Geraldine Brassett, Chair of the PASA GMP Working Party, said: “The time left for administrators to act before the cessation is beginning to run short and there is increasing pressure on them to analyse what needs to be done, and to plan and deliver this work. As the leading independent body in administration, we felt it was vital for us to lead the way in terms of helping these organisations to meet their deadlines and provide them with genuinely useful support and guidance. Our key messages are:
• It is never too late to get started but it is vital that those who have not yet got to grips with what is required take action soon because of the strong likelihood of intense pressure on resources. The Guidance sets out nine other reasons why Schemes should reconcile their membership and GMP Data with HMRC.
• Simply accepting HMRC data as correct is not necessarily an easy option as a rectification exercise is still likely to be required.
• When working with tolerances these must be carefully considered and Scheme Specific.
Also commenting, Helen Powell of Allen & Overy, said: “It’s vital, given the scale and complexity of the task of reconciling and rectifying contracted-out benefits, that schemes are supported in taking a pragmatic, cost-effective approach, which is also consistent with their trustee duties. There are boundaries to pragmatism – for example, a failure to engage appropriately now could store up future problems in relation to GMP equalisation or de-risking activity. Schemes should aim to do their data reconciliation exercise once and do it right, and this guidance will help trustees as they seek to develop an appropriate scheme-specific strategy.”
Helen Forrest Hall, DB lead at PLSA, added: “For so long GMPs seemed so tame – relatively. We thought they could be left to revalue happily and undisturbed. Then the Government radically reformed the State Pension and now we all have to reconcile. We know from talking to our own members that reconciliation (and any subsequent rectification) is not a straightforward process and we are very keen to support them through this. We welcome the guidance published by PASA today and believe it is a valuable tool in helping trustees approach this complex and, at times, subjective process.”
The full Phase 1 of the Guidance is available on the PASA website and Phase 2 will be published during February.
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