Lloyds Banking Group consults on DB pension changes

Lloyds Banking Group is consulting with employees in its defined benefit (DB) pension schemes about a proposed cap on pensionable pay.

The proposals, which would impact 35,000 DB pension members, would mean that these employees will be paid a pension calculated using their current salary rather than adjusting the pension in line with future pay rises.

The banking group’s proposal aims to ensure its pension schemes are more balanced across the group, since two-thirds (around 65,000) of its employees are members of its range of defined contribution (DC) pension schemes.

A spokesperson from Lloyds Banking Group said: “In line with many other UK organisations, Lloyds Banking Group has been reviewing its pension arrangements.

“The group believes that the defined benefit schemes remain an important part of the employees’ benefit package, but wants to ensure that its pension benefits are more balanced across the group, particularly because two-thirds of the group’s employees are not members of the defined benefit schemes.

“The group is also conscious of its obligations to ensure the viability of the schemes and its ability to meet its obligations over the long term.

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“On that basis and following its review, the group is therefore proposing to make changes to its defined benefit pension schemes.

“Unlike a number of organisations, the group has decided that it will keep its defined benefit pension schemes open to future accrual, but has proposed a change to the pensionable pay cap.”