If changing to the new pension scheme was such a good idea why did TSB not do it last year or the year before that? The simple answer is TSB is desperately looking to save money and the pension scheme is the first casualty of that war on costs. And it won’t be the last. In different circumstances, TSB would never have done this but the mounting costs of the IT meltdown, which are not over yet, means that there are no sacred cows anymore. So, don’t be surprised if the bonus scheme is the next thing to go.
In a recent stand-up, Mr. Suresh Viswanathan, the new Chief Operating Officer, said that TSB spends £850 million a year and £185 million of that was on “running the bank”. He said that similar size organisations would expect to spend about £85 million. His £85 million figure won’t stand up to any sort of scrutiny but the point he’s making is absolutely clear. TSB is aiming to find about £100 million of savings and that means that the costs of doing business, including all of those associated with staff are going to come under the spotlight like never before.
According to TSB it’s not yet made a final decision to move the pension scheme to Legal and General. Does anyone seriously believe that? TSB says: “We’re consulting with all Partners … about proposals to modernise our pensions. The consultation starts today, 1st October 2019 and ends on 30th November 2019”. You could be forgiven for thinking that TSB’s 60-day consultation period has been put in place because the bank is interested in the views of staff. You’d be wrong, the decision to move the scheme has already been taken. According to the Pensions Act 2004, employers wanting to make changes to their pension schemes must consult with members and the consultation period must be not less than 60 days.
Heritage Lloyds members will recall that when it introduced the 0% pension cap it also had a 60-day consultation period. However, despite the fact that 97% of staff responding opposed the bank’s plans, it went ahead and imposed it anyway. That’s what TSB will do. Notwithstanding that, it’s important that members oppose the bank’s plans in the consultation process and we will be writing to them individually providing guidance on how to do that.
According to the Pensions Regulator the bank must consider “the responses received before making any final decisions”. We would expect TSB to publish the results of its consultation exercise and explain why it’s decided to ignore the views of staff, if that’s what it chooses to do. If it doesn’t provide that information, then we will write to the Pensions Regulator, who can use its enforcement powers to fine the bank.
Members with any comments or questions can contact the Union’s Advice Team on 01234 716029.