Personal Pension  

Most DB schemes will fail to meet GMP deadline

Nearly half of pension professionals in the UK think most defined benefit schemes will miss the deadline for assessing their members’ guaranteed minimum pension (GMP), research has shown.

The research, carried out by EDM Group, shows that 49 per cent of people surveyed thought DB schemes would miss the April 2016 deadline.

As part of its phasing out of the state second pension the Government is passing responsibility to DB schemes to administer contracted-out rights and ensure scheme members are paid the correct GMPs.

Article continues after advert

This will require schemes to ensure that their own data matches the records held by HMRC.

The government is offering a service to reconcile data between HMRC and pension schemes, but to use this service schemes must hold accurate assessments of their members’ GMP rights by April 2016.

EMD’s research shows only 23 per cent of pension professionals believe most of the 4,500 schemes affected will meet the deadline.

Lee Foord, associate director at EDM Pensions Data Services, said: “Many trustees may be unsure of what all the changes mean. They will either be unaware of, or have underestimated, the labour and cost involved in the administration of this process, especially where the data is contained in physical formats.”

Adviser view

Phil Perry, director of Cheshire-based Ark Financial Planning, said: “You would hope trustees are keeping on top of the changes which are being introduced. They have a legal responsibility to do so.

“If they are not, they should be held responsible for it.”