Trustees are optimistic about the progress being made on GMP equalisation with more than half (55 per cent) expecting to be making pensions in payment on an equalised basis by the end of 2022.
This upbeat assessment comes from a recent survey by Sacker and Partners, a law firm specialising in pensions and retirement savings. It said there were now “clear signs” that the majority of schemes have GMP equalisation underway in some capacity.
Sackers partner Janet Brown says: “After over 20 years in the making, it was starting to feel like GMP equalisation was an issue that might never end. However, our webinar survey shows that many trustees are well underway, and optimism abounds.
“Aside from resource, the main challenges [facing trustees] are data, tax uncertainty and a desire to get things perfect, in an imperfect world. Data as ever is the main challenge for many, with our survey showing that just over a third of respondents (34 per cent) have ‘data gaps’. There is not always a right answer. Our advice to trustees is to be pragmatic by comparing their data requirements against the data they hold and working out how best to fill the ‘gaps’.”
She adds that tax was an issue for just under a quarter of respondents (24 per cent). This, she says can be a a trickier problem to solve. “But there are ways to get round tax concerns or simply lift out from the conversion exercise those members affected.”
Brown adds that while people on the whole were optimistic about equalisation, it was interesting to note that in the survey responses of those considering GMP conversion, there was a clear majority for keeping the converted benefit as near to the existing structure as possible. “Minimal interference in benefit design is the route to be taken by over 40 per cent of those considering conversion.”