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New Severance & Retirement Arrangements
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Date: 3rd Aug 2006
LTU’s Executive Committee has now considered the Bank’s full proposals and has decided to seek further negotiations.
Under the Bank’s proposals there would be no augmentation of pension for early retirement – either through the payment of non-actuarially reduced pensions for staff in the Defined Benefit Schemes or extra pension payments for staff in the Defined Contribution Schemes. Whilst it will still be possible to provide non-actuarially reduced pensions as part of an early retirement arrangement for staff in the Defined Benefit Schemes (Final Salary Schemes) it will not be possible to augment pensions by making extra pension payments to staff in the Defined Contribution Schemes. The Bank says that it does not want to treat the two groups of staff differently and therefore proposes not to do anything for the staff it could help – those in the Defined Benefit Schemes.
This seems to be an unnecessary stance and one that leaves the Bank open to the criticism that it is dressing up a cost saving as a point of principle. The Union will be meeting the Bank to continue negotiations on this issue.
In any event, in aggregate the overall cost to the Bank of the proposed changes is considerably less than the cost of the current arrangements and will provide it with savings running into many millions of pounds. Whilst LTU is supportive generally of the changes being proposed, warts and all, it is unacceptable that the Bank should use the meeting of its legal obligations as a way of saving money particularly when at the outset of negotiations it said its proposals would be cost neutral.
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