Royal Bank of Scotland Group (LON:RBS) has been slammed for planning to pass on £18 million a year in costs of running its defined benefit pension scheme to its employees. The news comes after the company, bailed out by the UK government during the financial crisis, posted yet another annual loss last month.
RBS’ share price closed little changed yesterday, shedding 0.25 percent to 235.50p. The shares have lost a third of their value over the past year.
Trade union Unite said in a statement yesterday that RBS had launched a ‘shameless’ attack on staff pensions, planning to pass £18 million of employer’s national insurance costs down to 27,000 employees who are members of the defined benefit pension scheme. The proposal follows government changes to state pensions, which will see the bank’s employer’s national insurance (NI) contributions increase by £18 million per year.
“Today’s announcement leaves RBS workers asking why they alone must carry the financial burden of an employer’s rising NI costs,” Rob MacGregor, Unite’s national officer for finance, said in the statement. The Times reported that RBS had confirmed the decision.
“Reforms made to defined-benefit pensions mean that the costs of our own scheme have risen. As a result, RBS is proposing to increase the cost of being a member,” the lender said, as quoted by the newspaper. “The bank will be consulting on this proposal with affected staff and employee representatives.”
RBS, which has been struggling to return to profitability following its £45.5-billion taxpayer-funded bailout, recently posted yet another full-year loss, pressured by hefty charges for restructuring and past misconduct, as well as a £4.2-billion payment into its pension scheme due to changes in its accounting policy.