Well, we’ve done it again. In the most anticipated pension case in 30 years, the High Court has ruled today that the Lloyds Banking Group pension schemes must equalise guaranteed minimum pensions (GMPs) for men and women.
The outcome of this case will have profound implications for both public and private sector pension schemes in all industries across Britain. We estimate that up to 5 million pension scheme members in 6,000 private sector pension schemes, the vast majority of whom are female, will benefit from today’s ruling. The Government has estimated that the cost of this case at between £10bn to £20bn.
Background To The Legal Case
This case, which was taken by three female members of the Bank’s pension schemes, started in July 2016 when the Union first wrote to the Trustee and the Bank. In that letter we said:
“In our view, supported by leading counsel, in almost all cases the increases applied under the Schemes’ rules to the part of the pension that is in excess of their GMP discriminate directly on the grounds of sex, to the detriment of female members, in breach of the sex equality rule deemed to be incorporated into the rules of the two Schemes by section 67 of the Equality Act 2010. They also mean that women receive less pay than men (in the form of their pension) in breach of the sex equality clause deemed to be incorporated into their contracts of employment by section 66. This discriminatory treatment is also contrary to the directly effective rights of female members of the Schemes to equal pay under article 157 of the Treaty on the Functioning of the European Union”.
Following that letter, almost 3,000 female members joined our class action lawsuit against the Bank and Trustee Board. It was that direct action by members which resulted in the case being referred to the High Court earlier this year.
Method Of Equalisation
The High Court was also asked how the Bank’s pension schemes should achieve pension equality, if that is what it determined should happen?
It was the most complex question raised in the proceedings and the one that took up much of the Court’s time. The actuaries and lawyers identified a number of possible methods, three of which have possible variants. The High Court has ruled in favour of Method C2, details of which can be found here. It’s too early to say at this stage what Method C2 will mean because more work needs to be done by the actuaries but we calculate that 35,000+ pension scheme members will get pension uplifts of £500+, with 8,000 pension scheme members getting uplifts of £3,000+. Those are early figures, which are likely to change. The exact details of how the Court’s decision will be implemented will be subject to further discussions between the respective lawyers.
We will keep members informed of developments through regular Newsletters.
Walking The Walk
Let’s be clear, had we succumbed to the Bank’s bullying and jettisoned our principles for a seat at the ‘negotiating’ table we would not have been able to pursue this case on behalf of all pension scheme members. The Bank’s two 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. The old approach to collective bargaining, which was simply about controlling staff and securing union legitimacy, is dead but no one’s told Accord and Unite. The power dynamic has now shifted and it’s all about connective action, which means using customers, the courts, regulators, politicians and media to further the interests of staff. That’s what we will continue to do.
Members with any questions on this Newsletter can contact the Union on 01234 262868 (Choose Option 1) or they can email us at email@example.com.