GMP rectification – Why do so many schemes hesitate starting GMPr?

There are plenty of projects competing for trustees’ time these days, and it’s tempting to push the trickier ones further down the list.

But given GMP reconciliation work should have been completed years ago, why are so many schemes still hesitating to commence GMP rectification (GMPr), when they know they are holding data or paying benefits that are wrong?

Why are schemes hesitating?

Here are some of the reasons I still hear across the industry:

• "We haven’t fully completed our reconciliation project and don’t yet have a complete picture of who requires rectification."
• "We want to do GMPr alongside our GMP equalisation (GMPe) project so we only need to communicate once with members."
• "We need to do more data cleansing first."
• "We’re waiting for further tax or legislative clarity."

When this blog was first published, some trustees were holding back due to legal uncertainties around GMP conversion but the Pension Schemes (Conversion of GMPs) Act 2022 has since clarified the framework, removing that barrier.

The first three reasons can be valid, but too often they are a reason to delay rather than a reason to act. And with HMRC’s 2022 newsletters clarifying tax treatment of top-ups, arrears and transfers, trustees now have the legislative and tax framework they need to proceed.

Meanwhile, the Pensions Ombudsman has made clear that poor communication and lengthy delays can generate complaints and even awards for distress. Doing nothing is not a safe option.

Key lessons learned from GMPr projects

Having been involved in many rectification and equalisation exercises, here are the most important lessons:

Complete your GMP reconciliation, properly

You cannot undertake GMPr or GMPe without it. 

Decide whether to run GMPr and GMPe together, with evidence

Use PASA’s When to Rectify guidance as your starting point. Do a simple overlap analysis of members affected by both projects. Consider data gaps and project timelines. HMRC’s tax guidance is now available to help with payment mechanics and communications.

Prioritise quick wins

Rectify members who won’t be impacted by GMPe (for example, non-pensioners or pensioners out of scope). This prevents problems compounding while you finalise equalisation plans.

Get your communications right

Explaining GMP issues will always be challenging, particularly if members’ pensions move in different directions under GMPr and GMPe. But don’t let that stop you. Clear, honest communications matter more than ever, and trustees should timetable updates. The Ombudsman has stressed that poor communication is itself a governance failure.

Document every decision

Record why you chose your approach and timing. This protects you in future if questions are raised by members, regulators or auditors.

The bottom line: Act on GMPr now

Trustees can no longer justify putting rectification on the “too difficult” pile. The legislative and tax frameworks are in place, industry guidance is clear, and regulator expectations are rising.

Don’t kick the can down the road: the longer you leave known errors uncorrected, the bigger and more expensive your problems will become.