The Pension Administration Standards Association has, on behalf of the industry working group for Guaranteed Minimum Pension (GMP) equalisation, published guidance on the data aspects of an equalisation project to help trustees prepare their pension scheme’s data.. Key point: The update contains links to the various sets of guidance issued in 2020 … Whether GMP equalisation is achieved by way of GMP conversion or one of the other methods, there will be significant cost and complexity associated with the exercise. Earlier this month a third hearing took place in the ongoing case of Lloyds Banking Group Pensions Trustees Ltd v Lloyds Bank PLC & Others (HC-2017-001399) (“Lloyds case“).Click here to read our most recent blog on GMP equalisation and the Lloyds case. In order to carry out GMP equalisation, you’re likely to need more detailed data than is typically used for your day-to-day administration. A Guaranteed Minimum Pension (GMP) is the minimum level of pension that an occupational pension scheme has to provide for those employees who were contracted out of the State Earnings Related Pension Scheme on a salary-related basis, between 6 April 1978 and 5 April 1997. pensions (GMP) equalisation, and whether affected trustees will need to revisit past transfers out of a formerly contracted-out pension scheme. Lloyds Banking Group said in a statement that it welcomed the decision on Friday, which provided clarity on GMP equalisation. The PASA GMP equalisation working group has published new guidance on data required for GMP equalisation – the guidance is aimed at helping schemes identify the data required, and to find solutions to some issues that may arise. Our 2018 client update provided details. You can change your cookie settings at any time. Will the number of transfer top-up claims be any more predicable than the weather – can we expect a blizzard or a light flurry? GMP equalisation: hearing on past transfer liability for trustees. All content is available under the Open Government Licence v3.0, except where otherwise stated, Guaranteed Minimum Pension (GMP) equalisation newsletter - February 2020, Guaranteed Minimum Pension (GMP) equalisation newsletter – July 2020, Pension Schemes Newsletter 126 – December 2020, Pension schemes newsletter 119 – April 2020, Coronavirus (COVID-19): guidance and support, Transparency and freedom of information releases, lifetime allowance and benefit crystallisation event calculations. This is the outcome of the Lloyds Bank case. Opens in a new window; Opens in a new window; Opens in a new window; Opens in a new window; Opens in a new window ; Opens in a new window; Opens in a new window; Opens in a … Unfortunately, there is still no guidance from HMRC on GMP conversion and that may be a long way off at best. Update on GMP Equalisation. Master Trust Transitions Working Group (MTTWG), DB Transfer Code of Good Practice – Consultation. Lucy Collett . However, the Lloyds case in the High Court in 2018 has thrown the situation into sharp relief. Areas where further guidance is needed include how to deal with members who have transferred out or died, and how to deal with DC schemes that have a GMP underpin. Volume 2020 | Issue 35. ACTION: Review the guidance. It will take only 2 minutes to fill in. Shortly after the recent High Court decision on the issue of guaranteed minimum pension (GMP) equalisation and historic transfers (the latest ruling in legal proceedings relating to a number of pension plans connected with the Lloyds Banking Group) we published a summary of the judgment and our initial reaction. Company number: 6597097. There is a further update on GMP conversion at the end of this newsletter. On 26 October 2018, the High Court handed down an important judgment on equalisation of guaranteed minimum pensions (GMPs) in Lloyds Banking Group Pensions Trustees Limited v Lloyds Bank plc and others EWHC 2839 (Ch) (28 October 2018) (Lloyds). This guidance applies irrespective of whether equalisation is to be achieved via the conversion approach, or by retaining … By Jane Briggs on February 2, 2021 Posted in UK Pensions. The hearing relates to a former member of the scheme who transferred their benefits elsewhere - prior to equalisation - and looks at just how these members should be treated for GMP equalisation purposes. The full judgment runs to over 400 paragraphs and we are in the process of … We also use cookies set by other sites to help us deliver content from their services. Update 26th January 2021. GMP equalisation can be built into a GMP conversion exercise. Equalising for the effect of GMPs and transfer top-ups post Lloyds. Employers concerned over complexity and cost of GMP equalisation. Other areas covered include managing advisers (communication is … Where transfers had been made without allowing for GMP equalisation, what liability if any did the transferring trustees retain? The High Court in England ruled on 26 October 2018 that