Kim Gubler, Chair, PASA commented: “The GMP equalisation journey started in earnest last year (October 2018) with the High Court’s decision to make equalising benefits for the effects of GMP (GMP Equalisation) a requirement throughout the operation of a scheme. Although we are still waiting for clarification on some points, the group has identified three initial areas we urge schemes to start working on now and not wait until all the details are known:
1. Understanding and progressing GMP reconciliation and rectification
2. Reviewing the quality of the data needed for GMP equalisation
3. Managing impacted transactions (i.e. transactions which need to be completed now but, if the scheme still has not equalised for the effects of GMP, may need to be revisited as part of an equalisation project).”
Lynsey Ellis, Akash Rooprai and Geraldine Brassett who chair the sub-groups which prepared the Call to Action added: “Equalisation has the potential to be a highly complex project for many schemes. We felt all stakeholders in the operation of a scheme could benefit from some information and guidance to help them take the first step on this journey. This Call to Action aims to provide exactly that kind of assistance to the industry.”
The Call to Action sets out key points for pension scheme trustees, managers, administrators, sponsors and advisers to consider, such as:
• The need for all stakeholders to work collaboratively to ensure a successful project;
• Recognising which the aspects of the project that will be scheme-specific, and those that will be common to all schemes
• The identification of good practice in terms of the planning, management and efficiency of the project.
David Fairs, Executive Director for Regulatory Policy, Analysis and Advice at The Pensions Regulator, said: “We welcome the publication of this Call to Action which provides trustees and their advisers with practical guidance on how to take the first steps in meeting GMP obligations. Taking early action will help trustees to be in the best possible position to deliver this complex work.”
The Call to Action will be followed up with a guidance paper on the relationship between GMP rectification and equalisation. Later this year the first version of full guidance documents for Data, Impacted Transactions, Methodology, and Tax will also be issued.
The full document can be found here.
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