Trustee consultation on equalising Guaranteed Minimum Pension (GMP) benefits
04.07.2025
The government has asked pension schemes in the UK to equalise Guaranteed Minimum Pension (GMP) benefits. The Trustee is now consulting with affected members on their proposal for applying this in the Scheme.
The consultation will run for 60 days between 4 July and 2 September 2025.
Who is Affected?
This consultation concerns members of the Defined Benefit and British Sugar sections with GMP benefits.
You will have GMP benefits included in your pension if any of the following apply:
- You paid into the Scheme at any point between 6 April 1978 and 5 April 1997.
- You transferred in GMP pension benefits built up in another pension scheme.
- You are receiving a spouse/civil partner’s pension inherited from someone who had a GMP.
If none of the above applies, or you’re a member of the Defined Contribution (DC) section, you won’t be affected.
Letters have been sent to relevant members only that we hold a current address for. If you don't receive a letter within the next couple of weeks, and you think you may be affected, please contact us as soon as possible.
What is GMP?
Prior to reform in 2016, the State Pension had two tiers. Everyone paid towards the basic tier of State Pension, but those in employment also contributed to the higher tier, known as the State Earnings Related Pension (SERPS), and later called the State Second Pension (S2P).
Employers offering occupational pension schemes could opt employees out of SERPS in exchange for reduced national insurance contributions for both them and their employees. This was called ‘contracting out’.
GMP was introduced by the government as a protection to ensure that those who were contracted out did not receive less than those paying towards SERPS. Although GMP was abolished on 6 April 1997, pension benefits built up during the GMP period will continue to be linked to these old rules.
Why does GMPs need to be equalised?
The GMP was set by the government and linked to State Pension Age. GMPs were calculated differently for men and women, leading to unequal pension benefits.
However, a court ruling in 2018 made it a legal requirement to correct this imbalance for GMPs built up after 17 May 1990 and all pension schemes are now working towards ‘equalising’ GMP. This will ensure that, going forward, men and women in the same circumstances receive the same pension for the GMP period. The Trustee needs to make changes to your pension to meet this requirement.
What is the Trustee’s Proposal?
The Trustee proposes to equalise GMPs in the Scheme using a method known as 'conversion'. This involves the Scheme actuary performing a one-off calculation to convert the GMP into a regular pension benefit within the Scheme. Further information on how this could affect you, based on whether you are still paying in, are deferred or have retired, is provided within the letter you will have received.
What you need to do if you have received a letter
While there is no obligation for you to do so, if you have received a letter, you are welcome to provide comments to the Trustee on their proposed method for equalising GMP in the Scheme before the consultation closes on 2 September 2025. The Trustee will take all comments into consideration in making their decision. Instructions on how to submit your comments are included in the letter.
What happens when the consultation closes?
After the consultation closes, the Trustee will review any comments received and make a final decision. We will then contact affected members in October to:
- Confirm the Trustee’s decision on how to equalise GMP.
- Provide answers to any common queries arising from the consultation.
- Give more specific details on next steps.
Further information
Your letter contains further details on GMP equalisation including answers to common queries you may have. If you have any further questions after reviewing these, please do contact us.
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