GMP equalisation

The story so far

We’re currently equalising members’ benefits for the effect of unequal Guaranteed Minimum Pensions (or GMPs for short). You may have heard this called GMP equalisation.

Here’s a quick reminder about GMPS and why we need to equalise them.

If you were in a company pension scheme like the UKRF between 1978 and 1997, you may well have a GMP.

A GMP is a minimum level of pension – usually, only a small amount – that some schemes had to provide for members if they ‘contracted out’.

‘Contracting out’ means you built up less State Pension but in return, you and your employer paid less National Insurance.

While the law changed for schemes to provide equal benefits from 1990, GMPs are still linked to State pensions. So, they start at different ages for men and women.

This means that some people will still receive different benefits because of their sex.

In late 2018, there was a High Court hearing which raised the questions:

  • Do pension schemes need to adjust pensions for unequal GMPs; and
  • If so, how?

The Court confirmed that schemes had to equalise for unequal GMPs earned after 17 May 1990, and gave broad guidance about how to do this.

Then in November 2020 the Court confirmed that transfers also need to equalise. We’re currently working through the implications of this and we’ll keep you informed.

We have around 84,000 members who might be affected, and it will take some time to check if you are receiving the right amount.

We’ll contact you if your pension needs to increase. But please remember, as GMPs are usually small, any increase is likely to be small too.

This will only affect you when you start taking your pension, or if you transfer your benefits out.

In future, we’ll review your pension every time it changes to ensure it is being paid on an equal basis.

For more about our review for pensioners, please watch our ‘What happens next’ video.

And remember, you can find more information in the dedicated section of this website.

Thank you for watching.

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