The Pensions Ombudsman has dismissed a complaint by a member regarding the time taken to effect GMP equalisation. However, the Ombudsman awarded the member £500 for distress and inconvenience relating to the trustee's failure to keep the member updated on progress despite agreeing to do so. This is a noteworthy determination for scheme trustees grappling with GMP equalisation exercises, as it gives an indication of how the Pensions Ombudsman is likely to approach member complaints, particularly in relation to the time the exercise is taking and/or gaps in scheme records.
Ombudsman finds GMP equalisation not unreasonably delayed
The Pensions Ombudsman has dismissed a complaint by a member regarding the time taken to effect GMP equalisation. However, the Ombudsman awarded the member £500 for distress and inconvenience relating to the trustee's failure to keep the member updated on progress despite agreeing to do so (CAS-71351-P8X2).
The member, Mr N, had accrued GMP in the scheme, but had taken a transfer out in April 1991. In 2018 the High Court held that trustees have an obligation to equalise benefits in respect of GMPs. In November 2020 it held that trustees are in principle required to top up a cash equivalent transfer value in order to effect equalisation. In December 2020 Mr N e-mailed the scheme's pensions manager asking for details of his GMP calculation at the time he transferred out of the scheme and the calculation based on the High Court ruling. In February 2021 the scheme administrator responded saying that the Trustee would be considering the court ruling across the scheme membership as a whole and that consequently this process could take many months. The scheme administrator asked Mr N to send a copy of the leaver statement issued when he left the scheme, as it did not hold this information.
Following further e-mail exchanges, in May 2021 Mr N brought a complaint under the scheme's internal dispute resolution procedure (IDRP) complaining about a lack of meaningful information and a credible plan from the trustee about how it intended to deal with the GMP calculation, and also complaining about the "lost" historical pension records. The IDRP complaint was not upheld and Mr N brought a complaint to the Pensions Ombudsman.
The Trustee said that, as at 2023, it had formed a GMP equalisation working group and that a detailed data review had taken place since the IDRP had completed. It anticipated member records, including past transfers, being reviewed and updated in the second half of 2023. It believed the scheme was in a similar place to the majority of pension schemes having to address GMP equalisation issues. It said that it was not uncommon for member records to be more limited when a member had transferred out. The Trustee said it would continue to update Mr N with the progress of the GMP equalisation project during the course of 2023 and would then engage directly with him in order to assess any level of tup-up payment that might be due.
The Ombudsman's decision
The Ombudsman gave his determination in January 2025. He acknowledged that the GMP equalisation exercise was a difficult and complicated project, and found that as at the point of his determination the GMP equalisation exercise had not been unreasonably delayed. However, having agreed to keep Mr N updated on the progress of the exercise, the Trustee had not done so. The Ombudsman therefore awarded Mr N £500 for distress and inconvenience.
Our thoughts
This is a pragmatic determination from the Ombudsman which acknowledges the complexity of GMP equalisation exercises, and that it is not uncommon for a scheme to hold limited data in respect of a member who transferred out many years previously. However, the distress and inconvenience award is a reminder that trustees should keep to any commitment to keep members informed.
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