A bit more about GMPs and why we need to equalise them

A bit more about GMPs and why we need to equalise them

What’s GMP?

GMP is the Guaranteed Minimum Pension the Scheme had to provide you with from a specific age (60 for women and 65 for men) for most Scheme membership between 6 April 1978 and 5 April 1997. This is because most members of UK pension schemes didn’t build up earnings related State Pension. Instead, you and your employer paid lower National Insurance. In return, the scheme had to provide GMP which was broadly equivalent to the reduction in State Pension arising from your period of membership of the Scheme. As the State Scheme was unequal between men and women, GMP was also unequal.

What’s equalisation

GMP equalisation is the work all pension schemes like ours have to do. It will equalise any inequality as a result of GMPs for men and women in between 17 May 1990 and 5 April 1997 being different.

Why now?

In 2018 the UK High Court ruled that schemes like ours must take action to address any sex-based inequality as a result of any GMP earned between 17 May 1990 and 5 April 1997 (you couldn’t build up any more GMP from this date).

What’s conversion?

GMP conversion is when GMP is turned into non-GMP pension. It looks at what your current Scheme pension (including GMP) is expected to be in the future, allowing for any GMP equalisation required, and turns it into a new Scheme pension (excluding GMP) which is expected to be at least as valuable in the future. This is how we plan to equalise future GMP payments for our members. The law requires that your new Scheme pension has at least the same actuarial value as your current Scheme pension. The Trustee receives advice from the Scheme Actuary on what assumptions should be used to work out whether the new Scheme pension has at least the same actuarial value.

Why convert GMPs?

We believe converting GMP into non-GMP Scheme pension will be simpler for members to understand, less costly to administer in the future and deliver GMP equalisation for our members.

Will my pension change?

It will remain the same or possibly increase. If we find that you should have more pension, we’ll write to you to let you know when your pension will increase and by how much (but this is expected to take up to around a year to cover all members). Any increase is likely to be small. We might also pay you a one-off amount to make up for any ‘equalised’ or corrected pension you missed out on previously.

We’ll send you a personalised statement to confirm your new pension, whether it changes or not.

We’re consulting on the changes, read your guide and if you have any questions or feedback email us at santandergmp@mercer.com

Get in touch

For further help and 
information contact the
Scheme’s Administrator Mercer

  • Mercer, Post Handling Centre,
    St James’s Tower,
    7 Charlotte Street,
    Manchester
    M1 4DZ
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