Trustees of HBOS’ final salary pension scheme want to delay the firm’s merger with Lloyds TSB until solid guarantees are given to protect the future of the defined benefit pension scheme.
They have requested that the Court of Session in Edinburgh withhold approval for the merger after Lloyds TSB declined to issue a group-wide guarantee for the HBOS scheme.
An open letter issued to the pension scheme’s 79,000 members, co-signed by independent HBOS pension scheme trustees Roger Boyes, Michael Deakin and Mike Provan, has stated concerns that the terms of the current Scheme of Arrangement could reduce cash flow to the-scheme.
But the trustees’ view is not shared by either HBOS as a whole or Lloyds TSB which both state that the proposed merger, which has the support of shareholders, will strengthen the protection offered to scheme members. A HBOS spokesman said: “Following the deal, the HBOS pension scheme will be backed by an even bigger and stronger group. We believe this provides significant reassurance for all HBOS colleagues.”
A spokesman for Lloyds TSB added that the merger would strengthen the supporting covenant. “HBOS pension trustees and members of the HBOS scheme can expect to see a strengthening of the supporting covenant when when the proposed acquisition of HBOS completes. We will seek to give equivalent treatment to all pension schemes under the enlarged group and have made this clear to the HBOS trustees.”