GMP Equalisation

Confusedlad

I am a retired pensioner receiving a state pension and also 2 company pensions built up in the 1990's with 2 different 'big'  companies.  This question relates to these 'commercial' pensions.

I have recently received correspondence from the pension scheme of one of these companies regarding the conclusion of their GMP Equalisation investigation (which has involved me receiving both 'backpay' (with interest) and an enhanced pension going forward).  This prompted me to contact my second pension scheme to ask about their progress on GMP Equalisation.  I worked for them for a 3 year period in the 1990's and was contracted out and therefore believe I am in a very similar position with regard to their pension scheme as I was with the company who have completed their review.  I simply asked what progress they had made and if they had any information on their review or on a timescale for the likely conclusion of the review, if it is still ongoing.  All I got back was a short reply saying that they were taking advice and it "could be months if not years" before any announcement.  The court ruling was in 2018 (7 years ago).  I accept it is a lengthy & involved process but surely this is unreasonable - or are they just taking as long as they can to avoid paying out? Several past colleagues are no longer alive to potentially benefit from any equalisation and I'm getting no younger!

I would welcome your views and on how I might take this on to at least get more clarity. Am I being unreasonable in expecting answers?

xylophone

https://www.gov.uk/government/news/supporting-clients-to-equalise-pensions

Many pension schemes are still working towards equalisation.


 A relative was in a well established DB Scheme from 1968 to  around 2008, since when he has been in receipt of his pension.

GMP Equalisation exercise is ongoing with no resolution expected until at least next year apparently.....

FIREDreamer

I got a small increase of 3% to the annual pension for one of my two defined benefit pensions. Plus a taxable lump sum for previous underpayment. I took no PCLS when I started taking this pension. This was covering contracted out pensionable service from 1988-1993.

On the other defined benefit pension, covering contracted out pensionable service from 1993-1997 with a different employer and scheme, there was no equalisation increase. They provided the annual male v female pension breakdown to illustrate why there was no change. The female figures were slightly lower so I kept the existing pension.

So males don’t always get an increase due to GMP equalisation.

Marcon

Confusedlad said:

I am a retired pensioner receiving a state pension and also 2 company pensions built up in the 1990's with 2 different 'big'  companies.  This question relates to these 'commercial' pensions.

I have recently received correspondence from the pension scheme of one of these companies regarding the conclusion of their GMP Equalisation investigation (which has involved me receiving both 'backpay' (with interest) and an enhanced pension going forward).  This prompted me to contact my second pension scheme to ask about their progress on GMP Equalisation.  I worked for them for a 3 year period in the 1990's and was contracted out and therefore believe I am in a very similar position with regard to their pension scheme as I was with the company who have completed their review.  I simply asked what progress they had made and if they had any information on their review or on a timescale for the likely conclusion of the review, if it is still ongoing.  All I got back was a short reply saying that they were taking advice and it "could be months if not years" before any announcement.  The court ruling was in 2018 (7 years ago).  I accept it is a lengthy & involved process but surely this is unreasonable - or are they just taking as long as they can to avoid paying out? Several past colleagues are no longer alive to potentially benefit from any equalisation and I'm getting no younger!

In your shoes, I'd be thinking in a similar vein: the length of time is ridiculous - and if I got a top up from one scheme, then I'm hopefully in line for similar action from the other scheme.

But I'm not in your shoes; I work in the fantasy world of pensions, where time has its own meaning! The court ruling which started this whole GMP equalisation business was 35 years ago, and it took a couple of decades for clarity to arrive on what schemes needed to do and - at least in theory - how to do it. The scope and complexities of the exercise, and the cost (in terms of professional fees), are likely to be beyond the wildest imaginings of normal people. So no, schemes aren't spinning it out to try and avoid paying out, because any payments due will remain payable.

I wouldn't get your hopes up too much that the second scheme will also hand out backdated payments and an increase to your current pension. Different schemes have different rules and it may be that no adjustment to your pension will be needed; there's no simple way to know/guesstimate.

Confusedlad said:

I would welcome your views and on how I might take this on to at least get more clarity. Am I being unreasonable in expecting answers?

Not unreasonable, but sadly hopelessly over-optimistic. There is nothing you can do to 'take this on' and you need to accept that, at least for now, there is nothing to do but wait. Frustrating and annoying? Yes, very!

Troytempest

I worked for a large company also that is undertaking a GMP equalisation.

They have indicated that they expect this process to be completed by the end of this year.

fly-catchers

Royal Mail completed mine last year and I got a one off payment of £5! With my pension staying the same.

GMPEqCommenter

To agree with other people: Yes it's taking a while, but that's because it's hard. The calculations are tricky and the pool of people who can do them is quite limited, plus there can be quite a bit of work that needs to be completed prior to the actual equalisation calculations themselves being done (e.g. trying to link the dependants of deceased members back to the original member so you can work out what sex the original member was and what their date of birth, service and retirement dates were - information that isn't needed when all you're doing is paying the dependant their pension, but suddenly becomes very important when you need to work out what pension would have been paid for the last 20 years had the member been the opposite sex).

It's also entirely possible that the calculations will conclude that you're already better off than your opposite sex comparator and therefore you're not due any uplift. Males on average tend to be more likely to get an uplift and those uplifts tend to be larger, but it depends on both the scheme benefits and the individual member's circumstances.

JamesRobinson48

Granted, there is no deadline and this will continue to take time.

However, there was a Pensions Ombudsman ruling earlier this year to the effect that pension schemes (Volkswagen in this case) ought at least to be keeping members informed about their progress in resolving GMP equalisation. A small financial award was made to the complainant. See link below.

Ironically, after many years of silence, last month my own former employer (another large company) quietly posted a short briefing on its pension scheme portal stating that GMP work is under way and that I could expect to receive a pension top up in due course. That briefing also stated the method they will use to achieve equalisation. But no indication was given as to timing or amount.  I'm not surprised really: my circumstances are quite complex due to a Lifetime Allowance excess.

I have a hunch that the above briefing, done without fanfare, was mainly intended as the minimum needed to fend off complaints for the time being. 

https://www.pensions-expert.com/defined-benefit/gmp-communication-failing-costs-volkswagen-scheme-500/69328.article

GMPEqCommenter

JamesRobinson48 said:

However, there was a Pensions Ombudsman ruling earlier this year to the effect that pension schemes (Volkswagen in this case) ought at least to be keeping members informed about their progress in resolving GMP equalisation. A small financial award was made to the complainant. See link below.

Expanding on this, the original Ombudsman decision is here: https://www.pensions-ombudsman.org.uk/sites/default/files/decisions/CAS-71351-P8X2.pdf

My lay read of it is that the member had complained about the timeframe for equalisation, but the Ombudsman award was about the communication (or lack thereof).

Ombudsman Decision: 

This is a difficult and complicated project, and it is important to ensure it is carried out correctly. Therefore, although it should not be unnecessarily delayed, it is understandable that it will take a reasonable period of time to implement. I do not find that the project has, at this point, been unreasonably delayed.

westv

I dread to think how much money and time this has cost pension schemes.

snowlaser

westv said:

I dread to think how much money and time this has cost pension schemes.

Lots is the answer!

And I'm very torn on it, personally.  On the one hand most people end up with very small or no extra pension as a result, and it only equalises benefits earned since the (somewhat arbitrary) Barber court case date of 17 May 1990.  However, I have seen a few cases of people receiving up to £20,000 because that's how much extra someone of the opposite sex in their shoes would have got .  Until you spend the time and do all the calculations you just don't know.  For the people who have got thousands of pounds I'm sure they'd say it's worth the time and admin cost.