To: HSBCPensions@eversheds-sutherland.com

Dear Sir,

I am a member of the DBS section of the HSBC UK staff pension scheme. I write in relation to the upcoming court case about an amendment to the scheme rules and ask that the following thoughts and points be put to court via our representative’s solicitors.

The 31/12/24 audited accounts for the scheme show that there are 178,975 members. There are 85,114 deferred members and 58,986 pensioner members, so 144,100 or 81% who are DB or hybrid members. The bank have told us in the past that about 52,000 members are subject to clawback, which is 29% of total membership and 36% of DB/hybrid members. So, a significant proportion of members suffer clawback but a larger proportion do not suffer the inequality of clawback.

Clawback disproportionately affects the lowest paid and who, due to the employment practices of the 1970s and 1980s, are mainly women.

The bank have told those members suffering clawback, on numerous occasions, that, that is the rules and they cannot be changed; also that it would be unfair to those not suffering clawback if those that were suffering that penalty had it removed. This ignores the fact that the rules have been changed numerous times, sometimes to fit legislative change but more often to simply benefit the bank. The argument about unfairness is also preposterous.

The Society of Pension Professionals produced a paper in November 2025 on Surplus Release, looking at questions surrounding employer requests to release surplus from pension funds.

The paper quotes a Government response to Options for DB schemes consultation, that suggests that members must also benefit when employers are seeking to share any fund surplus. To quote: “It is imperative that Trustees continue to make surplus extraction decisions in the context of other, wider considerations, including the strength of the employer covenant and the potential for members to benefit from surplus extraction …. The potential for members to benefit from any surplus shared with the sponsoring employer must remain a key consideration for Trustees and is vital to the success of the policy. The government will work with The Pension Regulator to develop guidance regarding surplus extraction. This guidance will reference a suite of options open to Trustees to bring benefits to members from surplus sharing.

The paper goes on to investigate the potential for varying benefit for different members. It specifically says “Members do not have to all be treated the same but Trustees will need to consider all categories and ensure that they are treated fairly.”

An implication is that it is difficult to justify releasing surplus to the employer while a known, avoidable detriment continues to be applied to members. Removing clawback is the most direct and equitable way to ensure fairness before any surplus is shared.

To provide some benefit to all members, it may be that the Trustees and Court should be looking to require the employer and Trustees to not only remove clawback from all sections that presently suffer it but to also make a one-off payment from surplus to all members, in addition to any employer and employee contribution. For example, a payment of £1,000 to all members (as at 31/12/24 numbers) would cost £178,975,000. The scheme surplus at that time, on a low risk funding measure basis was £2,800,000,000 but reported even higher on a current on-going basis and was shown at £3,650,000,000 at the last formal valuation at 31/12/22, suggesting that such a payment is eminently affordable.

Yours faithfully,
[YOUR NAME HERE]