We’ve prepared the following Q&As to answer any queries you may have about the change to your pension.
We’ve grouped questions and answers into categories. Simply click on the question to show the answer.
If you have specific question not answered below, you should contact the Pension Team.
Your pension is made up of different parts, based on when it built up. Guaranteed Minimum Pension (GMP) may be one part.
It’s linked to when there were two parts to the State Pension arrangement – the Basic State Pension and the State Earnings-Related Pension Scheme (SERPS, which later became the State Second Pension).
Workplace pension schemes like the Fund had the option to ‘contract out’ of the State Second Pension. This resulted in National Insurance savings for both the employer and its members, and most pension schemes like ours took advantage of this option.
In exchange, the pension scheme had to pay members a pension which was at least as much as a minimum pension. This minimum pension was calculated and increased in line with legal requirements and is known as GMP.
GMP was earned between 6 April 1978 and 5 April 1997, so if you were building up benefits in the Fund during this time, your pension comprises GMP and ‘excess’ (pension built up in the Fund which exceeds GMP).
GMPs are different for most men and women, chiefly because the State Pension Age used to be different for men and women. As a result, men and women built up GMPs at different rates and GMPs are payable at different dates. This led to the historic inequality which the High Court has ruled must be addressed – but only in respect of GMP built up after 17 May 1990. (This is the date on which the European Court of Justice decided that the right to equal pay for men and women applied to occupational pension schemes.)
Your GMP age is the age you can start to receive GMP. It’s 65 for men and 60 for women. GMP age used to be linked to State Pension age but is no longer linked to it.
Your GMP age may be different from your State Pension age.
For more about this and a State Pension age calculator, go to the Gov.uk website.
There are one or, for some members, two reasons for this.
The Trustee has checked the Fund’s Guaranteed Minimum Pension (GMP) records against the GMP data held by HMRC. If there’s a difference between the two, we may adjust benefits. Most UK pension schemes are doing this as it’s regarded as ‘best practice’.
The purpose of this GMP data assessment is to ensure all members’ benefits have been calculated and paid correctly. In some cases, where there have been historic overpayments, the assessment could result in a small reduction in your benefits. However, where this is the case, any such reduction could be offset by any increase that results from addressing the historic GMP inequality.
If your pension is affected by the GMP data assessment, this is shown in your pension statement.
See the ‘GMP data assessment’ Q&As for more detail.
Separate to the outcome of the GMP data assessment, your pension might change because we need to address an inequality relating to some historic benefits in the Fund. This relates to GMP, though it’s unrelated to the GMP data assessment.
See the ‘Addressing the historic inequality’ Q&As for more detail.
No, only benefits in the Retirement Account are affected by the GMP matters we refer to on this website.
If you have more than one pension from the Fund, you’ll receive separate letters about each pension to which the GMP issues apply.
In the unlikely event that the Company became insolvent, the Pension Protection Fund (PPF) may take over the Fund and pay benefits to members.
There are limits on the amounts paid and this scenario wouldn’t give exactly the same benefits as those provided by the Fund. In particular, the level of increases provided on pensions may be lower than those under the Fund. You can read more details at www.pensionprotectionfund.org.uk.
In certain circumstances, the PPF may seek to undo changes to members’ benefits in the last three years before it takes over responsibility for a scheme if those changes increased the PPF’s liabilities. In these circumstances, any uplift you receive to your pension on taking the PIE option may not be guaranteed.
Note that there is currently no expectation that the Company will become insolvent or the Fund will enter the PPF.
The Pensions Regulator is the UK supervisory body for occupational pension schemes. The Regulator is responsible for monitoring the running of occupational pension schemes to ensure the protection of members’ benefits.
You can visit the Pensions Regulator’s website at www.thepensionsregulator.gov.uk.
Please contact the Pensions Team at Willis Towers Watson in the first instance.
The pension figures in your statement are based on your pension as at 1 November 2024 allowing for any 1 November 2024 pension increase.
No, your Basic state pension will not be affected.
Any death benefits due will be calculated based on your corrected entitlement and in line with Fund rules.
Having considered matters carefully and worked closely with the Fund’s advisers, we’re addressing the historic GMP inequality using the default method prescribed in the High Court ruling.
In broad terms, this means that we’re applying an uplift to any member whose benefits are lower than they would have been had they been of the opposite sex, and reimbursing members who’ve lost out in the past with a one-off payment.
Not everyone is affected, so only some members will receive an uplift to their pension and/or a one-off lump sum, both of which are typically expected to be quite small.
For example, if you built up GMP in the Fund only before 17 May 1990, any GMP inequality doesn’t need to be addressed. (See the question ‘What is GMP?’ above.)
Alternatively, some members may have built up GMP after 17 May 1990, but haven’t been disadvantaged by this.
We are legally required to confirm any change to your pension – however small – as a result of GMP equalisation and GMP conversion.
Your new pension is smaller than your current Fund pension because the separate GMP data assessment, completed by the Trustee, has shown that the amount of Fund pension you’ve been receiving is higher than the pension you’re entitled to under the Fund rules.
In other words, the Trustee has identified that, in your case, the Fund’s GMP record doesn’t match HMRC’s GMP record.
There are a number of reasons why GMP records might not match – see the question ‘Why are some pension schemes’ GMP records different from HMRC’s?’
Going forward, the Trustee is legally obliged to pay the correct benefits you’re actually entitled to under the Fund rules.
