The Pensions Ombudsman has found in favour of a complainant (an
actuary) who claimed that the trustees of the Sedgwick Group
Pension Scheme should have equalised the Guaranteed Minimum Pension
element of his benefits.
The statutory method of calculating GMPs reflects
the State Earnings-Related Pension Scheme benefits they replace. As
such, it is based on the current unequalised State Pension Ages and
so differs for men and women. The Pensions Ombudsman rejected
arguments that this was acceptable as it was intended to provide
equal total benefits once SERPS entitlements were taken into
account.
The Pensions Ombudsman ordered the trustees to
calculate GMPs on an equalised basis but did not give any
directions as to the correct method of doing so.
This determination is important for the majority of
contracted-out UK schemes as they have not equalised GMPs to date,
predominantly on the grounds of complexity.
For further information contact Mark Grant, Mark
Atkinson or your usual contact in the Pensions team on Tel 0171 367
3000. Alternatively, E-mail Mark Grant at msg@cms-cmck.com or Mark
Atkinson at maa@cms-cmck.com.