Cuts to Lloyds staff pension scheme branded 'naked opportunism'

Published on Thursday 3 December 2009 12:23

LLOYDS Banking Group today announced plans to reduce the benefits staff receive under its final salary pension schemes.

• The Government still holds a 43% stake in Lloyds Banking Group

The part-nationalised bank is proposing limiting the level of staff pay increases which will be used in pension calculations to either 2% a year or Retail Prices Inflation, which ever is lower, from April next year.

The move would lead to a reduction in the pensions that the 56,000 members of the groups' schemes receive, as a lower salary would be used when calculating their retirement income.

But Lloyds Banking Group said the change was necessary to enable it to keep the schemes, which have already been closed to new members, open and to run them on a sustainable basis.

The proposed change, which is subject to consultation, is part of a move by the group to harmonise the terms and conditions of its Lloyds TSB final salary pensions and the HBOS scheme, following its takeover of the HBOS group.

But the Lloyds TSB Group Union accused it of "naked opportunism" and claimed the change would lead to staff effectively having two salaries, their actual salary and a lower one upon which their pension was based.

It said the move would have a big impact on the annual pensions people received, particularly for staff who were still 25 years off retirement.

Mark Brown, assistant general secretary at Lloyds TSB Group Union, 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."

A Lloyds spokesman said: "We are committed to the (final salary) scheme but we think it is right that it is run on a sustainable basis. These are proposals and they are subject to consultation."