ASX Announcement - NAB UK staff support changes to UK pension schemes - 21 March 2006

National Australia Bank's UK staff have supported a series of reforms to their final salary and defined contribution pension schemes.

The proposed reforms were put to a ballot of the members of the three defined benefit schemes (approximately 7000 in the Clydesdale Bank and Yorkshire Bank schemes, 800 in the National Australia Bank scheme) and the 1200 members of the defined contributions scheme.  The ballot took place between 22 February - 15 March.

Changes to the defined benefits schemes were approved by:

Clydesdale Bank                  82% in favour out of 1989 votes received
Yorkshire Bank                     63% in favour out of 2056 votes received
National Australia Bank      75% in favour out of 391 votes received

In the defined contribution scheme, 92% were in favour out of 598 votes received.

Ballots were received from 56% of the members eligible to vote.

The National's UK CEO Lynne Peacock thanked all scheme members who voted in the ballots.

"I am pleased that the majority of scheme members took the opportunity to express their views in the ballot and that a clear majority of those supported the proposed reforms.  The company believes that these reforms are fair and equitable and provide a balance between the needs of scheme members and the viability of the schemes.

 "We can now move forward in accordance with the wishes of the scheme members and we look forward to working with the scheme Trustees to implement the reforms and put our pensions on a sustainable and secure footing for the future," she said.

Key aspects of the proposed reforms to the defined benefit schemes are:

- all defined benefits accrued to 31 March 2006 are unaffected and the defined benefit schemes remain non-contributory.

- from 1 April 2006, the defined benefit schemes move to a structure known as "career average", under which members earn "blocks" of pension every year.  Rather than receiving a pension based solely on a final salary at retirement, the proposed structure builds pension benefits year-on-year based on a member's annual salary.
 
- the National will make a one-off contribution of £100 million across its three defined benefit schemes this financial year.  This contribution will reduce the deficit with no resulting material profit and loss impact.  Further discussions will now be entered into with the Trustee boards on an appropriate basis to address the remaining deficit.

- the proforma IFRS impact of these reforms on a full year, ongoing basis, would result in a pension expense reduction of between £15 million and £20 million.

For further information in Australia contact:

Brandon Phillips
Group Manager, External Relations
T  +61 (0) 3 8641 3857 
M  +61 (0) 419 369 058

Hany Messieh   
Head of Investor Relations
T  +61 (0) 3 8641 2312 
M  +61 (0) 414 446 876

Kim Lovely
External Relations Manager
T  +61 (0) 3 8641 4982
M  +61 (0) 406 035 243

For further information in the UK contact:

Tim Pie
UK Media Relations
T  +44 (0) 207 710 2146
M  +44 (0) 7900 151 654