As reported by Pensions Expert, Lucy Stone, policy lead at TPR, has urged trustees to get on with GMP equalisation.
With all the focus on the regulatory powers and criminal sanctions (which came into force on 1 October 2021) this is a timely reminder for trustees to focus on their obligation to pay the right benefits to the right members at the right time.
GMP equalisation has caused, and is still causing, several headaches in the industry but the underlying premise is simple: comparable men and women must be paid equal pay for equal work. Broadly, the obligation to equalise has been clear for three years now (since October 2018) and the longer a scheme goes without equalising, the bigger the headache to put right.
TPR has acknowledged capacity constraints in the administration industry but has encouraged trustees to press on with GMP equalisation projects (albeit we understand TPR has no particular timeline for GMP equalisation to be completed). We would also encourage trustees to seize the moment and plan thoroughly. This includes trustees of ongoing schemes as well as those who have to act because of an imminent scheme event (such as an annuity purchase or a merger).
We are seeing most schemes having formed working groups and having at least begun to consider GMP equalisation with their employers. Trustees who have not already done so should reach out to their administrators and consider member communication. PASA’s GMP equalisation working group has published new guidance (including example text) on this.
We are helping many clients tackle the pitfalls and are seeing approaches emerge to the most common questions – if you have any GMP equalisation questions, please do not hesitate to get in touch. When it comes to GMP equalisation, there is no time like the present.
Welcome to Burges Salmon’s Pensions Law Summary on GMP Equalisation. Our pensions law summaries aim to simplify complicated topics in pensions law and provide practical steps for employers and trustees.