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LTU Campaign On Actuaries Succeeds
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Date: 9th Mar 2007
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.
One of the Union’s concerns with the running of the Lloyds TSB No 1 and No 2 Pension Funds in recent years, especially given the increased powers of the Trustees, has been the role of the Scheme Actuary. Until now Watson Wyatt have advised both the Bank and Trustees. Although there has been no criticism of Watson Wyatt’s performance the Union has suggested there could be a perceived conflict of interest that could 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 Assistant General Secretary Mark Brown 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 to proceed with different actuarial advisers.
The Union has said that it applauds the Bank’s U-turn and now want the Trustees to bring forward the next actuarial valuation so that there can be a clear picture of the state of the pension funds.
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