XPS reveals pensioners owed up to £32,000 in GMP back payments
XPS Pension Group’s work on GMP equalisation projects reveals that pensioners could be owed as much as £32,000, with over half of schemes owing individual pensioners £10,000. All schemes so far owe at least one pensioner a minimum of £500.
Vicky Mullins, GMP equalisation lead at XPS Pensions said: “As we produce GMP equalisation calculations for more and more schemes, we are getting a clearer picture of the amounts that are likely to occur. Although the largest payments are eye catching, it is also interesting that even schemes that consider themselves largely unaffected owe some pensioners over £500 each, cash which would be most welcome to many.
GMP equalisation affects almost every defined benefit pension scheme in the UK and is expected to impact more than five million members. Pension schemes also now need to widen the scope of the GMP equalisation exercise to even more members following the supplementary judgment released last week. The change details each scheme’s responsibility to correct transfer values paid back to 1990 for the impact of GMP equalisation.
Ms Mullins added, “The supplementary judgment does not change what schemes need to do for their current members to correct their benefits, however it does add a whole new set of members that need consideration. Finding and communicating with these members may be difficult. Pensions schemes will need a process to find, verify and get payments to each of them. As schemes review their business plans for 2021, it is vital to ensure getting GMP equalisation done is firmly on the agenda to get these back payments paid to members promptly.”