Defined Benefit  

Majority of schemes include GMPs in transfer values

Majority of schemes include GMPs in transfer values

Some 95 per cent of pension scheme clients of JLT Employee Benefits have started to include guaranteed minimum pension equalisation in their transfer values.

FTAdviser reported earlier this month that JLT was one of the first administrators to allow its clients to amend the basis of their transfer value, after introducing the option earlier in March. 

Many schemes had halted the transfer process at the end of 2018 after a landmark ruling on guaranteed minimum pensions last summer in which the High Court ruled trustees must equalise benefits between women and men who have GMPs because of contracted out benefits.

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Due to the ruling final salary scheme members who contracted out are set to receive millions of pounds in back payments and pension schemes and administrators were concerned they shouldn’t process transfers until equalisation has taken place.

JLT stated it is doing these calculations on a member by member basis, including individual specific adjustments.

This service has been made available to more than 700 pension schemes and so far 95 per cent of JLT’s clients have moved to the new equalised basis.

According to James Auty, head of trustee consulting for JLT Employee Benefits, the company offered this option to clients to "ensure a better experience for members and those advising them, making it much easier when a member gets financial advice on their transfer value".

He added: "JLT has also been speaking to the leading firms of independent financial advisers on the additional information they need to ensure that transfers embracing GMP equalisation can progress quickly and efficiently."