A Guaranteed Minimum Pension (GMP) was the minimum pension that schemes such as ours had to provide to members who were contracted out of the State Earnings Related Pension Scheme (SERPS). GMPs are linked to the old State Pension system which means they’re calculated differently for men and women, which can cause men and women in similar circumstances to receive different pension amounts.
A High Court ruling in 2018 addressed how pension schemes should adjust member benefits to deal with different treatment between men and women for GMPs. This process is called “GMP equalisation” and we’ve written about it in previous Pensions Updates.
GMP equalisation is a complex undertaking affecting a significant number of members who built up a GMP in the Scheme between 17 May 1990 and 5 April 1997. As this only applies to pension built up between those years, it’s likely that if an increase is payable at all, for most, it will be small. The process involves looking at historical data, dating back as far as 1990, and working with the Scheme’s administrators and advisers to amend the administration system and recalculate benefits. As a result, it can take a number of years to finish this exercise.
We’ve made good progress and, once the necessary calculations have been completed, we’ll write to people whose pensions are already in payment if they are affected in Summer 2025. If you have not yet taken your pension, any resulting pension increase will be reflected in future benefit quotations provided by Capita (the Scheme’s administrator) or on the member portal from Spring 2025.
We’ll make sure we keep you updated via the Scheme website. If you’d like to know more about GMP equalisation, we’ve prepared some helpful questions and answers here.