RBS accused of raid on staff pension

Royal Bank of Scotland (RBS) is accused of raiding staff pensions by passing on £18m in annual payroll costs to its 27,000 defined benefit scheme members. As of 6th April, certain UK companies with defined benefit schemes will face increased national insurance costs as Britain's Government moves to abolish the second state pension which, in RBS case, will leave employees shouldering the bank's increased payroll costs by making them pay an extra 2% of their salary into their defined benefit pension scheme. Unite's National Officer for Finance, Rob MacGregor says this is a "shameless move" that will shatter the "fragile trust RBS has worked to restore since the bank's previous regime ended in calamity."

State-backed Royal Bank of Scotland has been accused of a 'shameless' raid on staff pension by passing on £18million in annual payroll costs to its 27,000 defined benefit scheme members.

From 6 April, companies across the UK with certain defined benefit schemes face increased national insurance costs as the Government moves to abolish the second state pension.

By the end of next year, the changes will leave employees shouldering the bank's increased payroll costs by forcing them to pay an extra 2 per cent of their salary into their defined benefit pension scheme.

Shouldering costs: State-backed RBS is planning to pass on £18million in extra annual pension costs to its 27,000 defined benefit scheme members, reports suggest

An RBS spokesperson told This is Money: '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 of the scheme. The bank will be consulting on this proposal with affected staff and employee representatives.'

In response, Rob MacGregor, Unite's National Officer for Finance, said: 'This shameless move will shatter the fragile trust RBS have worked to restore since the bank’s previous regime ended in calamity'.

The charges are in addition to the employees’ own national insurance costs, which are also set to rise in April.

DEFINED BENEFIT PENSION SCHEME A defined benefit pension scheme is one where the amount you’re paid is based on how many years you’ve worked for your employer and the salary you’ve earned.

Mr MacGregor said: 'Today’s announcement leaves RBS workers asking why they alone must carry the financial burden of an employer’s rising NI costs when they are already working more for less, with tax bills that stretch family budgets to the limit.'

He added: 'RBS employees, who have struggled to bring the bank back from the brink deserve better. It is not too late for the bank to think again and withdraw these unfair charges.'

The changes will be introduced in two stages, with a 1 per cent increase in October 2016 and a further 1 per cent increase in October 2017.

Job cuts: Last week, RBS, which is 73 per cent owned by the taxpayer, announced it is cutting 550 jobs across its investment advice and protection products teams

The bank has set aside £2billion for mis-selling, litigation and 'goodwill impairments.' According to Unite, part of this £2billion could have 'easily' been used to absorb the £18million increase in national insurance costs.

Last week, RBS, which is 73 per cent owned by the taxpayer, announced it is cutting 550 jobs across its investment advice and protection products teams.

For customers, the job cuts mean that only those with £250,000 or more to invest will be able to get face-to-face advice as the bank shifts its focus to providing 'robo advice'.

One day after announcing 550 job cuts, RBS said it also plans to cut 448 investment banking jobs as it seeks to cut costs and reduce the size of the division.

The lender is cutting back office and middle office positions at its investment bank, including support and technology services for frontline staff. It is understood 300 roles are to be relocated to the bank's operations in India.