Some of the questions we have been asked this week in relation to GMP equalisation, include –
Do we have to equalise for GMPs?
How do we do this?
Do we have to make back payments?
What should we tell our members?
How do we deal with outstanding and new cash equivalent transfer value requests?
These are all valid questions. Unfortunately, not all of them can (or should) be answered immediately!
First of all, a bit of background
Prior to 6 April 2016, pension schemes could be contracted-out of the state second pension. Between the years 1978 and 1997, the contracted-out element of a member’s pension was called the guaranteed minimum pension (GMP). This was broadly equivalent to the amount of state pension being given up by the pension scheme member via contracting-out in return for the payment of lower national insurance contributions. Continue Reading