Lloyds defends HBOS pension move

Published on Saturday 3 January 2009 12:47

LLOYDS TSB is adamant that HBOS's pension scheme will be stronger when the two banks merge, despite the decision by scheme trustees to try to postpone the deal until their concerns are addressed.

On Friday, HBOS's pension trustees agreed to ask the Court of Session in Edinburgh on January 12 to delay giving the deal legal approval until Lloyds TSB guarantees it will protect the scheme's 80,000 members. The trustees have also commissioned an independent valuation of the scheme by actuaries Watson Wyatt that could reveal deficits of up to 5bn.

Trustees want Lloyds to guarantee HBOS's liabilities. Lloyds has not agreed to do this, but has argued that the pension scheme will benefit from the merger.

A spokesman for HBOS said: "We are very much of the view that our deal with Lloyds TSB is the best form of protection for our employees.

"Following the deal, the HBOS pension scheme will be backed by an even bigger and stronger group. We believe this provides significant reassurance for a l l HBOS colleagues."

The HBOS scheme trustees hope to postpone completion of the merger beyond its scheduled date of January 16, following their representation at the court hearing on January 12. However, they said they "decided to take this step reluctantly".

Sources said the challenge is "not likely to be a deal breaker".