The Pensions Administration Standards Association (PASA) has formed a body to take forward the equalisation of guaranteed minimum pensions (GMPs) in light of the High Court’s recent landmark ruling.
PASA is bringing together representatives from the administration, legal, advisory, actuarial, data and trustee sectors to help pension schemes meet the requirements of the High Court’s ruling on the equalisation of GMPs.
The High Court ruled in October last year in the case of Lloyds Banking Group Pension Trustees Limited vs Lloyds Bank plc (and others).The court said pensions provided to members who had contracted-out of their scheme must be recalculated to ensure payments reflect the equalisation of normal retirement ages in the 1990s.
The ruling effectively means thousands of defined benefit (DB) schemes will now have to amend their scheme rules and equalise GMPs between men and women.
But the court did not set a definitive method for equalisation, instead noting that a number of methods are available for schemes.
The group will help develop and promote best practice on issues arising from the ruling, from how to address missing data through to dealing with transfer requests and rectifying underpayments.
The group will be chaired by Geraldine Brassett of PASA.
Brassett says: “We recognise the value that best practice guidance on GMP equalisation will provide and are pleased to lead this cross industry initiative. GMP equalisation projects are likely to be complex so it is important that advisors, administrators, trustees and employers work collaboratively to ensure cost-effective delivery and clarity for scheme members impacted.”
The Pensions Regulator executive director of regulatory policy, analysis and advice David Fairssays: “Delivering GMP equalisation will be challenging and we welcome this initiative to bring clarity to the market.
“It will take some time to work through all the issues. Establishing best practice will help industry do this as efficiently as possible, and minimise disruption to routine scheme business.”