High Court rules Lloyds must pay up to £150 million to female members of its pension scheme
In a landmark ruling, the high court has ruled that the Lioyds Banking Group must equalise its pension payments for men and women, after three women brought a claim for sex discrimination, complaining their pension incomes were increasing at a lower rate than those of their male colleagues.
The payments relate to Lloyds’ guaranteed minimum pension (GMP) schemes that ran between 1990 and 1997 for members who “contracted out” of the state earnings-related pension scheme (SERP).
The case which originally went to court in 2016, has since become a major class action lawsuit with around 3,000 members of the BTU – the trade union representing Lloyds staff – joining the case.
At the time in question, the union alleges that GMP schemes were “by their nature discriminatory between men and women” because the sexes are entitled to pensions at different ages and accrue benefits at different rates. Millions of other women who were members of such schemes could potentially now bring similar claims.
Since the ruling, the Department for Work and Pensions (DWP) has said that it will offer clearer guidance to employers on how to recalculate or “equalise” such schemes. The BTU claims that the judgment could have implications for as many as 7.8 million people in similar schemes in the UK, estimating that 35,000 scheme members will see their annual retirement income rise by more than £500, with a further 8,000 members gaining £3,000 or more. Pensions experts claim that the judgment could cost other major private pension schemes as much as £15 billion.
Darren Howarth, an actuarial director at pension consultants Broadstone, which represented the three female scheme members, said: “This judgment gives a level of clarification to what has been a long running saga.
“However, as the judgment has not committed to one particular method for equalisation, the costs and benefit implication for schemes will vary considerably.
“The detailed judgment is now being worked through and there are likely to be further questions arising which will allow trustees and firms some time to consider the effect.”
A Lloyds spokesperson said: “The hearing focused on what is a complex and longstanding industry-wide issue.
“The group welcomes the decision made by the court and the clarity it provides. The group and the pension scheme trustee will be working through the details in order to implement the court’s decision.”
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