HSBC AGM faces demonstration as workers demand pension justice
- Thursday 11 April 2019
WHEN: Friday 12 April 2019, 10:15
WHERE: International Convention Centre, 8 Centenary Square, Birmingham, B1 2EA
Members of Unite the union will be protesting outside the HSBC annual general meeting (AGM) tomorrow (Friday) about the bank’s refusal to give them pension justice.
Former and current employees are demonstrating to expose and stop an unfair practice known as ‘clawback’ after it emerged that thousands of them are having as much as £2,500 a year snatched from their hard earned company pension pay outs.
Dominic Hook, Unite national officer, said: “It is disgraceful that this profitable and wealthy multinational bank is withholding from pensioners a significant amount of their pension. These pensioners worked hard to earn this income for their retirement. The shameful practice of clawback could be costing a HSBC employee as much as £2,500 per year in lost pension pay-outs.
“Unite is calling on HSBC to address the practice of clawback which not only disproportionately penalises the lowest paid but also mainly female employees.”
There will be a media photo call at 10:15 before the AGM starts. Demonstrators, wearing a ‘clawback’ costume, will be holding placards and leafletting attendees of the meeting. The campaign will also launch a new video (below) about the practice of clawback.
Sharon McGeough-Adams, from the clawback campaign group said: “Thousands of pensioners, who like me worked hard for HSBC, now find themselves facing hardship in old age because HSBC is denying us the pension we deserve. This is no way for a wealthy profitable company to treat the loyal workforce who contributed to its success.
“Our campaign against clawback is because we only want the pension we were promised. HSBC needs to urgently end the injustice of its clawback policy which is causing many people to have to choose between food and fuel in their retirement.”
The campaign group is urging shareholders to:
- Vote ‘YES’ to Resolution 17
- Vote ‘NO’ to Resolution 3
The staff argue that clawback is grossly unfair, disproportionately penalising the lowest paid, mainly women, forced to take time off to raise children.
For further information contact Saba Edwards on 07768 693 953.
Notes to editors:
- Unite is Britain and Ireland’s largest trade union with over 1.4 million members working across all sectors of the economy. The general secretary is Len McCluskey.
What is clawback?
Clawback is the practice of cutting an employee’s company pension on the grounds that they will also receive the state pension. The first time people are likely to become aware of it is when they reach state pension age. This could be years after they started receiving their company pension, and discover that their income has suddenly been reduced.
51,000 former HSBC/Midland employees are affected by clawback. HSBC UK had 190,751 pension scheme members across 23 schemes as of December 2016. Only one scheme, the post 1975 to 1996 2/3rd Defined Benefit Scheme suffers clawback, representing 27 per cent of all HSBC pension scheme members.
Integrated pensions became statute in 1948 to help reduce the cost of the newly introduced national insurance contributions for employers by allowing clawback. It helped, as it was linked to a low level then of state pension. As the state pension increased the impact on the lowest paid became crippling and the public sector and many companies capped or cancelled clawback.
However, in 1974, almost 30 years later Midland Bank decided to implement this archaic practice. HSBC, which acquired Midland Bank, continued to call the pension a 2/3rd final salary scheme and not an integrated pension. It refer to the clawback as ‘STATE DEDUCTION’, a misleading term still used to this day.
The bank closed the scheme to new entrants in 1996 on the basis that the world had moved on and it was no longer appropriate to continue a non-contributory final salary pension scheme. Yet it continues clawback because “it was a common feature of schemes in the 1970s” so must continue.
Barbara joined Midland Bank in 1965. When she became entitled to her state pension at 60, HSBC reduced her annual pension income by £1,009 a year. This from a gross pension of just £3,507 – that’s a 30 per cent loss. Barbara had also lost 11 years of her pension rights simply for getting married, because of policies at the time.
By contrast a senior manager with a pension of £75,000 will lose a mere 3 per cent.