Prior to the Lloyds Bank case very few schemes adjusted benefits to achieve GMP Equality. This was mainly because until the judgment, schemes were not certain equality was required and, if so, how it should be achieved. Schemes winding up would sometimes make adjustments to address GMP inequalities although much would depend on the funding position and status of the sponsor. In 2011, the Pension Protection Fund (PPF) adopted a method to equalise PPF compensation to reflect past GMP inequalities. It is now clear schemes need to adjust benefits to achieve GMP Equality and this has been a requirement since the European Court’s decision in the Barber case of 17 May 1990 (but only in respect of benefits earned after this date). This is subject to any applicable limitation period (see below). The extent to which inequalities in GMPs produce unequal pension benefits will depend on a number of factors, including the specific benefit design of the scheme and the individual circumstances of each member. For example, there is unlikely to be any inequality for a member retiring from pensionable service at age 60 in a scheme providing the same pension increases on the whole pension (including the GMP). However, the member may have been treated unequally if there was a period of deferment before the pension came into payment, because of the way GMPs are revalued. In contrast, a scheme providing different increases to GMPs and excess benefits will likely produce inequality even for those who retire at normal retirement age (NRA). All schemes undertaking an equalisation project need to review past payments and correct underpayments where necessary. This review of past payments requires a year by year approach to be adopted for all benefits which have been paid to or in respect of all members with periods of pensionable service between 17 May 1990 and 05 April 1997 (when GMPs ceased to accrue in contracted out schemes). Where a member’s Comparator would have received a higher benefit then a correction payment (with interest) will be due.


September 2019 – Equalising for the Effects of GMP – Methodology Guidance


Duncan Buchanan (Chair) (Hogan Lovells LLP)

Stephen Scholefield (Pinsent Masons LLP)

Julien Smith (Just Group plc)

Tony King (Reach plc)

Tim Smith (Herbert Smith Freehills LLP)

Faith Dickson (Sacker & Partners LLP)

Richard Akroyd (Willis Towers Watson)

Paul Charles (Isinglass Consulting)

Richard Gibson (Barnett Waddingham)

Rebecca Morgan (ITM Limited)

Felicity Boyce (Aon)

Alan Whalley (BCSSS)

Deborah Cooper (Mercer)

Heather Chandler (Shoosmiths LLP)

Mark Riordan (Capita)

Peter Scott (Equiniti)

Alasdair Mayes (LCP)

Rebecca Shevill (AXA)

Bill Mexson (Siemens plc)