Lloyds TSB Faces One Billion-Pound Claim, Sunday Times Says
May 25 (Bloomberg) -- Lloyds TSB Group Plc may face a legal claim of as much as one billion pounds ($2 billion) to its Scottish Widows life-insurance unit because of advice it gave to 100 company pension plans, the Sunday Times reported, citing documents filed to the Financial Services Authority.
During 1999 and 2000 the company pension plans were advised to switch into equity-based investments giving up guarantees against pensioners living longer than expected, the paper said. The pension plans have lost about 300 million pounds as a result of the switch and it may cost as much as one billion pounds to restore the guarantees, the paper reported.
High Court legal action is likely to be taken by one of the companies in the next few days, the paper said. The allegations are detailed in a dossier filed to the FSA, May 23, which is also being sent to the Pensions Regulator, the Pensions Ombudsman and trade body the Actuarial Profession, the paper also said.
BLOOMBERG
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