A court has ordered Lloyds Banking Group PLC (LON:LLOY) to amend its pension schemes to make benefits equal for men and women after being accused of discrimination.
Judge Paul Morgan ruled that the bank’s pension trustee had a duty to change its schemes to equalise treatment after three female members complained that women’s pensions were rising at a slower rate than men on the same schemes.
The judge stipulated a number of methods Lloyds could use to amend its pension schemes. The changes to its schemes, which will affect about 230,000 members, could cost bank between £100mln and £150mln.
“These issues have created uncertainties in the occupational pensions industry in this country for many years,” Morgan said in his written ruling, seen by Reuters on Friday.
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Union BTU had previously said the case could cost the bank up to £500mln.
It has also said the case could also have implications for as many as 7.8 million people in thousands of other schemes across the country. BTU estimates the cost of equalising all affected pensions would be £20bn.
The case relates to employees who had their secondary state pension payments, which were supplementary to their basic state pension, paid by their employer instead of the government.
Under the arrangement, known as “contracting out”, the employee and employer benefited from lower tax contributions. The employer would guarantee to pay a minimum amount broadly similar to what the employee would have received from the government.
However, the calculation employers were required to use to determine pension benefits created inequalities and in many cases women received a less amount.
A Lloyds spokeswoman said in a statement it was assessing the details of the ruling to implement the new requirements.
“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.”