Q&As
If you have a question that’s not answered here, please contact us.
What does ‘overall actuarial value’ mean?
The overall actuarial value of your pension means what your pension is worth in total in today’s value, as calculated by an actuary. It is worked out using assumptions on factors like inflation and mortality rates.
When we say the overall actuarial value of your pension will stay the same, this means that if benefits change, the actuary can adjust them so your pension’s value stays the same.
How does this GMP exercise affect the pension I receive?
For most members of the Plan, elements of their Plan pension might change, but the overall actuarial value of the pension you receive will not change. However, some members might see a small change.
We plan to convert any GMP you have into non-GMP pension. That means it will stop being GMP and will be treated just like the rest of your pension.
We are proposing as part of the conversion process that benefits that built up alongside the GMPs between 6 April 1978 and 5 April 1997 will also be adjusted.
We will send you a personal statement that shows you precisely how the different parts of your pension have changed.
Are you allowed to change my pension?
Pensions law allows us (as the Trustee of the Plan) to change the Plan’s benefits in this way. As the changes affect pensions that have already been built up, there are a number of steps that we need to take first.
These steps include getting EY’s consent, and taking professional advice. We have done both those things. Now, we must consult all affected members and beneficiaries of the Plan.
Will a back payment affect my tax?
If you are getting a member’s or dependant’s pension and our checks show you have been underpaid, you will receive a back payment as a lump sum. This lump sum will be taxable as income and will be paid via the pensioner payroll (PAYE).
You can apply to HMRC to have the tax spread over the relevant tax years in which the underpayment built up. This might help to reduce the total tax you pay on the back payment. We can give you a breakdown of the underpaid amount by tax year, to help you with this.
I am not yet taking my pension – will conversion affect my pension increases before retirement?
Even though we’re changing how increases are calculated, the value of the pension should stay the same due to conversion.
Certain elements of your pension are increased between your employment leaving date (which is when you stop building up pension in the Plan) and the date you start taking your pension. GMP and non-GMP increase at different rates.
We’re planning to change how the increases to GMP are worked out. The new way will match the rate used for the rest of your pension.
What happens if I retire between now and when pensions are updated?
When you start taking your pension, we will tell you how we’ll work out your benefits and whether there will be any future changes to your pension due to GMP.
I left the Plan before 17 May 1990 – how will these changes impact me?
GMP that was built up before 17 May 1990 is not affected by the ruling on making benefits equal between men and women.
However, we plan to convert all GMP in the Plan into non-GMP. So, any GMP you earned before 1990 will be changed as part of this exercise.
I took a Pension Increase Exchange (PIE) offer in 2021. Will this affect me differently?
It could affect whether or not you get an increase and a back payment, or how much you get.
If you took a PIE offer in 2021, you chose to get a higher pension at the time by giving up some future increases on your non-GMP pension.
That change didn’t affect your GMP. So, like other members, we will check your GMP and see if you would have built up more if you had been the opposite sex.
However, the increases you’ve had on your non-GMP pension since 2021 could affect any increase or back payment you are due as part of this exercise.
I am an ex-MPS member and my benefits changed in a recent benefit conversion exercise. Why are they changing again?
We decided to run this GMP exercise separately from the benefit conversion exercise run in 2023/2024 because it was too complex to do at the same time. That exercise involved converting Defined Contribution (DC) benefits to Defined Benefit (DB) benefits. For most members, the two exercises relate to different parts of your pension, that you built up in different years.
For most members, the benefit conversion exercise affected benefits built up after 5 April 1997, including ‘reference scheme test’ (RST) benefits. These RST benefits are calculated in the same way for men and women and so do not need to go through the GMP exercise.
A small group of these members (MPP 1990) had a GMP element attached to their DC pension. These members still need to have their benefits checked to ensure that men and women are being treated equally. This will be done as part of this GMP exercise.