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 woman – a Lloyds employee whose identity has been kept anonymous – 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.
The controversial policy was originally put in place in the 1970s when the bank took the opportunity to contract some of its employees out of the additional States pension scheme, and pay fewer national insurance contributions as a result. The result of this was that staff who joined the bank’s pension schemes between June 1977 and March 1997 will have a reduction in their bank pension on receipt of their States pension.
Similar arrangements currently apply in Guernsey and the Isle of Man. LTU pledged to keep the pressure on Lloyds to make sure reforms were made across the islands: “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.
Express has asked Lloyds for a comment, and is waiting for a response.
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