GMP equalisation frequently asked questions (FAQs)

Do you have a question about GMP or GMP equalisation? Check below for the answer.

What is GMP equalisation and how did it come about?

Who is affected and how?

Tax matters

Help and support

What is GMP equalisation and how did it come about?

1. What is Guaranteed Minimum Pension (GMP)?

Your GMP is part of your pension from the Scheme. It replaces part of the State Pension.

Before April 2016, the State Pension was made up of two parts: the flat-rate Basic State Pension, and a second level of State Pension linked to earnings. This was called the State Second Pension (or ‘S2P’), and before that, the State Earnings Related Pension Scheme (or ‘SERPS’).

From 6 April 1978, pension schemes could ‘contract out’ of SERPS. This meant that both employers and employees would pay lower National Insurance contributions, and the pension scheme had to provide a certain level of benefit in place of the SERPS pension the employee would be giving up.

For pension schemes like ours, this minimum level is the GMP. The amount of GMP and the way it must be increased in payment is set by legislation.

People stopped building up GMPs from 6 April 1997.

2. What is GMP equalisation?

For workplace pension schemes that were contracted out of SERPS (and later the State Second Pension), GMPs remain unequal in some cases.

GMP equalisation is the action all such pension schemes must take to adjust pensions for the effect of unequal GMPs. This is only required in respect of GMPs built up from 17 May 1990.

3. How did GMP equalisation come about?

In the past, State Pensions were paid to men and women at different ages (65 for men and 60 for women), but were gradually equalised so that by November 2018, men and women had a State Pension age of 65.

However, GMPs are still payable from age 65 for men and age 60 for women. Also, men and women could build up GMPs at different rates.

In 1990, the European Court of Justice ruled that all UK pension schemes had to treat pensions equally for men and women for benefits built up after 17 May 1990, including the same pension age.

But the rules governing GMPs were set in legislation and as State Pension ages were still different, GMPs did not adjust in line with this ruling. As a result, GMPs remained unequal in some cases.

Following a High Court ruling in October 2018, UK workplace pension schemes must now put this right by adjusting pensions for any unequal GMPs included in the pension.

4. What was the High Court ruling?

Unequal GMPs became a legal issue when three members of the Lloyds Banking Group’s pension schemes claimed sex discrimination on the basis that their GMP meant that their pensions increased at a different rate than members of the opposite sex. The High Court ruled in the members’ favour in October 2018.

The result of this ruling is that all affected pension schemes are legally required to address any inequality for pensions earned after 17 May 1990. The judgment provided a number of options for doing this.

All affected UK pension schemes need to act on the High Court’s decision.

Who is affected and how?

5. Which members could be affected?

The High Court decision is likely to affect some members, some beneficiaries relating to former members, and some former members who have a GMP built up between 17 May 1990 (when the equal pension rules started to apply) and 6 April 1997 (when GMPs stopped building up).

It could affect men and women, pensioners and non-pensioners and former members who previously transferred their benefits out of the Scheme.

6. I previously transferred out of the Scheme. How am I affected?

A Court hearing on transferred benefits took place in early May 2020 with a follow-on hearing in October 2020.

The Court handed down its decision on 20 November 2020, providing clarity on how members who have transferred out of the Schemes should be treated with regard to GMP equalisation.

If you transferred out after April 2024April 2023, your benefits took GMP equalisation into account.

For members that transferred prior to these dates, where possible, the Trustee has now reviewed the transfers out of the Scheme where ex-members had service during 17 May 1990 and 6 April 1997 and worked out which members would have been entitled to a higher transfer out as a result of GMP equalisation.

A new administrator - Aon – has been appointed to undertake a tracing and payment exercise, which will start in early 2025.

If you do not hear from Aon by the end of June 2025, and you believe that you built up a GMP between 17 May 1990 and 6 April 1997 in the Scheme and have since transferred your benefit to a new pension arrangement, you should contact the (the Scheme administrator/Aon at the details below).

7. Will you write to every current member?

No, if you did not build up any GMP between 17 May 1990 and 6 April 1997, you will not be affected. In this case, your benefits do not need adjusting as a result of the High Court decision.

8. When will you write to affected members?

We are in the process of writing in stages to former members who transferred out:

  • For former SALPS and RIGPS members who transferred out and are affected, we expect to have written to everyone by 30 June 2025.

Please note that these timescales are subject to change - be assured that if you are affected, we will write to you individually with full details.

