United Kingdom

GMP Equalisation

Since 17 May 1990 there has been a conflict between the requirement for occupational pension schemes to treat men and women equally and the fact that contracted-out schemes must provide Guarantees Minimum Pensions (GMPs), which legislation defines in different ways for men and women. It has not been clear whether or how to solve this puzzle.

On 26 October 2018, the High Court ruled that trustees have a duty “to equalise benefits for men and women so as to alter the result which is at present produced in relation to GMPs”. The case concerned Lloyds Banking Group Pensions Trustees Limited and three related schemes, but it will have implications for other schemes contracted out between 1990 and 1997. The DWP and HMRC were also represented in court because of the potential for a wider precedent to be set.

The ruling also considered a variety of potential methods of equalisation and concluded that several were permissible, although the employer can require the trustees to adopt the method which involves the minimum additional liabilities (before allowing for administrative and implementation costs).

Aon provided three expert witnesses to the case.

To hear more on the topic from Aon please refer to the toolkit resources below, or email talktous@aon.com

>GMP equalisation focus: Stepping up

GMP equalisation focus: Stepping up

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Aon Webinar – 100 days later

Aon Webinar – 100 days later

This latest webcast considers what we have learnt in the 100 days since the High Court ruling on the Lloyds Bank GMP Equalisation case, which is having wide ranging impacts for the pensions industry. This session explores the steps taken so far, the challenges uncovered and how to design practical solutions for GMP Equalisation.

Lynda Whitney Chairs, with Tom Yorath, who acted as expert witness and is leading the team who have provided over 500 GMP Equalisation estimates so far, alongside Mike Edwards from Aon’s Risk Settlement team and David Bunkle from Aon’s Member Options team. They explore:

  • What clients are finding whilst undertaking the early steps of GMP Equalisation, the challenges and practical solutions
  • Incorporating GMP Equalisation into other projects including reactions from insurers and IFAs
  • Planning ahead for the decision between dual records and conversion

Watch the webcast

Solving the puzzle – equalizing for GMPs

Aon In-depth – Technical report on GMP Equalisation
Solving the puzzle – equalizing for GMPs

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Aon Webinar with Sackers

Aon Webinar with Sackers

Just when you thought it was all over once you finish GMP reconciliation along comes the next problem for GMPs. The High Court has ruled on the Lloyds Bank GMP Equalisation case which is expected to have wide ranging issues for the pensions industry. Aon’s webinar, co-hosted with Sackers explores:

  • What the issue is and what the judgement means for the industry
  • The potential financial impact of the judgement on accounting and funding
  • A discussion of some of the practical challenges coming out of the judgement and priority next steps – listen to our session post High Court Ruling

Watch the webinar

GMP Equalisation Technical Update

In touch – GMP Equalisation Technical Update

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