that
decision is irrevocable.
Annually, BP will fund (through the transferee’s chosen lender) a net subsidy amount –
i.e., after deduction of amounts calculated by BP to cover estimated taxes or required
tax withholding – to be applied by the lender toward the transferee’s aggregate monthly
mortgage payment obligations. In order to satisfy tax withholding rules, BP will advance,
on the transferee’s behalf, estimated taxes directly to tax authorities (generally assuming
supplemental wage tax rates) on the annual net payment to the mortgage holder. While
these tax amounts advanced on the transferee’s behalf will be includable in his/her W-2
taxable income, BP will process an offsetting hypothetical tax deduction payroll entry to
offset the additional income from these tax/withholding advances on BP’s net payment
to the lender. Tax assistance is not provided on mortgage subsidy COLA payments. (The
transferee should pursue with his/her own personal tax advisor any issues related to the
transferee’s ability to deduct the net mortgage subsidy amount for federal, state, and/or
local income tax purposes.)
SUBSEQUENT RELOCATION
If the transferee is relocated again to an equal or lower cost area, the COLA will be
discontinued as of the start date in the new destination location. If the transferee is
relocated to a higher cost area, the COLA will be re-calculated and the transferee will
receive a new COLA once he/she meets the eligibility requirements to activate a COLA.
The transferee must continue in BP employment in the destination location to
maintain eligibility to receive COLA financial assistance including instances where
the employee is on an international assignment governed by Core or TIR policy types.
Employees on an international rotator assignment or an assignment governed by the
Short Term Assignment (STA) policy will continue to be eligibleAny unpaid amounts at
the transferee’s termination of employment will be forfeited, without regard to the
reason for termination and without regard to the otherwise scheduled time of
payment.
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