Delivering GMP equalisation with the right outcome for members
GMP equalisation explained
On 26 October 2018, the High Court made a landmark judgment confirming that pension schemes were required to equalise male and female members’ benefits for the effect of guaranteed minimum pensions (GMPs).
Trustees therefore have to decide how to equalise members’ benefits and may also need to agree their approach with the Company. In most cases, the benefit adjustments will be quite small – but there could be significant individual exceptions. Some schemes will also want to combine their GMP equalisation project with the rectification of GMP following reconciliation with HMRC records.
Building on our experience of working on these projects since the original judgment, Mercer’s approach to GMP equalisation is designed to put people first and ensure that projects are executed in a way that is simple, agile and tracked for our clients and pension scheme members.
We offer a wide variety of services covering all aspects from strategy to detailed data checks, through calculations to communications, and can support GMP projects whether we are the Scheme Actuary or not, and whoever is the administrator for the Scheme.
GMP equalisation: simple agile tracked– how we can help
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Simple
- Promoting pragmatism and reducing the number of Trustee decisions is fundamental to our approach. We understand the important decisions and we deliver advice and support to our clients that focuses on these key decisions. We make clear recommendations based on our understanding of each client’s objectives and our knowledge of each scheme.
- Standardising our calculations and documentation where possible makes the process simpler for everyone, focusing on the areas relevant to each scheme and material to member outcomes.
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Agile
- We prepare the data and run preliminary rectification and equalisation calculations towards the start of the project. This gives our clients early insight on the impact of GMP equalisation for a scheme, allowing decisions to be made in the context of member outcomes.
- Using the results of the preliminary calculations, we focus on the data gaps and any areas of uncertainty that are relevant to each specific member, reducing the amount of data cleansing required and leading to a faster and more cost efficient delivery.
- Our specialist GMP Projects Team works with you throughout the project, minimising the reliance on the business as usual administration team.
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Tracked
- Our Data Management Platform provides a robust audit trail by recording all data changes and any assumptions made to fill data gaps.
We are delighted Mercer has chosen to work with Intellica to support their clients with GMP Rectification and GMP Equalisation. Through close collaboration, Intellica and Mercer have utilised their extensive expertise and experience to develop an intelligent software solution, tailored for this data challenge. This solution provides an exciting approach to the GMP data challenge, enabling an end-to-end solution for GMP rectification and equalisation.
Brendan Doherty, Intellica CEO
Mercer’s approach to GMP equalisation
We understand that GMP equalisation is not something that everyone gets excited about, so our simple, agile and tracked approach has been developed in part to make the subject easier and more accessible.
Principal
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