Pensions - Articles - GMP guidance does not address trustee and corporate concerns

 Most notably it does not cover GMP conversion nor allude to when it will address this issue. According to Mercer, this leaves scheme trustees and sponsors in a difficult position because HMRC has not fully defined some of the options theoretically available for equalising GMP. 

 In its Budget submission to HMRC, Mercer called on HMRC and the Pensions Minister to take urgent steps to clarify – and if required, amend – the law so that trustees are provided with the necessary information to allow them to pay pension scheme members their correct benefits.

 Adrian Hartshorn, Senior Partner at Mercer and Chair of Mercer’s GMP Equalisation Steering Committee, said, “We have a once in a lifetime opportunity to make a real difference to the way pension schemes operate in the UK. Over the last 40 years, layer upon layer of complexity has been added to the way in which pension benefits are calculated and administered.

 “As we implement GMP equalisation, we have an opportunity to simultaneously simplify benefits. This will help members understand their benefits, speed up processing times and reduce administration costs. This could reduce the additional costs of administering more complex benefits by £200m over the lifetime of pension scheme, ultimately putting members in a better position. Fifteen months after the Court judgment and almost 30 years after the original sex discrimination case there is still a lack of guidance from HMRC, which in turn prevents schemes from fully making fully informed decisions.”