On the go: A private members’ bill aimed at clarifying and streamlining the process of guaranteed minimum pensions conversion has received royal assent.
The bill was tabled last year by then-Scottish National party MP Margaret Ferrier, who now sits as an independent.
Besides adding clarity to and streamlining the process of GMP conversion, it was also designed to to clarify the minimum survivor’s pension required, and to remove the need to notify HM Revenue & Customs when a conversion exercise had been carried out.
Ferrier said at the time that the bill would help “to reassure occupational pension schemes that they are able to use the methodology published in [Department for Work and Pensions] guidance to level the effective differences between pension amounts paid out to men and women”.
She added: “Historical inequalities of treatment between men and women in the pensions system have long resulted in uneven amounts being paid out as GMPs in occupational pension schemes to men and women. This bill will begin to rectify these persisting issues.”
The bill received cross-party support, though pensions minister Guy Opperman saidat a debate in February that it did not amount to a significant change to legislation, and merely tweaked some technical rules around conversion, which is one of the more popular methods among trustees of achieving GMP equalisation.
More significant questions, especially around the tax implications of conversion, were not covered in the bill, and recent guidance from HMRC only confirmed what had long been an industry suspicion, that clarity on these matters will require legislation of its own.
Opperman added, however, that the consultation into “regulations coming out of the bill” was an opportunity to “remind schemes of the need to communicate clearly with their members if and when they carry out a GMP conversion exercise”.