all Guaranteed Minimum Pension (GMP) benefits in UK pension plans must be equalised for males and females. Thursday 29 November 2018 Tim Smith +44 207 466 2542 (tim.smith@hsf.com) The Pensions Administration Standards Association, Driving standards in pensions administration in the UK. The industry GMP Equalisation Working Group (chaired by Geraldine Brassett of PASA and formed by the Pensions Regulator) has issued guidance on the data required for GMP equalisation. Chief among them was the position as regards past transfers-out. But GMP equalisation must be achieved, and if your team doesn’t pull together as one, the project will take considerably longer. What’s GMP? The primary objective of the group is to produce good practice industry guidance to support schemes in preparing for and then implementing GMP equalisation and potentially, for some schemes, conversion. In the much-anticipated judgment in the latest round of the Lloyds Banking Group equalisation case, the High Court ruled on 20 November that past individual transfers out made under the cash equivalent legislation will need to be revisited, a decision that will add further cost and complexity to the task of scheme trustees to equalise for the effect of Guaranteed Minimum Pensions (GMPs). GMP equalisation What now? Thursday 29 November 2018 Tim Smith +44 207 466 2542 (tim.smith@hsf.com) // 2 What we are going to cover •Background •Judgment •Implications & tricky issues •Q&A. In the update, PASA details when various guidance materials about GMP Equalisation are expected to be published. Watch now on-demand. January 2021 – GMPE Working Group update. Thursday 29 November 2018 Rachel Pinto, Partner, +44 207 466 2638 (rachel.pinto@hsf.com) Antonia Pegden, Senior Associate, +44 207 466 2530 (antonia.pegden@hsf.com) // 2 What we are going to cover •Background •Judgment •Implications & tricky issues •Q&A. Lloyds Bank GMP equalisation case. GMP equalisation (updated) PASA has issued guidance on the tax implications of GMP equalisation: read the guidance. In these, cases, the increased pension will need to be used to update the LTA calculation for any retirement Benefit Commencement Event (“BCE2”) from that date. That question is addressed in the follow-on judgment. The guidance highlights tax issues which schemes may face when adjusting benefits to correct for the inequalities of GMPs and it identifies possible approaches for dealing with those issues. If pension schemes have started to pay pensions and made lump sum payments, further payments may be … On 26 October 2018, the High Court handed down an important judgment on equalisation of guaranteed … Download this FYI as a printable PDF. DWP guidance on using the GMP conversion legislation to help address inequality, as well as HMRC and industry guidance (such as PASA’s methodology guidance ), have now gone some way to filling in the gaps. Post navigation. Sign up to receive our updates on the latest legal trends and developments that matter most to you. An explanation of the possible attractions of conversion compared to the other methods for equalising GMP s can be found here . Guidance from the GMP Equalisation Working Group in September 2019 tries to fill some of the gaps. The practical implications of the ruling will be very pension scheme specific. The hearing relates to a former member of the scheme who transferred their benefits elsewhere - prior to equalisation - and looks at just how these members should be treated for GMP equalisation purposes. The uncertainty could be removed later this year by the Lloyds court judgement. Update on GMP Equalisation 03 November 2020 Last year, we told you about a High Court judgment made at the end of 2018 in relation to Guaranteed Minimum Pensions (GMPs). On 26 January 2021, the GMP Equalisation Working Group (GMPEWG) established by the Pensions Administration Standards Association (PASA) published an update outlining its plans for 2021. This is another high profile judgment in relation to GMP equalisation, and has been reported in the national press. There has been recent coverage in newspapers of the problem of GMP equalisation, resulting from a court case involving the Lloyds Bank pension schemes and the need for schemes to equalise benefits to remove gender inequalities in the GMP calculation. Although we’re still waiting for some additional guidance, schemes need to get started on their equalisation projects. Other guidance published by the GMP Equalisation Working Group This Guidance Note is focused solely on tax considerations which may arise in GMP equalisation projects. However, a specific High Court hearing on transfers out was on the cards from the outset. To date GMP equalisation has primarily been carried out for schemes buying out or transferring to the PPF, with ongoing schemes deferring the exercise. The spectre of GMP equalisation has been hanging over every contracted out occupational scheme for more than 30 years.