Pensions consultancy firm Buck has launched a tool for schemes processing guaranteed minimum pension (GMP) equalisation.
The solution, named Square, comes after October’s landmark ruling by the High Court and additional ruling in December mandating that UK DB pension schemes must equalise for GMP benefits between men and women.
Square enables trustee and company advisers to work alongside Buck to provide a one-off, self-contained project to deliver GMP equalisation for their schemes.
It also produces a list of member benefit adjustments, summary report, and quantification of the financial impact for the scheme.
David Piltz, UK managing director at Buck, said: "The landmark High Court judgement at the end of last year on the need to equalise GMP benefits for men and women was a defining moment for the DB industry.
"An overwhelming majority of pension schemes in the UK have GMP benefits, meaning the ruling on GMP equalisation presents a significant challenge for the sector to ensure schemes fully comply with this legal requirement.
"We recognise that undertaking GMP equalisation has the potential to be a complex, costly, and time-consuming process, with some advisers quoting three years or more to resolve the issue."
It emerged in November that about a sixth of defined benefit (DB) pension schemes have put a temporary hold on pension transfers while they decide how to equalise contracting out benefits.
Earlier this month the Pensions Administration Standards Association (PASA) brought together representatives from across the industry to form a new working group to help scheme with issues arising from the ruling.
Sankar Mahalingham, head of DB growth at XPS Pensions Group, said: "We are talking to a number of pension schemes about the journey they are about to embark on equalising GMPs.
"Once trustees set off, it is a journey that will take months or even years; it is critical that trustees prepare carefully and reflect their particular circumstances. A number of schemes are considering whether conversion of benefits should form part of their strategy."
