A group of former Standard Chartered Bank Kenya (SCBK) employees have asked the UK’s financial services regulator to compel the lender’s British parent to act on their claims for past undervalued pensions, citing frustration in their engagement with the Kenyan subsidiary.
The group numbering 325 is seeking pension on the same terms as the 629 former workers who recently won a Supreme Court case affirming a Retirement Benefits Appeals Tribunal (RBAT) award against the lender for their dues estimated at about Sh7 billion.
In their letter to the UK’s Financial Conduct Authority (FCA), the former workers, who describe themselves as the “Non 629 Former Employees”, said they had written to the Kenyan bank from June seeking engagement on their claim but received no response.
They subsequently wrote to Standard Chartered Group chief executive officer Bill Winters on August 13 for intervention, only to receive a letter dated August 19 from the Kenyan unit’s legal office denying liability on the claims.
The FCA regulates financial services firms and markets in Britain, with a mandate to protect consumers, the integrity of the markets and promote effective competition in the interests of consumers.
“We respectfully request FCA to engage with Standard Chartered Group to ensure this matter is resolved in good faith, fairly, and without further hostility towards affected former employees,” the former workers say in their letter to FCA chief executive officer Nikhil Rathi, dated September 29.
They further told the FCA that they were concerned over the bank “continuing to defer recognition of liabilities in the face of repeated judicial losses” in light of the recent profit warning after the Supreme Court ruling.
However, in its 2024 annual report, Standard Chartered Bank Kenya recognised the potential claim (the case was still going through the courts) as a contingent liability. Such liabilities are not provided for in the balance sheet since they cannot be reliably quantified, or when the probability of realisation is uncertain.
The new claim by the 325 is based on the ruling in favour of the group of 629 who sued the bank in 2009, arguing that their lump sum dues were understated following a change in the bank’s pension scheme from a defined benefit to a defined contribution scheme in 1999.
In a defined benefits scheme, the benefits are based on a formula and accrue independently of the contributions payable and investment returns.
A contributory scheme requires contributions to be made by active members.
On September 5, the Supreme Court upheld earlier judgments at the Court of Appeal and High Court which upheld RBAT award to the former employees.
StanChart subsequently said it would begin processing the payments for the verified claimants on September 22, but this has been held up by a dispute between the pensioners and their lawyers over legal fees.
In their claim, the workers not enjoined in the tribunal matter argued that they were also in service at the time its pension scheme was changed in 1999, adding that utilisation of pension funds affected all members of the schemes equally.
“In the spirit of fairness and equity, we respectfully request that we and the Non 629 Former Employees be included in the compensation process under the same terms as those granted to the 629 claimants by the Tribunal,” said the group in the June 5 letter that was addressed to the bank and its pension scheme.
In its response dated August 19, StanChart Kenya told them that their request lacked merit under law, noting that the matter was before the Supreme Court at the time.
“Accordingly, we vehemently deny any and all liability as asserted in your letter. Please note that any action brought against the bank or the scheme shall be strenuously defended at your peril in respect to resultant costs,” said the bank.
The bank added that the judgement issued by the RBAT was only in respect to the parties in the proceedings before it, irrespective of the outcome of the appeal before the Supreme Court.
