Sackers checklist – GMP equalisation: The conversion process – the questions trustees need to ask – April 2022

Back in 2018, Mr Justice Morgan held in Lloyds No.1 that schemes are under a duty to equalise for the effect of GMPs. Two years later, with Mr Justice Morgan once again at the helm, the High Court concluded in Lloyds No.3 that, in certain cases, trustees owe a duty to make a transfer payment reflecting the member’s right to equalised benefits.

One of the key takeaways from Lloyds No.1 is that there were several ways in which equalisation can be achieved, one of which is by using the statutory facility to convert GMPs into ordinary DB benefits This checklist, the third and final in a short series, focuses on the key questions to be addressed where the trustees and employer have chosen to adopt this route, or are considering doing so.

For a working copy of this document, please get in touch with your usual Sackers contact. For more information on what is unequal about GMPs, and the journey from Barber to Lloyds, please see our website.

In this checklist we cover the following areas:

  • GMP conversion – an overview
  • Planning the project
  • Consulting and notifying beneficiaries
  • Conversion options and key decisions
  • Pensions tax
  • Documenting the process
  • Appendix – defined terms and links to relevant guidance