GMP equalisation done properly
At a price you can believe in.
Guaranteed Minimum Pension (GMP) obligations are among the most technically complex - and most consequential - areas of defined benefit administration. Quantum Advisory's specialist team guides trustees through every stage of the GMP journey, from initial reconciliation with HMRC through to full GMP equalisation, with clear advice and no unnecessary complexity.
The challenge
GMP errors and gaps can have serious consequences - for members,
trustees and your scheme's future
Following landmark High Court rulings in 2018 and
2020, Trustees of defined benefit (DB) pension schemes that include Guaranteed
Minimum Pensions (GMPs) are required to assess whether members - past and
present - are entitled to top-ups due to unequal treatment of GMPs between
males and females. Despite this, a significant number of schemes have
still not completed GMP equalisation - meaning members continue to receive
incorrect benefits, and trustees carry ongoing legal and reputational risk.
If you’re a trustee of a small or medium-sized scheme,
GMP equalisation may still be on your to-do list for understandable reasons.
Complex benefit structures, incomplete data, and a lack of appetite from larger
advisers to take on smaller schemes have left some schemes in limbo.
At the same time, GMP issues have become one of the most common blockers
in pension risk transfer transactions. Insurers pricing a buy-in or buy-out
will require confident evidence that GMP liabilities are correctly recorded and
that GMP equalisation has been implemented before they will take on the
scheme's liabilities.
Partners in Confidence
At Quantum Advisory, we’re devoted to providing first-class pensions services to small and medium-sized schemes – because we believe every scheme deserves confidence that its needs will be met, at a fair price. We provide a big-name service on a first name basis, acting as your partners in confidence to navigate the complexities of GMP equalisation to deliver a proportionate solution that ensures the best possible outcomes for your scheme and members.
Our dedicated team of GMP equalisation experts, comprised of senior actuarial consultants, data specialists and project managers, bring extensive experience to every project. We take the time to truly understand your business and your scheme’s specific needs, ensuring a tailored approach that aligns with your goals. We stand in your corner. Clear advice, no surprises and fees you can predict.
With Quantum you get good people, providing high-quality, reliable and pragmatic advice and services, at a price you can believe in.
How we work with you
Expert GMP support. With the personal touch that larger firms can't match.
GMP projects require a rare combination of technical precision, administrative capability and clear trustee communication. With Quantum Advisory, all three come as standard - delivered by a team that knows your scheme and treats your project with the care and attention it deserves.
We manage the full GMP journey end-to-end, from data cleansing to member communications. Whether it’s an existing client or a standalone project we help Trustees plan, manage and deliver GMP equalisation exercises in an efficient and proportionate manner using a suite of models and templates that can be tailored to your individual schemes structure and style.
Our services cover:
- Data auditing and cleansing
- Reconciliation of GMP against HMRC records (if not already completed)
- Advice on methodology and calculation approach
- Calculation of uplifts and arrears payments
- Updates to member data
- Future calculation and administration routines
- Communications with members
- Full project management
GMP and risk transfer
GMP equalisation is not optional on the path to buy-out. If your scheme is on a de-risking journey - whether towards a pension buy-in, a full buy-out, or a transfer to a consolidation vehicle - getting GMP right is not simply a governance exercise. It is a commercial necessity.
Pension risk transfer providers will require evidence that GMP obligations have been correctly reconciled and that GMP equalisation has been implemented before they will agree to take on your liabilities. Schemes that arrive at the negotiating table with outstanding GMP work face the prospect of delayed transactions, price adjustments, or insurers choosing to prioritise better-prepared schemes in a competitive market.
Our Data Services Team works closely with Quantum Advisory's risk transfer specialists to ensure your GMP work is sequenced and scoped with your endgame objectives firmly in view.
The cost of delay
Schemes that delay GMP equalisation face growing risk. The Pensions Ombudsman has already cautioned trustees against unreasonable delay. For schemes on a de-risking journey, unresolved GMP issues are one of the most common blockers to buy-in or buy-out – leading to delayed transactions, fee adjustments, or insurers prioritizing better prepared schemes. And every month of delay means members may continue to receive incorrect benefits.
What good looks like
With GMP equalisation completed, your scheme is legally compliant, members are receiving the right benefits, and you have a clear, documented audit trail. If you’re on a path to buy-out, unresolved GMP work is off the table, giving you the best chance of a smooth and timely transition. And you can move forward with confidence, knowing the job has been done properly.
What is a Guaranteed Minimum Pension (GMP)?
Between 6 April 1978 and 5 April 1997, employers with defined benefit pension schemes could contract out their employees from the State Earnings Related Pension Scheme (SERPS). In return for paying lower National Insurance contributions, those schemes were required to provide a Guaranteed Minimum Pension — broadly equivalent to the SERPS entitlement the member would otherwise have earned.
GMPs are calculated differently for men and women (accruing at different rates and from different ages), which is the root cause of the equalisation requirement. When the Barber judgement in 1990 established that pensions are deferred pay and must be provided equally regardless of gender, it set in motion a decades-long legal process that was not finally resolved until the Lloyds ruling in 2018.
For any scheme that had contracted-out members during this period, GMP reconciliation, GMP rectification and GMP equalisation are all necessary steps.
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Talk to our team
Get in touch with our friendly team today to talk about how we can help your business.