PASA has provided some updated guidance on GMP (Guaranteed Minimum Pension) conversion.
An article from Pasa’s Data Working Group titled, ‘What have we learnt about data requirements for GMP conversion?’, has provided insights into the data requirements for GMP conversion.
GMP conversion has expanded to include all GMP benefit recipients, necessitating early confirmation of membership criteria for effective data preparation. According to the Group, it is essential to establish the specifics of this membership scope early on in the procedure to lay a firm foundation for efficient data production.
The addition of a Contingent Spouse’s Pension (CSP) increases conversion complexity, calling for careful planning and unique design.
Benefit tranches, a key component of GMP conversion, entail identifying and outlining data requirements from the project’s inception.
The Group has highlighted clear and concise communication tactics, including FAQs, as essential to ensuring that members are informed and involved throughout the conversion process.
Furthermore, deferred record conversion schedules must be carefully considered, and choosing a separate bulk exercise offers greater flexibility.
The Group says the correct sequencing of data and benefit rectification activities is essential to the success of GMP equalisation and conversion.
Additionally, the safeguarding of historical data is still essential even though GMP conversion might lessen the need for post-conversion data. It enables schemes to respond to questions in the future and safely manage UK pension legislation.
WTW head of GMP implementation Simon Pariser says: “WTW welcomes this update to PASA’s guidance. Data is a critical step in any equalisation project. The guidance recognises that conversion broadens the data requirements compared to a dual records approach; GMP conversion impacts a different population, requires extra data and has different communication requirements.
“Time spent up-front understanding and preparing for these different elements, and appreciating how they can benefit a scheme and its members holistically will ensure Trustees’ goals are accomplished in an efficient way.”
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