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Pensions are constantly evolving and there may be changes that affect your membership, so it’s important to keep up to date with what’s happening.
Equalising benefits from Guaranteed Minimum Pensions (GMPs)
18 Aug 2019
This may mean some Scheme members could receive an increase to their benefits in the future.
Although the judgment relates to the Lloyds Banking Group, it creates a precedent for other defined benefit schemes which were “contracted-out”, such as the Magnox Pension Scheme.
The inequalities occurred because GMPs, accrued at different rates for men and women, are payable from age 60 for women and age 65 for men, and are increased in different ways to non-GMP benefits.
Who is affected?
You may have GMP as part of your pension benefits if you were an active member of the Scheme before 6 April 1997, as the equalisation required under the Lloyds judgment would apply to GMPs earned between 17 May 1990 and 5 April 1997.
Although some members may require an increase to their benefits as a result of GMP equalisation, many members will not be impacted at all. No members will have their benefits reduced.
What happens next?
The Trustee has started to receive advice from its advisers on how to deal with GMP equalisation, and will communicate how it proposes to deal with this issue as soon as it can. GMP equalisation will typically be complex and may take a number of years to complete.
