Over the past year, the pension industry has been grappling with the practicalities of GMP equalisation. Industry guidance has recently been issued and further guidance is expected.
This note examines the current state of play and suggests steps which trustees should consider taking now. It covers:
- Where are we now?
- GMP reconciliation and rectification
- GMP equalisation: dealing with past underpayments
- Equalising future payments
- Some common unanswered issues
- Tax issues on GMP equalisation.
To aid readers, Appendix I explains what a GMP is and why GMPs result in unequal benefits. Appendix II contains a reminder of the issues considered in the Lloyds case and the equalisation methods approved by the Court.
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Authored by the pension team