Lloyds bank faces legal challenge over female staff pensions

lloyds bank

Lloyds Banking Group is facing a legal challenge to close the gap in pensions for its female staff, reports The Guardian.

The Lloyds Trade Union, which has 30,000 members, has begun action against the bailed-out bank over an issue it estimates could cost major UK companies £20bn.

The action relates to guaranteed minimum pensions (GMPs), whereby companies provided an equivalent pension to those wanting to top up their retirement savings.

“It’s been accepted by almost everyone that GMPs are by their nature discriminatory between men and women,” the LTU said. This is because men and women accrue benefits at different rates and are entitled to their pensions at different ages, 65 for men and 60 for women.

The government published a consultation on the matter in 2012 but has not legislated on how the situation should be resolved for an estimated 5 million women who have contracted out of pension schemes.

Mark Brown, general secretary at LTU, is now seeking action. He said: “GMPs is one of the last bastions of pensions discrimination and the issue needs to be resolved now. Up to 5 million women, including up to 148,000 in Lloyds Banking Group, have either got or are going to get smaller pension increases than men and that is simply unacceptable.”

The LTU’s legal advisers have launched a legal action on behalf of three women which could lead to a class action on behalf of 28,000 female members of the defined benefit pension schemes. The case could rise to 148,000 individuals, based on estimates of active scheme members, those who have deferred entitlements and existing pensioners. Lloyds’ schemes have about 275,000 active, deferred and pensioner members.

Lloyds declined to comment.

The LTU was “derecognised” by the bank last year.