GMP is a minimum level of pension built up from 6 April 1978 until 5 April 1997 (inclusive) in a pension scheme (like our Scheme) that was contracted out of the additional State Pension.

When a scheme was contracted out both the scheme’s sponsoring employer and the scheme’s members paid lower National Insurance contributions to the Government (and built up no additional State Pension), on the condition that the scheme had to provide this minimum level of pension to members. The way GMP is built up and paid is subject to different legal requirements to the other elements of your pension, in respect of the annual increases once the GMP is in payment.

Equalisation of GMPs

The State Pension age used to be age 65 for men and age 60 for women, and often retirement from a workplace pension was taken at the same time. A court case in 1990 determined that occupational pension schemes could not have different retirement ages between male and female members even if the State Pension ages were (lawfully) different. However, given the past inequalities, men and women historically built up different amounts in their GMP (which is linked to the State Pension) causing inequalities between the amounts paid to men and women.

A further court case in 2018 (involving Lloyds Banking Group) determined that schemes should not pay people different amounts of pension based on different retirement ages, so schemes must equalise pension amounts in respect of GMP for everyone impacted from 17 May 1990 to 5 April 1997.

What are we doing about it?

Currently the DB Section Administrator is carrying out an exercise to reconcile members’ GMP values to those held on HM Revenue and Customs records. As this was a period when there were high membership movements, it is a long process. It is important that the Trustee has accurate GMP figures and therefore the GMP equalisation stage cannot commence until this stage has been finalised.

At the same time the Trustee is working with the Scheme's sponsoring company, its advisers, and administrator to determine how best to address the issue of equalising the GMP element of current active, deferred and pensioner members' benefits. Once these members' GMP benefits have been equalised we will move on to former members.

An update will be provided once the above actions have been agreed.

Please note that not all members of the Scheme will be affected by this, and our actuarial advisers have advised that any changes to pension amounts are generally likely to be small.