HSBC Board Wins $590 Million Battle Over Pension Deductions
13 April 2019 - 12:56AM
Dow Jones News
By Adam Clark
HSBC Holdings PLC's (HSBA.LN) board has defeated a campaign to
end the bank's practice of reducing pension payments to some
employees who receive state benefits.
At the bank's annual general meeting on Friday shareholders
overwhelmingly rejected a resolution to abolish the "state
deduction" applied to the pensions of around 52,000 U.K. staff who
joined HSBC between 1974 and 1996. Only 3.5% of votes cast were in
favor.
British unions and some lawmakers pressured the bank to get rid
of the deduction, which campaigners claim penalizes the lowest
paid. HSBC had warned the proposed move could cost it 450 million
pounds ($590 million) and said the overall pension benefit remains
competitive.
"We must be fair and equitable to all remaining 140,000 members
of the U.K. pension scheme, more than half of whom are defined
contribution members, and not just to those final salary members
who would benefit if the state deduction ceased," Chairman Mark
Tucker said at the AGM in Birmingham, England.
HSBC had already staved off one potential source of shareholder
discontent by slashing its executives' pension allowances to 10% of
their base salary from a previous level of 30%, bringing them into
line with the majority of the bank's employees.
Write to Adam Clark at adam.clark@dowjones.com
(END) Dow Jones Newswires
April 12, 2019 10:41 ET (14:41 GMT)
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