The Trustee of the Lloyds Banking Group Pension Schemes has said for the first time that it’s going to make top-up payments to those members who transferred out of their final pension schemes. It will start making those payments later this year. We estimate that £63 million will be distributed to members in the form of equalisation top-up payments.
Members will recall that in BTUs landmark High Court case Mr. Justice Morgan ruled that: “the Trustee owed a duty to a transferring member to make a transfer payment which was correctly calculated, and which reflected the members rights to equalised benefits.”.
It’s difficult to know the exact figure but we estimate that up to 30,000 members have transferred out of one of the Group’s final salary pension schemes over the last few years. At the time of the High Court hearing, Willis Towers Watson were asked to give an indication of the likely size of equalisation top-up payments for those who had transferred out of the schemes based on a reasonably indicative sample of members. Of the 270 transfers looked at Willis Towers Watson, approximately 54% were entitled to top-up payments ranging from £1 to £23,000. The average top-up payment was worth £3,900. Willis Towers Watson concluded its analysis by saying that: “we think it gives a “a good flavour” of the likely order of magnitude of potential top-ups to historic transfer value payments for each of the three schemes”. (No 1 Lloyds scheme, No2 TSB Scheme and HBOS Scheme).
If we take that average top-up payment of £3,900 and multiply it by the 54% of scheme members who have transferred out of the schemes, that comes to £63 million compensation for ex-scheme members.
And that’s on top of the £150 million we secured for pension scheme members following our first GMP High Court case. According to one actuary, Lane, Clark & Peacock, the cost to UK employers of equalizing GMP benefits could be between £15-20 billion.
Only BTU could have brought these two High Court cases because we refused to jettison our principles for a seat at the bank’s ‘negotiating’ table. A table which in reality doesn’t exist. The two staff in-house staff unions – Accord and Unite – talk the talk but when it comes to walking the walk to protect the interests of staff, they are simply not capable of doing what’s necessary. Naively they believe that cosying up to the Bank will benefit their members – it won’t. It never did.
Members with any questions on this should contact the Union’s Advice Team on 01234 262868 (choose Option 1).
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