The Plan Trustee, in agreement with the Principal Employer, is currently going through a process called GMP equalisation, which may have an impact on benefits for some Defined Benefit (DB) Section members. It follows the work done in previous years on GMP reconciliation and rectification (GMPr), which you can read more about on our GMPr page.

This page answers some Frequently Asked Questions about the situation. You might like to start by watching these two short animations, which explain what we are doing.

Between 6 April 1978 and 5 April 2016, in addition to the basic State Pension, there was an additional earnings-related State Pension.

Workplace pension plans could choose to ‘contract out’ of the additional State Pension, meaning they would commit to providing certain minimum benefits in return for both members and the employer paying reduced National Insurance contributions.

Those equivalent minimum benefits built up between 6 April 1978 and 5 April 1997 are called Guaranteed Minimum Pensions, or GMPs.

GMPs are often a relatively small part of the pension provided by a workplace pension plan. They are broadly similar to the additional State Pension they were intended to replace.

GMP equalisation is a process that adjusts GMP benefits for men and women so that they are treated equally. Whereas GMP reconciliation involved checking records and updating data where necessary, equalisation requires additional calculations before any adjustments can be made.

In common with many other UK pension schemes, we have been checking our GMP records to make sure we have the right GMP amount on file for you. This work happens in three parts:

1. GMP reconciliation, which the Plan has now completed.
2. GMP rectification, which the Plan has now completed.
3. GMP equalisation, which the Plan is in the process of completing.

You can read more about the first two stages of this process on our GMPr hub.

GMP equalisation is required because, in order to align with the additional State Pension they were designed to replace, GMPs were paid at different ages for men and women, and could be built up at different rates. The European Court of Justice ruled in 1990 that UK pension schemes had to treat pensions equally for men and women, but GMPs remained unequal in some cases. A High Court ruling in 2018 (also known as the Lloyds case) determined that this inequality should be removed, so GMPs built up between 17 May 1990 and 5 April 1997 (when people stopped building up GMPs) must be equalised.

You may be affected if you were a member of the Plan between 17 May 1990 and 5 April 1997, or if you transferred GMP benefits into the Plan from another pension arrangement. If this is not the case, you will not be affected.

If you are receiving a spouse’s/dependant’s/child’s pension and the member in respect of whom you are receiving that pension was a member between the dates above (or had transferred GMP benefits into the Plan), you may be affected.

The GMP equalisation process is complex and time-consuming, so please bear with us while we complete this important work.

If you are already receiving your pension and the GMP review results in a change to your benefits or a back payment because you have been underpaid in the past, we will write to you to let you know. 

If you are not yet receiving your pension, we will either review your benefits after you have retired (and write to you at that point if you are financially impacted), or we will make the necessary adjustments to your records so that your payments are correct when they begin – this will depend on the timing of your retirement.

The GMP equalisation process is ongoing, but we can confirm that no members will experience a decrease in their pension benefits.

If you are already receiving your pension, there may be an increase in your regular payments. However, most members of the Plan will see no change to their benefits.

If your Plan pension is already in payment and GMP equalisation reveals that we have underpaid you in the past, you may receive a one-off back payment. Depending on your circumstances, there may be tax implications if you receive a large back payment. You should contact Gallagher (formerly known as Buck) the Plan Administrator or an Independent Financial Adviser if you are concerned about this.

We are only writing to members who are already receiving their pension and who are financially impacted by GMP equalisation. If you have a GMP element in your benefits but have not heard from us, this could be for one of the following reasons:

• You are not yet receiving your pension (i.e. you are a deferred member). If this is the case, we will not be writing to you as part of this exercise. However, we can reassure you that we are making the necessary adjustments to equalise your pension now so that your payments are correct when they begin.
• Your GMP relates to membership before 17 May 1990. GMPs built up prior to this date are out of scope for equalisation, so you will not be financially impacted by this exercise.
• The equalisation calculations have not resulted in an increase to your benefits or a back payment. If there has not been a financial impact for you, we will not be writing to you about GMP equalisation.
• Your equalisation calculation has not yet been completed. The Trustee and Principal Employer have a detailed plan to implement GMPe. They will start with pensioners, dividing them into groups because the Plan is large. After that, they will address deferred members who haven't retired yet. If you have not yet heard from us, it could be that your equalisation calculation falls in a later group, in which case we expect that you will hear from us later in 2025 or in 2026.

If you are concerned that we might not have the right address for you, go to the Member Portal to update your contact details.

Disclaimer

This webpage and the information contained herein are provided as a summary of the law and guidance applicable at the time of issue. It is intended for general informational purposes only and should not be construed as legal advice or relied upon in any specific legal situation. Please be aware that benefits and entitlements are ultimately governed by the provisions of the Plan’s trust deed and rules, which are subject to amendments and modifications from time to time and the governing legislation.