Lloyds Banking Group gains £910 million after DB pension changes

Lloyds Banking Group has announced a pension curtailment gain of £910 million following changes to its defined benefit (DB) schemes.

In the first half of 2010, the group capped the amount of any future increases to pensionable salary to the lower of the retail price index (RPI) inflation, each employee’s actual percentage increase in pay, or 2% of pensionable pay.

Additionally, in the second half of 2010, there was a change in the commutation factors in certain DB schemes.

These changes led to a reduction in the DB obligation of £1,081 million, and a reduction in the group’s unrecognised actuarial losses of £171 million, resulting in a net curtailment gain of £910 million.

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