We wrote to affected pensioner members in stages:

  • For SALPS pensioner members, this was between September 2022 and Summer 2023.
  • For RIGPS pensioner members, this was between November 2023 and Autumn 2024.
9. If I am affected, how much money could I get?

Some pensioner members may have received an increase to their pension, but any increase tended to be relatively small.

Some pensioner members may have received a one-off additional payment to cover any missing pension they should have received. Where this was the case, the additional payment included interest.

Some pensioner members may have received both an increase to their pension and a one-off additional payment.

Some former members may be due a one-off top-up payment to cover any missing payment that should have been included when they transferred out. If affected, details of the top-up payment amount and options available will be communicated to former members in due course.

10. I receive an increase every April on my GMP, will this be affected?

No, any increase payable on your GMP will be paid as normal with your April pension payment.

11. As a pensioner member, how did you review my Scheme pension?

We worked out the amount of pension you built up between 17 May 1990 and 5 April 1997. For some members, we also looked at the benefits built up after 5 April 1997

We then worked it out again over the same period, but as if you were a member of the opposite sex (the ‘alternative’ pension). Everything else about the calculation was the same: for example, your age, salary, and the date you retired.

Also, see our explanation herehere.

The calculation told us:

  • whether your current pension was lower than the ‘alternative’ pension would be – and if so, we increased your current pension; and
  • whether you received a lower pension than the ‘alternative’ pension in past years – and if so, we paid a one-off additional payment (which included interest) to make up the difference

When working out your pension increase in future, we will check that we are treating benefits equally for men and women and allow for this in your pension.

12. Did the Scheme already equalise GMP in the past?

The Scheme did previously equalise GMPs for male members who left pensionable service before 1 January 2006.

If you fall into this category and if it was deemed necessary, your pension at retirement was uplifted to allow for GMP equalisation. However, following the High Court ruling in 2018, which provided confirmation of acceptable methods for schemes to equalise benefits for unequal GMPs, an exercise has been carried out to determine whether you are due an additional uplift.

The Trustee and Company have agreed that any uplift previously provided should not be reduced and so your pension cannot reduce as a result of this exercise.

13. Will GMP equalisation impact my State Pension Deduction (SPD)?

Equalising your GMP has no impact on the amount of SPD already deducted nor does it change the basis for the calculation of any SPD due to be applied in the future.
14.12. How will you review past transfers out?

We will work out the pension you built up between 17 May 1990 and 5 April 1997. We will then work it out again over the same period, but as if you were a member of the opposite sex (the ‘alternative’ pension).

If the alternative pension is lower, you may receive a one-off top-up payment (including interest) to make up for your past transfer being lower than it should have been.

Also, see our explanation herehere.

15.13. If I am due a top-up payment in relation to a past transfer out, will I need to do to anything?

Yes, as a former member who has transferred out, we will need you to confirm your details in the first instance, so that we can verify your identity and validate any top-up payment due.

If you are affected, we will send you an initial letter with instructions on how to do this. The quickest way will be via an online portal – our letter will confirm the details. Alternatively, you will be able to confirm your details over the phone or by post.

Once you have confirmed your details, we will write to you again with details of any top-up payment due, your options, and the forms you will need fill in and return for us to organise payment.

16.14. If I am due a top-up payment in relation to a past transfer out, what will the process be for payment?

The option pack you will have received will tell you what options are available to you for payment.

Your options will be determined by the following factors:

  • The size of your top-up payment;
  • When you transferred out; and
  • Whether you still have deferred benefits or are being paid a pension in the scheme you transferred out of.

Some former members will have the choice of receiving the top-up payment as a cash sum into their bank account, or as a transfer to an alternative pension arrangement.

Some former members will have only the pension transfer option, so will need to choose an alternative pension arrangement that can receive such a transfer.

17.15. What if I have had more than one transfer out of the Scheme?

You may have had more than one period of membership in the same Scheme, which you then transferred out. If you have more than one transfer out of the same Scheme, we will consider them all, and your top-up payment will cover those transfers affected by this GMP issue.

Please note that you may have had one or more transfer that did not relate to the affected 1990- 1997 period or did not entitle you to a top-up payment.

18.16. My original transfer went to my new employer’s scheme at the time – am I allowed to transfer the top-up payment there?

Possibly. We strongly recommend you contact the administrator of the arrangement you want to receive your top-up payment to check that they are willing and able to accept it. If they are, you will need to ask them to complete and return a ‘Receiving arrangement acceptance form’ (this form is in your option pack), so that we know they will accept the payment.

