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Bank Slashes Pensions For 55,000 staff
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Date: 3rd Dec 2009
Lloyds TSB Group Union (LTU), the independent trade union representing over 42,000 Lloyds Banking Group Staff, has branded as naked opportunism the Bank’s proposals to limit pensionable pay increases to 2% from 1st April 2010.
As part of its announcement of the harmonised terms and conditions in the merged Lloyds TSB and HBOS Banks, the Lloyds Banking Group has set out its proposals for the treatment of pensions across the Group.
The Bank proposes to limit pensionable pay increases to 2% or RPI if less for those employees in the defined benefit or ‘final salary’ schemes with effect from 1st April, 2010. In future, if a member of staff is awarded a salary increase of 5% on promotion then anything over 2% or RPI if lower will be non-pensionable. In effect, going forward staff will have two salaries: a basic salary and a lower pensionable salary.
Impact On Pension Benefits
Benefit projections provided to the Union by the Bank show that a member of staff earning £20k per annum with 25 years left to retirement will see their pension benefits reduced by £5k per annum. If that person lives until 80 they will see their total benefits reduced by at least £100k. Using the same calculations then someone earning £40k will see their pension benefits reduced by £200k and someone earning £80k per annum will see their total pension benefits slashed by some £400k. Even the member of staff earning £40k with 5 years left to retirement will see their pension benefits reduced by £2k per annum and if they live until 80 then their total benefits will be reduced by £40k.
In its communications the Bank will argue that it needs to control the risks in its pensions schemes. Such rubbish should be ignored and no one should be hoodwinked into believing that simply because RBS and M&S have made similar changes to their pension schemes then the Lloyds Banking Group must do the same. It doesn’t.
Commenting on the announcement today, Mark Brown, Assistant General Secretary at Lloyds TSB Group Union, has said:
"Lloyds Banking Group has taken the cynical decision to use the current economic and banking crisis as an opportunity to cut pension costs. It is desperately opportunistic and will be resisted strongly by LTU and its members. We will not stand by and see our members’ futures being sacrificed by the Bank jumping on the most dubious of bandwagons."
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