PASA has today issued guidance, drafted by the Equalisation Working Group, which outlines methods that schemes could use to implement GMP equalisation.
The guidance also addresses some of the tricky issues that are likely to arise on most GMP equalisation projects including what to do about:
- past transfers in
- “no further liability” cases (i.e. where a member or survivor has died or received a payment which purportedly extinguished their entitlement to benefits under a scheme), and
- “lack of opportunity” cases (i.e. where a member was unable to exercise an option under their scheme because if they did their benefits would not be enough to cover their GMP at the member’s GMP age)
It also considers how DC schemes with GMP underpins should approach GMP equalisation.
We sat on the sub-group that produced this guidance, so please let us know if you have any comments on it and we will ensure that these are fed in when the guidance is updated.
The intention is to update the guidance from time to time to reflect material developments and industry practice as it evolves in this area.
You can view PASA’s press release here.
Further guidance expected
PASA is due to issue further guidance in the coming months covering data, impacted transactions and tax.
We also understand that HMRC guidance on the tax issues associated with implementing GMP equalisation may be published some time in October.