A draft bill to amend and clarify existing GMP conversion legislation has been published in Parliament.
In June, Margaret Ferrier, MP for Rutherglen and Hamilton West, announced that her bill would cover GMP conversion, which it has now published. The bill intends to amend pension schemes to provide for the conversion of rights to a guaranteed minimum pension.
The changes are technical adjustments to clarify and streamline the process, such as clarifying that conversion applies to both earners and survivors, clarifying which employers must consent, clarifying the minimum survivor’s pension required, and eliminating the need to notify HMRC.
Trustees and sponsors say they are eager to use GMP conversion to achieve GMP equality; however, clarifications and amendments to existing legislation would be beneficial in streamlining the process.
The bill’s second reading will be on November 26 2021.
Lane Clark & Peacock LLP partner and head of GMP equalisation Alasdair Mayes says: “It is great that this bill covers the key areas where clarification and streamlining of the primary legislation on GMP conversion is required. It is no secret that the GMP conversion legislation has some rough edges that need to be smoothed.
“Industry survey after survey has shown that GMP conversion, in some shape and form, is preferred by many as a means to equalise benefits for GMPs over the administratively complex ‘dual record’ approaches. This bill will make the whole process of equalising benefits using GMP conversion easier.”
