GMP Equalisation

Charlton0

Hi there,

Has anyone experienced the following, and/or can anyone offer any assistance?

I have a small DB pension relating to the time I was contracted out of the state earnings-related pension scheme. I was originally provided with a benefits pack detailing the benefits payable before and after GMP equalisation, and was advised to source an annuity on the open market. I subsequently asked the Trustee if I could obtain a transfer valuation instead, as I am still working and have an existing pension. This was accepted, and I received a one-off transfer pack detailing the transfer value and benefits, which had to be transferred/completed within 6 months.

I contacted both pension providers' administrations to start what I thought would be a simple transfer process and provided/completed all necessary documentation supplied to me. However, their inability to communicate directly with each other on most matters, unless I intervened, caused time delays, which meant the 6-month deadline rapidly diminished. The straw that broke the camel's back came at the eleventh hour when the receiving pension provider declined to accept the transfer due to the fact that the pension transfer had not been equalised. On investigating this issue, I was informed by the receiving provider that it was a HMRC requirement, whilst the incumbent provider disagreed. Due to this problem, the transfer did not happen, and I now have to start the process again, if I can.

I cannot understand why the first benefits pack I received included a GMP equalisation calculation, but the transfer pack did not include a GMP equalisation calculation. Any thoughts?

This whole process has been shambolic from start to finish. There have been numerous problems, and I cannot believe that two so-called pension administrators could not communicate with each other and resolve a simple pension transfer. I am in the midst of documenting what has happened to send to the ombudsman.

PensionsStuff

There is absolutely zero requirement for gmp to have been equalised for a transfer to happen, the company you were trying to transfer to is entirely wrong (or, someone just gave you the wrong explanation). They are within their rights to not transfer it because of it, just like they are within their right to not want to for any reason they can think of for whatever commercial reason they decide, but thats their decision, not HMRC.

I would have expected this to come up much sooner. Most transfer packs I've seen will outline whether GMP has been equalised (did yours?) And equally its a common question that would be asked very early on by the receiving scheme to avoid such a scenario.

Charlton0

Many thanks for your response PensionStuff.

On reviewing the transfer pack documentation it does (in small print, not even highlighted) state that GMP has not been calculated. However, in the first benefit pack I received, GMP equalisation had, quite clearly, been calculated. I cannot understand why they can calculate a GMP figure for one but not the other. The receiving scheme via there indemnity schedule did request whether the transfer had GMP equalisation applied or not. The sending scheme simply stated that GMP had not been calculated and continued with the transfer process. At this point the receiving scheme closed the transfer.

Because of the urgency to get the transfer done I, on numerous occasions, had to intervene with both providers to sort matters out. I would have thought that two recognised scheme administrators should have noted this problem earlier (as you noted) and attempt to resolve the matter between themselves. What, at the outset, I thought would be a straightforward process turned out to be a stressful experience that concluded without the transfer happening.

The receiving scheme informed me that it was a HMRC requirement to have GMP equalisation applied and the sending scheme, at my insistence, did try and get an answer to this but nothing was forthcoming. You state this is incorrect, I have had mixed responses on this particular point from other people so could you direct me to the regulation/directive that states this, please?

As I mentioned before and because everyone I have contacted subsequently have ended up suggesting I complain to the ombudsman, this is what I shall do. In my view this does seem to be an excessive conclusion to a simple transfer request that should have been handled appropriately by so called professional pension administrators.

Regards.

Marcon

As I mentioned before and because everyone I have contacted subsequently have ended up suggesting I complain to the ombudsman, this is what I shall do.

People do tend to do that simply because they've heard of the fact there is a Pensions Ombudsman. Be aware that before the PO will look at a case, you are expected to have exhausted any complaint procedures open to you. It sounds as if you are complaining about both the ceding and receiving schemes? As you are in an occupational scheme you will need to go through their Internal Dispute Resolution Procedure (a copy of which will be available from the scheme's administrators - it's scheme specific); and also the complaints procedure for what you hoped would be the receiving scheme, if that's some sort of personal pension.

I appreciate you are utterly frustrated, but that doesn't mean you will automatically 'get something' if you do ultimately complain to the PO. You haven't demonstrably lost anything financially - your scheme pension is still available to you - so the most you'd get is a payment for distress and inconvenience, which is by no means guaranteed.

Charlton0

Many thanks for your response Macron.

I am aware of the IDRP requirement and have just finalised the paperwork for submission. I also hear what you say about the PO and will bear this in mind when I contact them.

The pension benefit value is less than £10k and relates to the period I was contracted out of the state earnings pension scheme. I started the process of taking this benefit in March 2023, and here I am over three years later still trying to sort it out, amazing!

Regards.

QrizB

I have a small DB pension relating to the time I was contracted out of the state earnings-related pension scheme. I was originally provided with a benefits pack detailing the benefits payable before and after GMP equalisation, and was advised to source an annuity on the open market.

This sounds more like a Defined Contribution (DC) pension than a Defined Benefit (DB) one? Are you sure it's a DB?

Marcon

https://forums.moneysavingexpert.com/discussion/comment/82030979#Comment_82030979

If GMP equalisation is involved, it's either a true DB scheme, or a COMPS with a GMP underpin. Either way there's clearly a GMP-related issue in the eyes of the receiving scheme.

On reviewing the transfer pack documentation it does (in small print, not even highlighted) state that GMP has not been calculated.

OP, you're getting the IDRP underway in respect of the ceding scheme, but how about the receiving arrangement? The GMP information was in the pack. No reason it would be highlighted - up to them to read the info they've received.

Charlton0

Many thanks for your response QrizB.

I believe the scheme is a DB one. I worked for a US bank that after I left it got taken over by another bank and it's penion scheme was transferred into the receiving banks scheme and operates as a designated legacy section. It's their administrator who I'm dealing with. The original bank did have a DC section but that was for AVCs which I never utilised.

QrizB

^ Thanks both. I was thrown by the "source an annuity on the open market" line; this isn't what usually seems to happen with a DB pension. Every day's a schoolday!

Marcon

Every day's a schoolday!

Completely agree - but after 3 years of trying to sort this out, I doubt OP is too interested in the theory! Resolution not rhetoric…

Going through the IDRP for the ceding scheme, and the relevant complaints procedure for the receiving arrangement, might actually get to the cause of the issue and resolve it without any need to go to the PO. That's certainly a preferable route, given the very long waiting list for the PO to deal with their huge caseload. If it doesn't do the trick, then once OP has completed both complaints procedures the way is clear for an approach to the PO.