Pensions and Legacy Support
Many NOCs have well-established pension funds and legacy support systems for employees of state-owned production companies. The challenge becomes clear that the state supports a legion of former employees and transfers these mounting costs from state-owned oil producing companies. Many of these pension systems are underfunded and warrant careful scrutiny by investors. Pension benefit obligations are exactly that, an obligation or a liability of the NOC, and just another form of debt.
NOCs often have legacy payment structures that continue long after a given employee has left or retired from the production company. Many NOCs have the General Motors’ problem of generations of employees and their families still receiving ...
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