Taylor Wimpey has estimated that the High Court ruling on guaranteed minimum pensions (GMP) will increase its defined benefit pension scheme liabilities by £15-20m.

The FTSE 100 firm, which recorded a pensions deficit of £56.3m in July 2018, said the increase will be recorded as an “exceptional charge” in its 2018 full results.

On 26 October 2018, the High Court ruled that Lloyds must now equalise pensions benefits for men and women, which could cost the bank up to £150m, in a case that set a precedent for thousands of companies.

In a trading statement issued today, 9 January, Taylor Wimpey, wrote: “Following the landmark legal judgment in October last year, ruling on the equalisation of GMP for men and women in UK defined benefit pension plans, we have reviewed our own position with our pension scheme trustees.”

It added that its position will be kept “under review”, including the amount of liability and any further government guidance.

The Department for Work and Pensions said it will be issuing guidance on its suggested methodology for implementing equalisation shortly.

According to its half year results, published on 31 July 2018, the group’s pension deficit fell from £232.7m in December 2016 to £63.7m a year later.

The firm agreed a four-year recovery plan with trustees at the end of 2016, contributing £40m annually, the option to pause payments should the scheme by more than 96 per cent funded.

As at July 2018, the scheme was 99 per cent funded and contributions have been paused.

Schemes were quick to assess the impact of the ruling, with many starting the arduous calculation process in the week following the landmark judgement.

In December, Dixons Carphone estimated that the High Court ruling could increase liabilities by 18m, while Stage Coach put the cost at £24.2m.

Compass Group estimates it would cost them between 1-2 per cent of liabilities, around £20-40m.

Despite this, the industry has been split on how to approach the GMP equalisation, with some opting in favour of method C, while others chose method D2.

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