The Department for Work and Pensions (DWP) has published an interim response to the Guaranteed Minimum Pension (GMP) equalisation consultation and has requested help from the pensions industry for how the GMP conversion process might be used to equalise scheme benefits

The government announced that a full response to the consultation will be published at a later date and any final implementation of the Occupational Pension Schemes and Pension Protection Fund (Equality)(Amendment) Regulation will be delayed until all guidance has been considered.

The issue of equalising GMPs has proved to be a complex issue for the government recently, particularly around the exact method of calculation. The ‘Barber’ judgement in 1990 compelled trustees of occupational pension schemes to provide equal benefits to men and women, however this did not apply to GMPs and the government believes that this should be the case.

In April last year, seven industry bodies wrote a joint letter to Pensions Minister Steve Webb arguing that GMP equalisation programmes would add £13bn to pension scheme liabilities and a further £300m in implementation costs.

The DWP has proposed an equalisation method requiring an additional calculation to be made to compare what a member would get under scheme rules and the relevant legislation if they were treated as being a person of the opposite sex. However industry figures have warned that this method would double the cost of GMP implementation.

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