19.17. If I am due a top-up payment in relation to a past transfer out, how will you calculate the interest?

We will use the interest rate as prescribed in the High Court ruling, which is the Bank of England base rate plus 1%.

20.18. What if I want to transfer out of the Scheme now?

Since April 2024April 2023, all transfer values have been calculated to take account of GMP equalisation. If we gave you a quotation for your transfer value before this time, you may be due an additional payment in the future because of GMP equalisation.

If you are affected by this, we will contact you as part of our tracing and payment exercise due to commence in early 2025

Tax matters

21.19. As a pensioner member, are there any potential tax implications if I received an increase and/or additional payment?

Any changes may have affected your tax position because:

  • If your pension increased, this could push your yearly income into a higher tax bracket.
  • If you received a one-off additional payment, this could push your income for the year into a higher tax bracket. This would mean you might have to pay more tax for the year in question than if you had received the right level of pension in the first place.

    If this happened, you can apply to HM Revenue & Customs (HMRC) to spread the tax that is due over the previous years to which the additional payment relates. See question 2321.
  • If you are close to the Lifetime Allowance and you received a one-off additional payment, the percentage of Lifetime Allowance you used up when your pension started may have changed. And if the increase was more than a permitted maximum, this may have affected your Lifetime Allowance. (See the below section ’If you are close to the Lifetime Allowance or have certain Lifetime Allowance protection’.)

    Separately, although very rare, if you have Enhanced Protection, you could lose it in the future due to the rules around GMP.

    If you are close to the Lifetime Allowance or if you have Enhanced Protection, you should take independent financial advice. See question 2725.

Remember: it is your responsibility to check your position against the Lifetime Allowance.

22.20. As a former member who transferred out, will there be any potential tax implications if I receive a top-up payment?

If you receive a top-up payment as a cash sum into your bank account

Top-up payments made as a cash sum will be subject to tax.

As you are no longer a member of this Scheme, we will not have up-to-date details of your tax record but will be required to make a deduction for tax from your payment. Under current tax rules, 25% of your payment will be tax-free.

For the remaining 75%, we will make a deduction for tax at the basic rate of income tax (20%).

After payment, we will send you a P45 which will show the amount of tax taken.

If you are not a basic rate taxpayer, you should contact HM Revenue & Customs to reclaim any tax overpaid or pay any additional tax due.

If you receive a top-up payment as a pension transfer

In most cases, we would expect to make payment free of tax. This is because it would count as a payment from one UK 'authorised' pension scheme to another. Ultimately, you would pay tax on this money when you receive it as part of your pension.

If you have taken steps to protect your Lifetime Allowance, this payment could affect your tax position and result in you losing your protection.

Please note that if you live overseas, different tax rules may apply and you may need to take specialist financial advice.

23.21. As a pensioner member, if I receive an additional payment, how can I claim back any tax I overpay?

Please contact the administrators (see question 2523) and ask for a ‘GMP statement’. This will include two copies of a table showing your past underpayments in each tax year.

Write to HMRC using the letter template below and enclose one copy of the underpayments table from the GMP statement.

HMRC will respond to your letter.

Please note: as it is your responsibility to keep an eye on your tax position, you must write to HMRC yourself – we cannot make the claim on your behalf.

Help and support

24.22. What support is available?

Please refer to these ‘GMP equalisation’ pages of the website for background information and what is happening.

We will update these pages, including these FAQs, as we make progress, so remember to come back if you have a query.

We will also provide general updates in future Trustee Newsletters.

Remember, we have completed this exercise for all affected pensioner members. If you are a former member who transferred out and you are affected, we will write to you individually with full details. Plus, if you have a general question not covered here, you can contact the administrators (see question 2523).

25.23. Who can I contact with a question?

If you are a Scheme member currently receiving a pension, or not yet retired, please contact the administrators using any of the details below.

If you are a former Scheme member who transferred out in the past, please contact Aon using any of the details below.

Please note: the administrators cannot give you financial advice or answer any specific questions as to how you may be affected.

26.24. Who is Aon?

Aon has been appointed as administrator to undertake a tracing and payment exercise, specifically in relation to former members who have transferred out. Aon is regulated by the Financial Conduct Authority. You can read about their services at www.aon.com.

27.25. Where can I get financial advice?

Neither the Trustee of the Scheme, the Willis Towers Watson administration team, the Aon team, nor anyone at RSA can legally provide you with financial advice.

If you need advice, you should talk to an independent financial adviser (IFA). If you do not have an appointed IFA, you can find one using MoneyHelper’s online directory.