On 26 October 2018, the High Court judgment on the Lloyds case confirmed the need to improve benefits to make allowance for the inequality between males and females in guaranteed minimum pensions (GMPs) - known as GMP equalisation.
This will mean increasing benefits. Although XPS research shows that the impact of this is less than 1% of liabilities for the majority of schemes, it can represent a significant amount for individual pensioners. XPS estimates the average payment due to pensioners is £1,000, and in extreme cases some pensioners could be owed up to £25,000.
It is important to focus on tackling GMP equalisation now to get payments into the hands of pensioners who need them. Importantly, solving GMP equalisation does not need to be as complicated as many believe. Trustees can cut through the data complexities and can make significant progress very quickly, often in as little as six weeks. Watch the video.
Overcoming the obstacles
For most trustees, data is the biggest obstacle to getting GMP equalisation done. Reviewing data that is not needed is ultimately a waste of time and cost. What matters is focusing on the right data. XPS has developed a unique equalisation process to target work towards only data items that actually make a difference to the GMP equalisation outcome for members. This makes for a more efficient and effective project. Register for the webinar.
It is important to recognise that industry and government guidance is unlikely to be expanded and this approach allows progress working with what guidance and direction exists. The unique XPS approach allows trustees to make rapid progress. In as little as six weeks you can identify what data matters for your scheme; understand how each pensioner is individually affected and what payments they're owed and be ready to move forward with clear recommendations.
This gives you visibility over the whole GMP equalisation project and, importantly, what is needed to get to the end point of paying the payments owed to your pensioners.
For more details, watch the video.
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