Vishal Makkar, Head of Retirement in the UK at Buck, says: “Today’s Call to Action paper is a positive step towards making sure pension schemes fully understand what is required to ensure they comply with their legal obligation when it comes to GMP equalisation. Last year’s High Court ruling was a defining moment for the defined benefit pensions industry and is one that will affect an overwhelming majority of DB pension schemes in the UK. This is why it is important for trustees, sponsors and advisers to work together to ensure their schemes are well on their way to equalising GMP benefits for all their members. The GMP Equalisation working group’s guidance clearly articulates the key areas in which trustees should make progress in the near term – including data and pension transfers – and is therefore a welcome development.
“However, eight months on from the High Court’s landmark ruling, it’s clear there is still a lot more to do to ensure pension schemes fulfil the requirements of GMP equalisation. At Buck, we recognise that GMP equalisation has the potential to be a complex, costly and time-consuming project, which is why we have been at the forefront of developing pioneering solutions to address this issue. We are dedicated to helping trustees plan for GMP equalisation, so it’s great to see this latest guidance supporting those in charge of managing schemes in the same way. We look forward to seeing the working group’s guidance throughout the remainder of the year.”
Alasdair Mayes, Partner at LCP, commented: "This high-level guide provides a useful reminder of some of the actions that can be taken now in a GMP equalisation project. Despite the remaining legal and legislative uncertainty there is plenty for trustees and their advisers to be getting on with regarding data and establishing past administrative practices.
“Most trustees and scheme sponsors will be keen to see the more detailed guidance documents promised, some of which should be available in the early Autumn. In the meantime there is an opportunity for them to make a strategic assessment of whether GMP conversion (Method D2 in the Lloyds jargon) is likely to be an attractive means to achieve equalisation and simplification at the same time.”
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