What GMP conversion guidance will mean for schemes

 

As we approach the Easter bank holiday weekend, thoughts turn to the long-awaited DWP GMP conversion guidance – schemes have been waiting for more information as well as an explanation. So what does this guidance actually mean for the industry? Maurice Titley, Director of Consulting at ITM predicts what will be covered…

 

We’re halfway through April now – so far this year, as an industry, we’ve managed to make our way to (but not yet through) master trust authorisation. More auditing stories have been making the headlines. We got a thumbs-up to pension dashboards – compulsion is coming and a suggested deadline of phased rollout within three to four years. We’re taking cautious steps forward with CDC and a new look at IGCs. And we’re on the cusp of the DWP GMP conversion guidance…

The guidance is expected to be published before Easter, so most likely on Thursday and it should cover how the existing GMP conversion legislation could be used to equalise GMPs. As well as explain how to equalise via conversion, we’re hoping for some practical guidance on the associated issues. But and there is a but…the Government is considering further changes to conversion legislation – so this may not necessarily be the final word, and further updates may be needed in future.

So what does this guidance actually mean for the industry?

Many schemes have been holding out for the guidance before pursuing GMP conversion. Publication of the guidance means schemes can gain some comfort that they are tackling conversion and equalisation in an appropriate way. But what do schemes need to do before conversion? Only two things really…


Sort out their data
…and do everything else at once!

You can also read the full article on the Professional Pensions website.

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