20 November 2020
At 10:30 am on Friday 20 November 2020 Justice Morgan issued his long awaited judgment in the latest instalment of the Lloyds Banking Group case on equalising for Guaranteed Minimum Pensions (GMPs). The hearings focused on the issue of unequalised transfer values that have been paid in the past from one pension scheme to another at the request of individual members.
Alasdair Mayes, Partner at LCP said:
“Today’s judgment isn’t a surprise, but it will add to the burden for pension scheme trustees who already have plenty to keep them busy. Based on the equalisations we have already completed, top-ups will in many cases be small or nil, but for a few individuals will be thousands of pounds. In my experience the largest uplifts tend to be for men that worked / retired after age 60 but it’s very specific to each case.
He went on to say:
“The immediate action is for sponsors of pension schemes to assess whether the impact is material for their upcoming year-end accounts.
“Any top up will not be cash in hand to the member, but to their pension savings in the scheme they transferred to.
“Anyone who has transferred a DB pension earned after 1990 could be affected. Members do not need to take action at this stage. We would expect their pension scheme to check its records to see if an adjustment needs to be made, and this complex process will take months if not years.”