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

B.7 Deferred Pensioners – explanation of calculations at the Relevant TimeB.7.1 Typical timelineDate ofleavingRelevantTimeSchemeNPA 1SchemeNPA 2Deferred pensioners will have left the scheme before the Assessment Date. Calculationsfor deferred pensioners need to be carried out at the Relevant Time 7 (the day before theAssessment Date). Since GMP stopped accruing on 5 April 1997, as for active members,for deferred pensioners the female GMP is always expected to be the same or greater thanthat applicable to an equivalent male member.B.7.2 Equalisation of Accrual Rates using Modified Method (2)In a similar way to the argument outlined for active members above, the requirement toequalise accrual rates using Modified Method (2) for deferred pensioners may change thesplit of the pension at date of leaving the scheme between GMP and excess pension. It isnot however expected to require any increase in the member’s total Pre 97 pension at thedate of leaving the scheme. However, as the GMP and excess elements of pensiontypically receive different rates of revaluation in deferment, there may be an increase inthe Pre 97 pension as revalued to the Relevant Time.B.7.3 Statutory Minimum check NPA 60A check needs to be carried out at the Relevant Time to ensure that there is sufficient Pre97 Compensation with a NPA of 60 to cover the female Statutory Minimum that themember is entitled to from age 60.Maximum(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 lowerAll these elements of pension with appropriate revaluation will already be included in thetotal Pre 97 pension revalued to the Relevant Time following equalisation of accrual ratesusing Modified Method (2). However, depending on the history of scheme NPAs there maybe insufficient Pre 97 pension with a NPA 60 to cover the minimum required. Part of therevalued Pre 97 pension with a NPA greater than 60 may therefore need to be movedfrom the higher NPA tranche into a tranche of pension with NPA of 60 to meet theStatutory Minimum underpin at NPA 60 (see section B.5.4 for further details).7 See paragraphs 15-19 of Schedule 7 of PA2004.22