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

If it is sufficient (scenario 2), the Minimum will be:(a)(b)(c)(d)the accrued Pre 97 pension with NPA 60; plusrevaluation on the equalised GMP; plusrevaluation on the excess of scale pension payable at 60 over the equalisedGMP (at the higher of the rates payable under the scheme rules and statute);plusthe later earnings addition (if applicable).The “later earnings addition 5 ” is an additional element that can apply to members wherethe date the member ceased contracted-out service is before the date that they actuallyleft the scheme. It applies to very few members/schemes and so is not considered furtherin this document. Schemes in a PPF assessment period should contact their SchemeDelivery Associate if their scheme is affected by the “later earning addition”.The 2 components of this test relate to: the contracting out requirements; and the anti- franking and preservation requirements.The January 2011 consultation (sections 4.5.6 – 4.5.8) provided further details. From apractical perspective it is recognised that it may be simpler to calculate both the scenarioswith the maximum then being used. As this approach will give the same uplift, allcalculations for deferred pensioners in section C therefore illustrate the calculation of bothelements using the following simplified Statutory Minimum.Simplified Statutory Minimum TestMaximum(1) “all female GMP” with revaluation on the GMP; and(2) accrued Pre 97 pension with NPA 60+ GMP revaluation on “all female GMP”+ revaluation on the “revised excess pension” with NPA 60 or lowerwhere:“all female GMP” for a female member is the female GMP accrued in the period 6 April1978 – 5 April 1997. For a man this is the equivalent female GMP that the man wouldhave accrued in the period 17 May 1990 – 5 April 1997 if he had been a female. It isrevalued using the method of revaluation of GMPs applicable to the scheme at the datethat the member ceased contracted-out service under the scheme.The “revised excess pension” is any Pre 97 Pension remaining which is payable at 60 afterdeducting “all female GMP” from the “accrued Pre 97 pension with NPA 60”.Revaluation on the “revised excess pension” is revaluation as set out in the scheme rules(subject to this meeting the statutory minimum requirements).A check is made at the Relevant Time only as to whether or not the Statutory Minimum iscovered by the pension payable at 60 after allowance for GMP. If that pension is already5 See s90 of the Pension Schemes Act 199318