A Guaranteed Minimum Pension (GMP) is a part of your pension entitlement which you have if you were a member of the Scheme between 6 April 1978 and 5 April 1997.
Schemes like ours opted to ‘contract out’ of the State Earnings-Related Pension Scheme (SERPS) meaning during that period you didn’t build up earnings-related State Pension. Instead, you and your employer paid lower National Insurance. In return, the Scheme had to provide a minimum level of pension, known as GMP, in place of the State Pension you would have received.
Our Scheme had to provide a GMP from age 60 for women, and 65 for men, for most Scheme members between 6 April 1978 and 5 April 1997. As SERPS was unequal between men and women, GMP was also unequal.
Watch our short video to understand more about GMP.
Read the transcript
GMP Equalisation. Big words for a simple idea. So simple, in fact, that we can tell you the main things you need to know in under a minute. What else were you planning to do in that time? Wait for the barista to call your name? You didn't use your real name, right? Anyway, let's start the clock.
Number one, here's an acronym to know: GMP, short for Guaranteed Minimum Pension. It's part of some people's pension that's linked to the state pension.
Two, GMP Equalisation is just a fancy way of saying we need to try to make a small part of pensions fairer.
Three, you're only affected if you've got GMP benefits between 1990 and 1997.
Number four, for many people, GMP Equalisation will make little or no difference to the benefits they have now.
And lastly, number five, GMP equalisation affects males and females, and outcomes will depend on things like when you earnt your benefits, how much you earnt, and your retirement date.
So there you go. Stop the clock. You've just learned most of what you need to know about GMP equalisation in under 60 seconds. Have you got your drink yet?
And finally, even though the idea is simple, working it all out isn't. It's going to take time, but will keep you updated if you're affected. You don't need to do anything. Thanks for listening.
GMP equalisation
In 2018 the UK High Court ruled that schemes like ours must address any sex-based inequality as a result of GMP earned between 17 May 1990 and 5 April 1997 (you couldn’t build up any more GMP from this date). This is known as GMP equalisation.
GMP conversion
As the rules surrounding GMP are complicated, we decided to convert GMP into non-GMP pension. We believe this will make your pension simpler to understand and less costly to administer in the future.
Consulting you
We consulted the people affected about GMP equalisation and conversion before we took action and published information to help you understand whether the changes to GMP we were proposing would affect your personal tax circumstances.
Following the consultation, we decided to go ahead with GMP equalisation as proposed.
What we did
First, we checked our GMP records with HM Revenue & Customs (HMRC) to ensure they were correct.
Then, we converted all GMP into non-GMP Scheme pension, so that in future it increases like the non-GMP parts of the Scheme pension. A small number of members are still going through this process, we expect to have completed all conversions by autumn 2024.
Our approach has been to look at whether you’d be expected to have a higher pension in future if you were the opposite sex. If the answer is yes, we have made appropriate adjustments as we converted your pension to non-GMP Scheme pension.
If we needed to adjust your pension, we sent you a personalised statement showing the changes. The small number of members we are still working through will be contacted over the summer if any changes need to be made.
If you were already being paid your pension
Your statement included:
- details of any changes to the amount of pension you receive
- details of any one-off payment you may be paid to correct past underpayments to your pension, and
- how your pension would increase in the future compared to how it has increased previously.
We also sent you information to help you understand if any of the changes to your pension were likely to affect your personal tax circumstances.
If you were not yet receiving your pension
Your statement showed you how your Scheme benefits compare before and after GMP equalisation and conversion. This included details of how your benefits will now increase in the future, compared to how they would have increased previously.
We also sent you information to help you understand if any of the changes to your pension were likely to affect your personal tax circumstances.