GMP equalisation through conversion

This note sets out the DWP's approach to GMP conversion and highlights some of the issues trustees and employers should consider before undertaking a conversion exercise.

  • Most defined benefit (DB) pension schemes in the UK are affected by the High Court decision in October last year that schemes must equalise for the unequal effect of guaranteed minimum pensions (GMPs) on men and women.
  • The equalisation required is complex, and may be achieved by a number of different methods.
  • One approach to equalisation is to equalise actuarial values of future benefits and to use existing legislation to convert GMPs into other scheme benefits.  The converted benefits will be subject to the scheme rules and to legislation concerning "mainstream" (non-GMP) benefits.
  • The DWP has recently issued guidance on how it envisages the conversion process working.  The guidance follows extensive deliberation with industry participants, including Hogan Lovells.

 

Click on the Download button to read the full briefing. 

 

 

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Authored by the pension team

Contacts
Katie Banks
Partner
London
Duncan Buchanan
Partner
London
Claire Southern
Partner
London
Edward Brown
Partner
London
Faye Jarvis
Partner
London

 

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