Lloyds Trade Union warns of pension changes

Monday 26 February 2018

One of the UK’s largest banks is set to overhaul its pension scheme across offshore islands after a Jersey woman highlighted that gender discrimination within the system could have seen her pension reduced by nearly £6,000 over five years.

The union which represents a large majority of the bank's staff across the Channel Islands and in the Isle of Man told Express that women in Guernsey are likely to have been affected by these changes too.

The woman – a Lloyds employee whose identity has been kept anonymous in a report by Bailiwick Express, Jersey – spotted that the bank would make deductions from her state pension from the age of 60 under the scheme’s rules, while her male colleagues would not see any cuts until 65.

It meant that she would see her pension reduced by £1,190 per year or £5,950 over five years. As Jersey’s States’ pension starts at 65, male workers would enjoy a full pension without a penny taken away for an extra half-decade, while women are immediately subject to state pension deductions.

She raised the issue with Lloyds Trade Union (LTU), which represents more than 25,000 of the financial giant’s staff, in autumn last year.

While the union is one of the biggest representatives of Lloyds workers in the UK, the bank ‘derecognised’ it in 2015. Nonetheless, it is still able to represent individuals.

In this case, the LTU expressed strong concerns that Lloyds’ scheme contravened Jersey’s Discrimination Law, which lists sex as a protected characteristic.

LTU General Secretary Mark Brown told Express that the union then threatened legal action against the employer, fearing that entering into negotiations might mean that most members affected “would be dead before the policy was changed.” He said that Lloyds were quick to act following this threat.

By January, the Trustee of the Lloyds Bank Offshore Pension Scheme had pledged to cease the discriminatory treatment in the Jersey woman’s case.

“The Bank has now confirmed that the State Pension Deduction for this member will not be taken until she starts receiving her state pension, rather than when she started to get her Bank pension. She’s happy and we now want to make sure that other female members in the same position are treated in exactly the same way,” the union wrote in a members’ newsletter.

According to Mr Brown, the bank is now understood to be considering how to implement changes across their other offshore jurisdictions affected by the scheme.

Express spoke to Mr Brown again on Friday 23 February when he confirmed that female staff at all of the offshore jurisdictions could have been affected and he would advise them to check their pay slips again. 

Speaking previously, Mr Brown had said: “The inequality in treatment between males and females, which is based purely on gender, is unacceptable.

“We will be writing to the Lloyds Bank Offshore Pension Scheme Trustee Board insisting that all staff, regardless of gender, are treated exactly the same when it comes to the State Pension Deduction, including those female members of staff who have already retired and are paying the deduction now.”

The next step, Mr Brown told Express, was ensuring that any workers affected so far are reimbursed for what they might have lost.

He added that he was hopeful that other ‘big four’ banks might scrutinise their pension schemes as a result to ensure that they do not contain any discriminatory regulations.

In a statement, the LTU said "common sense" and the "threat of legal action for sex discrimination" had resulted in the Trustee of the Lloyds Bank Offshore Pension Scheme treating men and women the same when it comes to dealing with State Pension Deductions.

The statement continued: "It’s an unfortunate truth but it seems the Bank will only change its position on key issues when confronted with the law, if we’d been dealing with this issue through the negotiating process most members affected would have been dead before the policy was changed."

The LTU said: "generally speaking, similar arrangements to those operating in the UK apply to members of staff based in Offshore Banking (Jersey, Guernsey and Isle of Man). For UK members of one of the Lloyds Bank Pension Schemes, the State Pension Deduction or Clawback is made when the member receives their state pension. Under the Lloyds Bank Offshore Pension Scheme, the State Pension Deduction, which is calculated using the UK Basic State Pension, is made at age 60 for females and 65 for males. The State Pension Age in Jersey is currently 65 but is gradually rising to 67 over a 12-year period starting from 2012.

"If a man and woman who joined the Bank in Jersey at the same time and retire at 60 will be treated differently by the Lloyds Bank Offshore Pension Scheme. The man will get his full pension with no deduction until he reaches 65, whereas a woman’s pension will be immediately subject to a State Pension Deduction. Females are having the State Pension Deduction taken from their pensions but they are not getting the State Pension. How stupid is that?  The inequality in treatment between males and females, which is based purely on gender, is unacceptable.

"We will be writing to the Lloyds Bank Offshore Pension Scheme Trustee Board insisting that all staff, regardless of gender, are treated exactly the same when it comes to the Sate Pension Deduction, including those female members of staff who have already retired and are paying the deduction now.

"We will keep members informed of development. In the meantime, members with any questions on this Newsletter cam contact the Union’s Bedford Office on 01234 262868."