By Tapan Panchal
LONDON--Lloyds Banking Group PLC (LLOY.LN) Tuesday announced
changes to its defined benefit pension schemes, and said that the
changes would have a one-off benefit of 1 billion pounds ($1.68
billion) to its income statement.
The British retail bank will recognize the benefits from pension
scheme changes in the second quarter outside of underlying
profit.
Lloyds said that it has decided to revise the current cap on the
increases in pensionable pay, used in calculating the pension
benefit, to 0% from 2%, effective April 2. It revised the current
cap after consultations with affected employees and unions.
The company said that the effect of changes in pension schemes
on its capital position will depend on the funding position of the
defined benefit schemes on April 2. It expects the changes to have
a positive effect on the group's capital ratios.
Lloyds Banking Group operates six defined benefit pension
schemes with active members in the U.K. with total assets of
GBP32.6 billion as at Dec. 31, 2013.
Shares on Tuesday closed at 81 pence, valuing the company at
GBP57.81 billion.
-Write to Tapan Panchal at tapan.panchal@wsj.com
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