A group of large pension schemes are launching what they claim to be a free service communicating changes to Guaranteed Minimum Pensions. I went to find how.

There are many exciting things happening in pensions but changes to Guaranteed Minimum Pensions are not among them.

So I trotted down to Brightwell’s offices in America Square yesterday lunchtime to see why people have been confused since 1990 and whether the claims of gmpeasy that they are capable of curing my GMPe queasiness, have any validity.

What did I find? I found the result of a year’s collaboration between BA Pensions, Brightwell (representing the BT Pension Scheme), Coal Pension Trustees, Invensys Pension Scheme, M&S Pension Scheme, Royal Mail Pension Plan, Shell Contributory Pension Fund, and Unilever UK Pension Fund. It has been supported by Quietroom and Shula PR and Policy

This is what we get.

The communication toolkit, which includes a video animation, can be downloaded at www.gmpeasy.co.uk and has been developed to help schemes explain what GMPe means in a clear, simple and engaging way to their members.

The good news

• lawyers have picked over it – most schemes will want to do the legal due diligence again but it will be less expensive
• It has been member tested and results suggest members understand what is going on
• It doesn’t stop ambitious schemes mucking about with it (changing colours, fonts etc)
• It looks quite good
• It’s free, you won’t get nicked for copywrite if you cut and paste, download and embed

GMPeasy has allowed me to use their video, so here it is.

I have an action shot of the Brightwell audience watching

GMP- biscuits- getting equalised pic.twitter.com/G16Jk2dC6j

— Henry Tapper (@henryhtapper) September 19, 2023

The business of working out what part of your state pension you get paid by the state , and what part is paid by your scheme is really tricky and guaranteed minimum pensions and state pension offsets and the like all come into it. Bottom line, nothing as simple in pensions as animations make them out to me. Biscuit packs don’t fly by themselves and we can’t check out without paying ( observations I tried to make yesterday).

My idea communication would read.

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Mr Tapper, your pension just got lucky and we’re paying you another fiver a month going forwards and paying you an extra £60 this month for months we’ve missed – cheers – Zurich staff pensions.

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But we’ve got to do this “proper” so…

My old employers – First Actuarial – have always been on top of the GMP game. They have produced an excellent primer which I have re-read in advance of the meeting, so I don’t sound a GMP thicko. You can read it here.

My heart rate drops when I read this document, it should be prescribed on the NHS to reduce stress levels.

Pension people divide between those who don’t understand GMP equalisation (99%) and those that do (1%). You can tell the 1% that do – they turn up to conferences on GMP equalisation with smug smiles on their faces.

The rest of us are confused.

Google GMP and you’ll find it stands for “Good Management Practice” or is a brand of alloy wheels. So communicating GMP to a querulous pension public is a task and a half. But it’s clearly a task that occupational schemes (in conjunction with Quietroom) think worth taking on.

First Actuarial numbers suggest that GMP equalisation is likely to make rather a small difference to our pensions and won’t impact much on scheme liabilities

But in pension valuations, every basis point counts and having lived through the Lloyds GMP equalisation case, I am well aware of how much legal time has been devoted to these tiny fractions.

From a member’s point of view, GMP equalisation seems all good news

In equalising GMPs, members with GMPs built up between 17 May 1990 and 5 April 1997 may receive a small top up to their benefits. Those members receiving a pension
may also receive a back payment to compensate for past inequalities. As a result, all schemes with GMPs will see an increase in the value of their scheme liabilities.

But to get to a determination of what that top-up will be, many times the value of the top-up will have been spent in actuarial and administrative time. Believe you me, it would have been better had the GMP never been invented – let alone equalised.

So what’s new?

Yesterday’s event launched a new, free to use, GMPe communications toolkit.

They’ve   shared the content and collateral which has been kept under wraps

So now you see this blog shimmering with GMP animation and me with the smug face worn by the GMP cognoscenti