The chairs of two government select committees have written to Lloyds Banking Group seeking an explanation for the pension contribution rates of its executives.

Lloyds chief executive, António Horta-Osório, currently has an employer pension contribution rate of 33 per cent, when the maximum contribution level is 13 per cent for other employees.

The bank’s chief operating and financial officer’s contribution rates of 25 per cent are also significantly higher than for those in their workforce.

In the letter, Work and Pensions Committee chair, Frank Field, and Business, Energy and Industrial Strategy Committee chair, Rachel Reeves, asked the bank why the employer contribution rate was so much higher for executives.

Furthermore, the MPs noted that Investment Association (IA) guidelines state that pension contribution rates for executives should be aligned with their workforce.

They are seeking answers as to whether or not Lloyds will be asking its committee to support the IA’s guidelines in full, and if so what timeframe they were working towards.

Field and Reeves also questioned the bank as to why it chose to increase Horta-Osório’s fixed share award to £1.05m, and whether that was “in the spirit” of the IA guidelines.

On the same day (24 April 2019), the MPs wrote to IA CEO, Chris Cummings, welcoming its new guidelines on executive pensions and asking what response they had received so far.

They asked whether the organisation has “identified any barriers to achieving widespread compliance” with its guidelines, and how it may overcome any barriers.

The MPs also sought Cummings advice on whether there “would be merit” in the guideline restrictions becoming law.

In March, the Business, Energy and Industrial Strategy Committee published a report saying that companies must do more to link top bosses’ pay to that of the rest of their workforce.

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