Buzz: No rush to act on GMP equalisation

clock • 2 min read

Buzz respondents do not believe trustees should be racing to act on guaranteed minimum pension equalisation, given the latest delay in implementation.

Almost half of contributors said schemes should take no action, two in five think it would be sensible to check scheme data is in order, and just one in ten believe now is the time to explore options for equalisation.

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Several respondents who thought schemes should do nothing said this was because the ones they knew were as prepared as they could be and just waiting for an implementation date to be confirmed.

"The data has already been checked and the options have already been explored," said a confident contributor. "All we want is a final decision."

There were dissenting voices however, with another correspondent claiming the majority of schemes had not validated GMPs. But others thought it best to just wait and see what the government's next move would be.

"Experience to date would suggest that many schemes have done no more than 'overview' their data to consider what may be necessary," said one contributor. "But in terms of exploring the options, this government may provide a remedy no one would have thought of so perhaps that is not time best spent, with auto enrolment on-going for certain DB schemes."

Another commentator said: "Let's face it, the government can't now change its mind about the legal necessity of GMP equalisation, but it can keep kicking the matter into the long grass until economic times are better."

But a significant number of respondents thought there was no harm in trustees making sure they had the data to act as soon as the government set a firm timetable. They pointed out that whenever and however GMPs had to be equalised, clean data would be essential.

One said: "With a large proportion of schemes closed to future accrual there is really no reason not to ensure all GMP data is correct versus HMRC records."

A correspondent who said to do nothing would be "ostrich-like" explained: "Trustees should be providing for equalisation either within technical provisions or as an estimated contingency provision."

But a contributor who though trustees should be more proactive said: "This is a chance to get ahead of the game and do some exploration using different dates."

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