Consultation into equalisation of GMPs 'misconceived'

Linklaters partner Tim Cox said he was surprised that the PPF opened up a matter that has generally "been undisturbed for nearly 20 years".

Cox said: "People are comfortable about being in a position where they live with it and ignore it. I do question why they have gone to considerable expense to investigate this."

He said it was far from clear there is any legal duty on trustees or the PPF to equalise GMPs.

Cox said: "If there were a clear duty to equalise, schemes would have done so. The fact that few schemes have done so is evidence of the weight of legal opinion. If trustees have no duty to equalise GMPs, then neither does the PPF. It may also be discriminatory to equalise if there is no duty."

He added: "The PPF seems to assume that ‘caution’ requires GMP equalisation and it ‘cannot go wrong’ by equalising. This is clearly wrong.

"The PPF is just as likely to be discriminating by equalising GMPs as by basing compensation on benefits as set out in scheme rules.

"Indeed, it seems more discriminatory for the PPF to equalise GMPs than to provide benefits based on what the scheme would have provided."

A PPF spokesman said: "By law, the PPF does have to ensure that equal compensation is paid to comparable male and female members of schemes whose employers have gone bust and have transferred into the lifeboat scheme.

"We have developed a PPF specific solution to make sure men and women receive the same overall compensation where it would otherwise have been unequal due to differences in GMPs. These are primarily brought about by differences in state retirement age."