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Bank Agree To Appoint Independent Actuary
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Date: 8th Mar 2007
LTU has said that one of its concerns with the running of the Lloyds TSB No 1 and No 2 Pension Funds, especially given the increased powers of the Trustees, is the role of the Scheme Actuary. At the moment Watson Wyatt advise both the Bank and Trustees. Although there is no criticism of Watson Wyatt’s performance LTU do believe that there could be a perceived conflict of interest that can only be resolved by either the Bank or the Trustees appointing their own actuarial advisers.
LTU first raised this issue with the Bank in 2004 when it said “...the Trustees should have their own legal and actuarial advisors whom they can call upon to provide them with truly independent advice when there may be a potential conflict between the interests of Pension Fund members and the Bank as a corporate entity. It should be for the Trustees and not the Bank to determine when they need access to those advisors”. Whilst the potential for a conflict of interest has always existed, the fact is that now, when the schemes are in deficit, the Group would normally prefer to minimise, whilst the Trustees would prefer to maximise, the rate of employers’ contributions.
Having resisted changes the Bank has now agreed with LTU’s proposal and in a letter to the Union Ewan Brown the Chairman of Trustee Directors for the No 1 and No 2 Pension Funds has confirmed that the Bank will be replacing Watson Wyatt with different actuarial advisers. Mark Brown, Assistant General Secretary of LTU, said “ We applaud the Bank’s U-turn and now we just want the Trustees to bring forward the next actuarial valuation so that we have a clear picture of the state of the Bank’s pension funds.”
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