Back to news 13 September 2019

Guaranteed Minimum Pension (GMP) equalisation – an update from the Trustees

There has been recent coverage in newspapers of the problem of GMP equalisation, resulting from a court case involving the Lloyds Bank pension schemes and the need for schemes to equalise benefits to remove gender inequalities in the GMP calculation. It relates to the part of a member’s pension that would have built up because of an occupational pension scheme being “contracted-out” of a certain element of the state pension. RPF, like many other defined benefit pension schemes, was “contracted-out” for a certain period of time and as a result some members have GMPs which built up between 1990 and 1997. Further information about RPF being “contracted-out” and GMPs can be found in the member booklet.


GMPs were different between men and women under law. The court case involving Lloyds has changed that, so schemes will now be expected to make an adjustment in view of the unequal way GMPs were calculated. The Trustees of RPF are currently taking advice on the best way to give effect to the Lloyds case. At the moment there is still considerable uncertainty about the case which has left some unanswered questions. A further hearing is expected in early 2020 and industry guidance is also expected. Applying any necessary adjustments will therefore be a lengthy and complex process, but it could mean that some members will in due course see a small upwards adjustment in the value of their pension (there will be no downwards adjustments). 


We will continue to update you as the process evolves. In the meantime, it’s very much “business as usual”, with the RPF continuing to provide benefits in the normal way.