PPF: a can of worms?

Because European Law demands that pension schemes do not discriminate on grounds of sex, pension schemes in the UK must therefore offer equivalent retirement ages and benefits to male and female members.

Schemes that have historically operated different ages have had to accommodate the ruling and this needs to be taken into account when assessing benefits. Pension benefits earned before 17th May 1990 are not covered by the European legislative requirements for equal treatment and neither are the factors for commuting pension in exchange for lump sum.

In general, the issue of equalisation of GMPs has not been resolved. In January 2000, the Pensions Ombudsman made a determination in respect of the case of Mr I B Williamson vs Sedgwick Group Pension Scheme. In his determination, he stated, “the Trustee and Holding Company shall, as soon as reasonably practicable, ensure that GMPs are equalised in accordance with the equal treatment rule of section 62 of the 1995 Act”. (The Act in question is the Pensions Act 1995.)

The Trustee and Holding Company had argued that the Pensions Ombudsman did not have jurisdiction or power to deal with the complaint. In an appeal in the High Court against the decision (which only affects the Sedgwick Group Pension Scheme but may be seen as a precedent for other schemes), the presiding Judge overturned the Pensions Ombudsman’s decision in this case. However, he left open to members the option of challenging the issue of equalisation of GMPs with their scheme individually. As the Pensions Ombudsman pointed out in his summation, there are various methods of equalising GMPs, as indeed there are in equalising retirement ages.

So, with that in mind, I was interested to read this article:

Consultation into equalisation of GMPs 'misconceived' (Professional Pensions)