UK’s top firms are set to put billions aside for fairer women’s pensions

BRITAIN’S biggest companies are preparing to pile billions of pounds of new pension costs on to their balance sheets in the New Year to even out payments between men and women.

BT, Dixons Carphone and Stagecoach are among firms that have quietly revealed new liabilities following a landmark sex discrimination court ruling against Lloyds Banking Group. The new costs will add major pressure to companies already contending with large black holes in their pension schemes.

BT has warned investors that it fears the new rules, set out by the High Court in October, could cost the company ‘hundreds of millions of pounds’. The FTSE 100 behemoth is expected to reveal the full scale of the damage in the coming year.

Other companies have supplied more specific figures.

High street retailer Dixons Carphone has told its shareholders that the rebalancing will cost the firm £18 million.

Buses and trains firm Stagecoach has put the price at £24.2 million, which a spokesman for the group said did not represent a ‘major impact’.

Chemicals giant Johnson Matthey expects to rack up new liabilities of £30 million. Britvic, the soft drinks giant behind Robinsons and 7Up, has estimated a price of between £7 million and £20 million. Packaging company DS Smith has logged a £15 million cost, while hospitality firm Compass Group has guided investors towards a cost of £20 million to £40 million.

The case against Lloyds was originally brought by three women who claimed sex discrimination because their pensions were increasing at a lower rate than those of their male colleagues.

It specifically related to Guaran- teed Minimum Pensions (GMPs), which employees were entered into between 1990 and 1997.

Employees accrued GMP benefits when they contracted out of the additional state pension or Serps (State Earnings Related Pensions), which were top-ups to the basic retirement payout workers receive. Money was instead paid into their company pension scheme, which was expected to pay at a ‘guaranteed minimum’. The gender divide arose because the scheme assumed a retirement age of 60 for women and 65 for men.

After the judgment, Lloyds estimated its costs could amount to £150 million. A spokesman said at the time: ‘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.

‘ The group and t he pension scheme trustees will be working through the details in order to implement the court’s decision.’

Stephen Scholefield, a partner at law firm Pinsent Masons who specialises in pensions, suggested some shareholders are likely to be taken aback by the scale of the issue. ‘ It will probably surprise investors,’ he told The Mail on Sunday. ‘ There will be [ some] who assume the pension schemes are what they are and you shouldn’t have these things falling out of the woodwork.’

Scholefield estimates the Lloyds ruling is likely to lead to costs of around £10 billion for UK firms.

In addition to companies that have put out cost estimates, a number of other big name firms have flagged the issue and indicated they are busy calculating the hits they are likely to take.

HSBC, AstraZeneca and Greene King have referenced the Lloyds ruling in shareholder documents, as have Severn Trent, Mothercare, Capita and Mitie.