Personal Finance: Greed hits societies

THE PACE of building society takeovers is hotting up. While the shock-waves from the announcement that Lloyds Bank plans to take over Cheltenham & Gloucester Building Society are still causing waves, Northern Rock Building Society declared last week that it wanted to gobble up its small neighbour the North of England Building Society to create a chunky 'top 10' society.

This takeover is a return to the traditional 'merger', which results in a larger building society with all the standard building society baggage of membership and co-operative ownership in place.

It also means that the financial tanks are not drained to pay out the members - the theory being that they remain building society members with the same rights, only as part of a larger society. So there is usually a small payment to compensate the society with the largest reserve ratio (North of England) for having those funds diluted in a larger society.

The greed factor has hardly been tickled at all by gentle mergers in the past. But now the proposed C&G/Lloyds deal is offering pounds 500 plus 10 per cent to a large number of savers (but emphatically, not all) there is a new benchmark.

The question will always be asked whether a commercial organisation would be willing to offer a better deal. Perhaps the Bank of Scotland, which has declared itself a possible suitor for a building society, might like to go a- wooing across the border? The enlarged Northern Rock might be more its type.

Of course not all C&G members are pleased by the prospect of the Lloyds take- over. Some object to the surrender of mutuality, while others think the society is going on the cheap.

A fledgling protest group is being formed to press the society to examine details of the proposed takeover and possible alternatives. One C&G account holder from Dorset has fired others into action. The Independent on Sunday is willing to pass on any letters to the group, which is reluctant to adopt a public profile as yet.

ANOTHER building society, Nationwide, confirmed last week that it is launching its own life insurance company and abandoning its tie with GRE - although the insurer will be retained to handle the administration.

Meanwhile beauty parades are taking place to find the best fund managers for the job. Frankly they would be hard pressed to put on a worse show than GRE.

Perhaps Nationwide will be wary of putting all its trust in one financial house. The theory adopted by Marks & Spencer when it launched unit trusts - to spread the management among a bevy of managers and whip the money away from any that failed to stay on their toes - sounds like a good idea in principle. But the practical outcome has been disappointing.

THREE men in their sixties won a case for unfair dismissal last week on the grounds that they were selected purely because of age.

It is one thing to offer tempting 'early retirement' packages to those anxious to abandon work for the golf course, but blunt redundancy is another matter.

A complicated judgment from the Advocate General in the European Court appears to give employers the go-ahead to raise women's pension ages from 60 to 65 to comply with equality legislation.

A group of women who worked for Avdel, a manufacturer of industrial fasteners in Hertfordshire, protested that summary change in their notional retirement age would mean a pension cut of 20 per cent if they retired at 60.

The argument was about the financial consequences of a notional change rather than the expectation that they would actually work on.

It seems not so much about equality, but about high-handed management that can worsen terms of work at the stroke of a pen.