On Friday, a Private Members Bill to amend and clarify the GMP Conversion legislation completed its second reading in the House of Commons. This means it now has a good chance of making it onto the statue book and help streamline the process of equalising benefits for Guarantee Minimum Pensions (GMPs).
The Bill contains amendments to allow regulations to clarify and streamline the process. This includes:
- Clarifying that conversion applies to both earners and survivors
- Clarifying which employers need to give consent
- Enabling clarification of the minimum survivor’s pension required
- Removing the need to notify HMRC
Alasdair Mayes, Partner and Head of GMP Equalisation at LCP lead the drafting of PASA guidance on the topic and was also referenced in Friday’s debate on the Bill. He commented: “This Bill is an excellent start in helping to make GMP Conversion simpler and more streamlined. It shows that the DWP has a good understanding of what more needs to be done to make the process easier. However, it isn’t the end of the journey as there is still much detail to be worked out. These changes will need to be set out in regulations on which there may be a consultation in due course.
“In the meantime, it will continue to be the case that GMP Conversion will be right for some schemes and not others. Trustees and employers will have to continue to choose the approach that works for them.”