Having fulfilled the requirement to address the historic GMP inequality as required by the High Court ruling, we’re carrying out a one-off calculation and converting the whole of the GMP (not just that part of it built up after 17 May 1990) for all members into a different form of pension.
Converting GMP into a different form of pension will:
In all cases, the current amount and expected value of your pension over your lifetime won’t be reduced as a result of GMP conversion.
We’re making as small a change to benefits as possible.
For all pension built up between 6 April 1978 and 5 April 1997, we’re removing any adjustments relating to GMP which may otherwise have occurred at age 60 for women or 65 for men (impacting only those members currently below age 65).
Until now, your pension built up between 6 April 1978 and 5 April 1997 has been made up of a combination of GMP and excess. The pension increases on each pension element remain unchanged, but the split of GMP and excess may change to meet applicable legislation. This means that future increases to the total annual amount of Fund pension may be different.
Our method for GMP conversion affects different sections of the Fund in different ways. Please refer to your pension statement for full details of how our method for GMP conversion impacts your pension.
In all cases, the current amount and expected value of your pension over your lifetime won’t be reduced as a result of GMP conversion.
Converting GMPs allows us to simplify the Fund’s future administration.
In addition, it means that the part of your pension which would have been GMP will no longer have to comply with the legal restrictions which apply to GMP, so your benefits will be simplified.
Yes, pensions law does allow the Trustee to change the Fund’s benefits in this way. However, certain steps needed to be taken first, given that the change affects benefits that have already been built up.
We’ve taken legal and actuarial advice and are following guidance from the Department for Work and Pensions. We consulted with all affected members of the Fund.
The Company has also agreed to and is supportive of the changes.
All members with GMP in the Fund are affected by GMP conversion.
In all cases, the current amount and expected value of your pension over your lifetime won’t be reduced as a result of GMP conversion.
By law, the Trustee must pay only the amount of pension the Fund rules say should be paid. This means we need to check that each member is receiving the correct amount of pension, including GMP.
HM Revenue & Customs (HMRC) want to check that their records of people’s GMPs match those of pension schemes paying GMPs.
If a scheme’s GMP records don’t match those of HMRC, in appropriate circumstances the scheme’s GMP records will be corrected so that they do match. This is known as ‘GMP reconciliation’, which we’re referring to as a GMP data assessment.
The Fund has to treat GMP differently from other parts of the pension, so changes in GMP records will result in changes to the pension you receive from the Fund.
It’s not a legal requirement but most UK pension schemes are doing this as it’s regarded as ‘best practice’.
Most pension scheme records broadly match those of HMRC. Possible reasons for larger differences could include:
No, only some members are affected.
If your pension is affected, this is shown in your pension statement.
If you’d like advice about your pension or tax position, you should speak with an authorised and regulated independent financial adviser (IFA).
If you don’t have an appointed IFA, you can find a helpful guide on the MoneyHelper website.
Neither the Trustee, Company nor anyone involved with the Fund can give you financial advice.
Any back-payment in respect of past underpayments may push you into a different tax band.
If this is the case, you can apply to HM Revenue & Customs to spread the tax liability over the relevant prior years to which the back-payment relates.
If you believe that this issue affects you, contact Willis Towers Watson, the Fund administrators, and ask for a tax-year breakdown statement. Then contact HM Revenue & Customs to see if you’re due a refund on your tax.
The changes we’ve made were designed so as to minimise any tax implications. However, you may need to consider your tax situation if, for example:
Your pension is taxed as earned income so any increase to your pension may push you into a different tax band.
Similarly, any back-payment in respect of past underpayments may push you into a different tax band.
It’s possible that, if you’re receiving a one-off additional back-payment, you could move into the next tax band for the current tax year. This may result in you paying more tax than if you’d received the higher pension amounts in the tax years they were originally due.
If you believe you’re impacted by this, you can request a tax-year breakdown statement from Willis Towers Watson, the Fund administrator. Then contact HM Revenue & Customs to see if you’re due a refund on your tax.
If you are unsure of your tax position, consider taking independent financial advice.
The Lifetime Allowance was, broadly, a limit on the total amount of pension benefit that an individual can receive in their lifetime from all pension schemes (whether lump sums or retirement income) without triggering an extra tax charge known as the Lifetime Allowance Charge.
The Lifetime Allowance was abolished from April 2024. This means there will no longer be any Lifetime Allowance implications arising from simplifying your pension.
However, at the time you retired your pension may have been tested against the Lifetime Allowance.
As part of addressing the historic inequality (and the separate GMP data assessment if applicable) we have revisited that test.
Your pension statement confirms whether there has been any change to your tax position against the Lifetime Allowance (unless you’re receiving a dependant’s pension, in which case, this isn’t relevant to you).
You can read more about the Lifetime Allowance and the different forms of protection on the HMRC website: www.gov.uk/guidance/pension-schemes-protect-your-lifetime-allowance
If you think you may be affected by the Lifetime Allowance, please contact the Pensions Team at Willis Towers Watson so we can review and consider your individual circumstances.
If any of the figures in your statement appear incorrect, please contact the Fund administrators, Willis Towers Watson, so that this can be investigated. If necessary, we’ll issue you with a revised statement.
All figures in your statement are for information only and do not constitute a proof of, or give rise to, any entitlement.
All benefits must be calculated and paid in line with the Fund Rules and legislation and are reviewed before they are paid. The Fund’s Rules and legislation over-ride anything in our correspondance and associated documents.