Statement on Equalisation for GMPs AND the application of a ...

Pensioner examplesThese calculations assume that:1. pensioners have taken all their benefits from a single date of retirement;2. the scheme has taken into consideration the appropriate legislation applicable to themembers true sex in calculating pensioner benefits; and3. the scheme calculates early and late retirement pensions by applying a set ofactuarial factors to the members pension dependant on their age on retirement (asset out in section C.3).These calculations do not take into consideration any pension the member commuted onretirement. We are looking at the differences in the amounts payable to the member and anequivalent member of the opposite sex. As no further pension can be commuted this will notaffect the difference between these figures.As described in Part B.8 where a pensioner has taken early or late retirement from thescheme, as required by the preservation legislation, it is assumed that these benefits havebeen calculated taking into consideration the benefits the member would have been entitledto from NPA. Due to the different NPAs that apply to different elements of pension accruedduring the period 17/5/1990 – 5/4/1997 it is likely that members may have taken eitherearly or late retirement for at least part of their pension accrued during this period.Equalisation for GMPs and the application of the Statutory Minimum for pensioners thereforerequires separate calculations for tranches of pension with different NPAs since differenttreatment will have been applied by the scheme to pension accrued in different serviceperiods. For example a member retiring from a scheme at age 62 may have taken earlyretirement for the NPA 65 tranche of pension but late retirement for the NPA 60 tranche ofpension. This member will require 2 separate calculations using Form 3(a):1. a calculation for the NPA 60 tranche from which the member has taken lateretirement; and2. a separate calculation for the NPA 65 tranche where the member has taken earlyretirement.This scenario is illustrated in example 5 below.The adjustment to Pre 97 PPF compensation for pensioners at the Relevant Time requiresa separate calculation to be carried out for each NPA applicable to a member during theperiod 17/5/1990-5/4/1997.Examples 1-4 below consider the main scenarios that are expected to apply to differenttranches of pension for pensioners who have pension in excess of GMP. Example 5 thenillustrates how calculations for a member with 2 different NPAs in the period 17/5/1990-5/4/1997 should be carried out.Example 1 - Early retirement from the scheme;Example 2 - Late retirement from the scheme;Example 3 - Normal retirement from a scheme with NPA 60;Example 4 - Normal retirement from a scheme with NPA 65; and106