Buzz: GMP costs out of all proportion

clock • 1 min read

More than two thirds of respondents believe the cost of equalising guaranteed minimum pensions (GMPs) will exceed the monetary risks posed.

One contributor accused lawyers of preying on the insecurities of lay trustees to generate work, while another labelled the advisory fees relating to GMP a "waste of precious resources".

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A commentator thought the costs had already gone beyond the risk, while another predicted the eventual bill would be many times the monetary risk.

Another contributor said: "We don't know what GMP equalisation will look like so the advisers are having a field day on working on all sorts of scenarios. We all need clarity and a simple, practical, pragmatic approach.

"The government has the scope for a simple solution to GMP equalisation: allow trustees to transfer these state pension replacements back to the state who can do the equalisation."

But speaking in support of advisers and lawyers, one contributor said: "Long ago pension solicitors and pension actuaries stated there was no practicable perfect means of equalisation and that the only reasonable course was to take the best practicable method for each scheme. It is time that the government accepted that opinion."

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