GMP Equalisation – Some Transfers Are More Equal Than Others

The pensions industry has received further clarification on the issue of guaranteed minimum pensions (GMP) equalisation, and whether trustees will need to revisit past transfers out of a formerly contracted-out pension scheme that provides GMP benefits. On 20 November 2020, the High Court handed down a judgment regarding this issue, in the latest instalment in legal proceedings relating to a number of pension schemes connected with the Lloyds Banking Group.

Trustees and sponsoring employers of pension schemes who are grappling with GMP equalisation will now need to understand the extent to which the court’s scheme-specific decisions apply to their own pension arrangements. To assist with this exercise, here is our summary of the key features of the judgment.