Royal Bank of Scotland has estimated that the High Court ruling on guaranteed minimum pensions (GMP) equalisation will cost £102m, its annual report has revealed.
The bank had previously thought that equalisation would cost them 0.2 per cent of its main defined benefit obligation, but updated its estimate following the ruling.
In October 2018, the High Court ruled that Lloyds Banking Group must equalise pension benefits for men and women in a landmark case, requiring other companies to do the same.
RBS' annual report stated: “In October 2018 the Court ruled on the requirement to and method for equalising guaranteed minimum pension benefits arising between 1990 and 1997 between men and women.
“In 2017 the group considered that equalisation would change the main section’s defined benefit obligation by 0.2 per cent. The estimate was updated following the clarity provided by the Court ruling and the impact of any future conversion exercise to rectify the position.
“The £102m cost on revision of the previous estimate of the financial assumptions in respect of equalisation is recognised in equity.”
The ruling is expected to cost pension schemes between 1 – 3.3 per cent of their schemes' liabilities, and could take up to three years for some schemes to complete.
Last month, Santander revealed it expected equalisation to cost £40m.
In its 2017 triennial funding evaluation, RBS recorded £47bn in liabilities with a £2bn deficit.
In October, RBS paid £2bn into the RBS Group Pension Fund’s main scheme, while committing to a further £1.5bn by 2020.
The banks main DB scheme has been closed to new entrants for over 10 years.
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