A few weeks ago, the Bank launched its new redundancy policy, which will see payments slashed for those staff who refuse the offer of a ‘reasonable’ alternative role (as defined by the Bank of course) or reskilling opportunity.
Lloyds has now announced – although members will be hard pushed to find it on the intranet site – that it’s making it easier to dismiss ‘under-performing’ staff by reducing the number of formal review meetings.
The Bank says:
“In some circumstances you may be offered the opportunity to leave before the formal performance review process has completed. This would be by mutual agreement. This is not an entitlement, and should you not want to leave under those terms, your manager will of course continue to support you to improve through structured and formal support, as required”. [Bank bold]
So, it’s about putting staff under pressure and forcing them out with nothing, not even the reduced redundancy terms.
What’s Going On
Members should be in no doubt that this change is part of a coordinated plan by Messrs Nunn and Doherty to make life more uncomfortable for staff at a time when we are awaiting a tsunami of non-branch job cuts on the back Mr Nunn’s strategic review. We understand that, once again, Accord and Unite have rolled over and accepted the changes on redundancy pay.
The moves on forcing staff back into offices and reviewing compressed hours form part of this same strategic initiative and there’s nothing remotely unplanned, accidental or incompetent about what’s going on. Indeed the policy has been thought through very carefully! – More of that in my next newsletter.
Pension Deficit and Pension Cap
Lloyds made a total of £2.2bn of pension scheme deficit reduction contributions in 2022. Those contributions were made to the group’s three main defined benefit (DB) pension schemes.
Fixed deficit reduction contributions of £800m were paid in full during the first quarter of 2022, while variable contributions of £1.44bn were paid during the year to cover the full amount of agreed contributions relating to 30 per cent of in-year shareholder distributions of £1.04bn, plus an additional £400m paid in December 2022.
The group’s three main DB schemes continue to have an actuarial funding deficit. However, Lloyds are saying that the schemes are in a “significantly stronger financial position than at the end of 2021, when the deficit was around £4bn”.
Lloyds expects to make further deficit reduction contributions of £800m in the first half of 2023, consistent with 2021 and 2022. However, Lloyds is discussing with the Trustee, whether further variable contributions would not be necessary in 2023 and beyond. Lloyds has said that it expected to have substantially agreed the triennial valuation with the Trustee by the end of the third quarter of 2023, along with a revised contribution schedule for any remaining deficit.
The Trustee needs to stand firm – and let’s be honest it’s not got a history of doing that – and not be bullied into allowing Lloyds to reduce its contributions until such time as the deficit is completely gone. Moreover, it should ensure that the Bank’s ‘contribution holiday’ doesn’t result any further black holes in the pension schemes.
The Bank is looking to save almost £1.4bn a year in pension contributions. It should use some of those savings to remove the pension cap. Some 11,000 active staff are in one of the Bank’s main DB pension schemes and they have seen their pension benefits wither on the vine over the last few years.
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