New guidance on GMP methodology published

The cross-industry GMP Equalisation Working Group has today published new methodology guidance to help schemes undertaking equalisation.

Alasdair Mayes, Partner at Lane Clark & Peacock LLP and one of the authors of the guidance commented: “Equalising benefits for Guaranteed Minimum Pensions will require the benefits of ten million pension scheme members to be reviewed. Our aim is to provide practical and pragmatic guidance on the methods that can be used to equalise pensions and resolve this issue that dates back to 1990.

The next key steps in the process are the publication of guidance by HMRC and refinements to the GMP Conversion legislation by DWP.

Alasdair added: “The political position in parliament changes from day to day, but I really hope that measures to streamline GMP Conversion are included in the Pensions Bill this autumn. I know HMRC have also been working hard on the pensions tax implications. It would be very helpful if they could provide reassurance that equalising benefits will not have unreasonable tax consequences on members nor create disproportionate administration for schemes.”