A group of cross-party MPs have teamed up with Unite to "demand justice" over the ‘clawback’ process, which could reduce the income of 50,000 HSBC employees by up to £2,500 a year.
The All-Party Parliamentary Group of MPs, led by Clive Betts MP, was set up after it was revealed that clawback could reduce the benefits of members of the Midland Bank, later HSBC, between 1975 and 1996 by up to £400m.
Last December, Pensions Minister Guy Opperman refused to withdraw the practice, which cuts employee’s pension on the grounds they will also be receiving a state pension, adding that it was a “decision for employers and trustees”.
Work and Pensions Committee chair, Frank Field, said: “More and more major employers have either scaled back, capped or scrapped the clawback of state pensions from the occupational pensions they pay out, and rightly so – the policy is an anachronism.
“Long serving employees who are coming up to retirement and discovering to their dismay that they will lose the equivalent of their state pension. Not a small sum, but it should be set against the bank’s last reported profit of £10.1bn – a profit that dedicated and long-serving bank staff, often on low pay, contributed to over decades of work.”
The group argue that the practice, called ‘state deduction’ by HSBC, “disproportionally affects the lowest paid”, and that poor communication has left many unaware.
Betts said: “There is real anger that a bank making billions of pounds a year is depriving long term and loyal former employees of the pensions they have worked so hard to earn. There is a moral imperative for them to reverse this policy now.”
An employee of Midland Bank and HSBC for 37 years, Sharon McGeogh-Adams added that it will mainly be women affected by clawback.
“Clawback is an outdated, unfair and discriminatory practice that does not belong in the 21st century. The vast majority of employers recognise this, and a wealthy bank like HSBC could readily afford to remove it,” she said.