Lloyds TSB/HBOS merger under threat from pension trustees

| December 30, 2008 | 0 Comments

Pension fund trustees at HBOS are threatening to block the proposed merger with Lloyds TSB until better protection is put in place for the scheme’s 80,000 members.

Out of the nine trustees, seven are due to meet at the end of the week to decide whether to challenge the merger in the Scottish courts. The remaining two trustees are conflicted due to positions within HBOS.

Roger Boyes, acting chairman of the trustees and former Halifax finance director, said the issue is for Lloyds to provide us with some comfort that the scheme’s members will get their pensions.

Earlier this month, the trustees expressed their concerns prior to the HBOS meeting of shareholders to approve the deal, when the trustees said the merger would ‘substantially’ weaken the fund’s protection.

The merger has already been given the go ahead by the majority of shareholders at both banks.

A spokesperson for Lloyds said HBOS pension trustees and members of the HBOS Scheme can expect to see a strengthening of the supporting covenant.

We will seek to give equivalent treatment to all pension schemes under the enlarged group and have made this clear to the HBOS trustees, added the spokesperson.

Should the merger go ahead, it will create a new banking giant called Lloyds Banking Group, which will comprise almost 150,000 staff and 3,000 branches.

However, substantial job losses are expected as a result of the merger.

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