Author: Fiona Guild
It has now been seven years since the landmark Lloyds judgment brought Guaranteed Minimum Pension (GMP) equalisation firmly to the forefront of the pensions industry. During this period, Fiona Guild, senior consulting actuary at Gallagher, has worked closely with colleagues across Gallagher UK and, more recently, First Actuarial. Her work has spanned technical calculations, operational planning and the practical delivery of equalisation projects, giving her a clear view of the challenges schemes continue to face.
Drawing on this experience, Fiona has highlighted seven themes that consistently emerge across GMP exercises.
1. The operational pressure on administrators cannot be overstated
GMP projects have highlighted, more clearly than ever, the sheer volume of work placed on administration teams. Administrators are responsible for providing extensive historical data, answering questions about past administrative practices, interpreting legacy records and implementing the final equalisation outcomes. They must do all this while still maintaining their usual business service standards.
Their involvement is central to every successful project, and this period has underlined how important it is to have strong, well-supported administration teams in place throughout a GMP exercise. Gallagher 's administration teams continue to see this firsthand and play a key role in helping schemes navigate these pressures without losing momentum.
2. Data quality varies significantly, both within schemes and between them
GMP projects have provided a unique lens on the depth and consistency of pension scheme data. One consistent finding is the variation in quality across different data types. Transfer-in records and part-time histories are often incomplete or inconsistent, whereas GMP data itself is usually stronger than expected. This means that the proportion of members needing rectification against HMRC data is typically relatively small.
A key part of GMP work is therefore helping trustees focus their time and resources on the data issues that genuinely affect outcomes, while taking pragmatic, proportionate approaches to other gaps so projects remain on track even where data is less than perfect.
3. Method B continues to emerge as a pragmatic and widely adopted solution
Although several methodologies are available, Method B has consistently become the preferred choice for many trustees and sponsors. Fiona 's experience reflects why this is the case. Method B offers clarity, operational simplicity and a straightforward structure that makes it easier for schemes to implement and explain.
In an area where technical nuance can be extensive, Method B 's balance of fairness and practicality has made it a reliable and widely supported approach.
4. Effective communication does not need to be elaborate
Early industry expectations suggested that GMP communications might require digital hubs, microsites or member seminars. In reality, most schemes have found that clear, well-structured and personalised letters offer members exactly what they need. They provide clarity without overwhelming detail and allow members to understand the adjustments made to their schemes.
While there are cases warranting more bespoke communication, these are exceptions. This reflects the experience of Gallagher 's communications specialists, who have seen that thoughtful content and clear language are often more effective than producing complex or heavily designed materials.
5. Anti-franking continues to play a main role for some members
Although anti-franking legislation appears straightforward on the surface, its practical application can create disproportionate complexity in calculations. It is also responsible for many of the more substantial back payments seen in GMP equalisation projects.
This remains a clear example of how historic legislation can have unexpected long-term effects on member outcomes. It also highlights why schemes benefit from dedicated actuarial and project support in this specific area, given the technical nature.
6. Past member calculations often yield limited financial outcomes
Many schemes apply de minimis thresholds for past members, recognising the administrative difficulty and costs involved in settling payments for these members.
Although the application of de minimis thresholds can seem counterintuitive given the calculations have been completed, it reflects a proportionate and sensible approach to governance. Fiona 's experience mirrors what many schemes have found: the practical value of focusing resources where they genuinely make a difference.
7. Professional project management adds substantial value
One of the strongest operational lessons from the past seven years has been the impact of dedicated project management. Effective project managers coordinate timelines, anticipate risks, manage dependencies and maintain delivery discipline. This enables both administrators and actuarial teams to concentrate fully on the technical aspects of the work.
In environments that involve multiple stakeholders, the presence of strong project management has proved indispensable in keeping GMP exercises on track and ensuring that all parties move forward with clarity and confidence.
Looking ahead
The industry has made remarkable progress since 2018. The collective experience across administration, actuarial work, project management and member communications means schemes now have a clearer roadmap and a far stronger toolkit.
While it is impossible to say with certainty whether every scenario has now been encountered, the collective knowledge, experience and tools built over the past seven years place schemes in a strong position for whatever comes next.
To discuss how our actuarial, administration or communications teams can support your scheme 's GMP journey, please get in touch with us or reach out to Fiona directly.
