New consultation means ‘end is finally in sight’ for rules around streamlining GMP conversion

Pensions Minister Torsten Bell has today launched a consultation to provide certainty on the use of GMP conversion to deliver sex equality of pension benefits for those who earned Guaranteed Minimum Pension (GMP) between 1990 and 1997. GMP Conversion is one of three methods commonly adopted by trustees to deliver equality for members.

These regulations will bring into force the amendments made by the Pension Schemes (Conversion of Guaranteed Minimum Pensions) Act 2022. They will also streamline many aspects of the conversion process.

Alasdair Mayes, Partner and Head of GMP equalisation at LCP, commented: “In 2022 I worked closely with Margaret Ferrier MP to help her bring forward her Private Members Bill to clarify, simplify and streamline the process of using GMP conversion to deliver sex equality for members. It successfully became an Act but that wasn’t the end of the journey. It’s good news that Torsten Bell has launched this consultation today on regulations to bring in the measures on the Conversion of Guaranteed Minimum Pensions. The legislation should be really helpful in making the process of equalising benefits simpler, faster and, for those applying GMP conversion at retirement, cheaper.

“HMRC consulted earlier in the summer on regulations to remove the pensions tax hurdles associated with using GMP conversion for non-pensioners. Taken together these two sets of regulations will be really helpful. It’s been a long journey, but the end is finally in sight. One drawback is that it is proposed those that have already consulted with members on using GMP conversion but haven’t yet applied conversion will need to re-consult to use the new regime. That hurdle I hope can be removed in the final regulations.”