LONDON, UNITED KINGDOM--(Marketwired - May 15, 2014) -
Attention: news and business correspondents
Lloyds Trade Union (LTU), the largest Union in the Lloyds Banking Group, will begin balloting its members on industrial action today following the Group's decision to freeze pensionable salaries for 35,000 staff with effect from 2nd April 2014.
£5bn In Lost Pension Benefits
LTU's analysis on benefit projections shows that:
- By reducing the pensions cap from 2% to 0% the average loss in pension benefits for ten typical jobs across the Bank is £143,000, ranging from £245,000 for a Risk Manager to £50,000 for a front line member of staff.
- If we averaged those losses across all members of the Bank's defined benefit pension scheme (some 35,000 members of staff) that equates to some £5bn in lost pension benefits.
Does The Pension Cap Fit - Not For Antonio Horta-Osorio
Buried deep in the small print of the recently published Report and Accounts are details of Antonio Horta-Osorio's second pension (his first pension is worth £568K per year) which was agreed by the LBG Board when he joined the Group. According to the disclosure his second pension scheme "provides benefits on a defined benefit basis (LTU's emphasis) at a normal retirement date of 65…the maximum allowance over that period is 26.5% of the higher of the GCE's base pay and reference salary in the 12 months before retirement (our emphasis again). An annual pension entitlement of £36,600 was accrued in 2013".
Now that the pensionable pay freeze has been imposed on staff against opposition from LTU, Antonio Horta-Osorio will be the only person left in the Group who will get retirement benefits on a defined benefit basis based on his salary in the last 12 months before he retires. So, 35,000 members of staff lose the final salary element of their pensions but the Group Chief Executive will keep it.
Ballot Of Members
Ballot papers will be issued on the 15th May and the ballot will close on Friday, 6th June 2014. Members are being balloted on the question of whether they are prepared to take part in industrial action short of a strike. In the event of a vote in favour of industrial action, the intention is that industrial action will be sanctioned which will include a refusal to work unpaid overtime and a work to rule.
LTU's proposed industrial action will have a devastating impact on the Group's ability to meet the day-to-day banking needs of its personal and business customers.
LTU's General Secretary, Mark Brown said:
"What's really upset staff more than anything is the Board's decision to impose the pensionable pay freeze on 35,000 staff whilst no such freeze was imposed on the Group Chief Executive's second pension.
The public are sick to the back teeth of Bank Executives who are only interested in protecting their own terms and conditions of employment at the expense of staff and taxpayers. The Chief Executive should be subject to the same pensionable pay freeze as everyone else. If it's not good enough for him, then it's certainly not good enough for our members.
The pensionable pay freeze itself is both unnecessary, given the Bank's improved performance and ability to generate capital, and is unjust.
Members don't want to take industrial action but they have been put in an invidious position by the Group's stubborn determination to impose its will regardless of the objections of staff."
LTU - with 40,000 members - is the largest independent trade union representing staff in the Lloyds Banking Group. Within the merged Bank, Accord would be the second largest union with over 26,000 staff and Unite the third, representing only approximately 6,000 staff across the Group.