GMP equalisation 2

United Kingdom

Reference: H00177

A former employee complained about a transfer value. The complaint included an argument that GMPs under the scheme had not been equalised between men and women. The trustees argued that under section 63(4) of the Pensions Act, only an industrial tribunal or court can deal with equalisation cases. The Ombudsman did not believe that this was the case as he had jurisdiction over any dispute of law.

The trustees argued that the exception to the general equal treatment rule in section 62 of the Pensions Act where the inequality arises as a result of differences in state pension age applied. They went on to argue that the Ombudsman could not rely on Hansard to determine what section 62 was intended to mean. The Ombudsman disagreed and said that he could rely on Hansard and, in the course of the Pensions Act's passage through Parliament, Lord Mackay had said that GMPs should be equalised but the then Government was not going to dictate solutions to schemes. Therefore in the Ombudsman's view, section 62 did not apply to equalisation of GMPs.

The Ombudsman also said that in Coloroll, discriminatory provisions in domestic legislation were not found to be a defence to discrimination and ECJ rulings take precedence over national legislation.

In addition, as a matter of construction, section 64(2) (which permitted differences in prescribed circumstances) only applies to bridging pensions: it is not specific enough to apply to GMPs. The trustees also argued that GMPs and SERPS interact in a way that achieves overall equality, because the more GMP a member has, the less SERPS benefit. However, the Ombudsman pointed out that SERPS is in itself discriminatory and it was not the overall package which should be considered for the purposes of discrimination, but each separate component. The trustees also tried to argue that GMPs were not pay.

The directions given by the Ombudsman were to equalise GMPs in a way which does not adversely affect any member i.e. levelling up benefits. The trustees and employer successfully appealed (the court held in Marsh & McLennan Companies UK Limited v Williamson and Pensions Ombudsman that the Ombudsman had no jurisdiction - see the summary in the Court Rulings section of this site).