Equalising for the Effects of Guaranteed Minimum Pensions (GMPs)

Since 2018, it has been clear that pension trustees should take action to equalise for the effect of GMPs (more commonly referred to as "GMP equalisation"). For those pension schemes that have obligations to pay GMPs to their members, GMP equalisation poses a necessary but sometimes fraught project.

• Our 2018 publication sets out the background to GMP equalisation and examines the court judgment that ruled there was an obligation to equalise pension scheme benefits for the effect of GMPS.
• Our 2020 publication examines the later court judgment (often referred to as “Lloyds 3”), which considered whether trustees are required to revisit past transfers out, if those transfer payments were less than they ought to have been as they did not take account of GMP equalisation adjustments.
• Our GMP equalisation edition of Hot Topics focused on 10 practical issues for trustees arising out of the "Lloyds 3" court judgment.
• GMP equalisation has proved to be a blog-worthy topic! See the blogs in our GMP Equalisation Under the Microscope series.
• Some trustee boards will seek to undertake GMP equalisation via a conversion exercise. Keshinda Gage's blog takes a look at what happened when new conversion legislation received Royal Assent just before one of our clients was about to finalise its conversion exercise.

If you find the above resources useful, check out our #AttentionPensions campaign, which provides a wealth of resources on topics ranging from environmental, social and governance for pension trustees to The Pensions Regulator's single code of practice.

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