We have been actively working in the field of Guaranteed Minimum Pension reconciliation (GMP) since 2002.
Over the last decade, we have worked closely with HMRC to develop the processes that now underpin GMP exercises, and have successfully completed over 150 reconciliations on behalf of clients.
Our methodology and process fully address the complicated cessation of the contracted-out benefits and the impact on both historical and future benefit payments.
Completing the GMP reconciliation ensures that your scheme is better positioned to take advantage of a number of exercises beyond simply having correct benefits.
These could include de-risking exercises such as buy-ins, buy-outs and longevity swaps and would be a pre-requisite if considering wind-up. In addition to this, GMP equalisation can also be managed effectively when the regulations are finalised.
Once the reconciliation process has been completed, trustees can feel reassured that discrepancies have been eliminated, contracted-out membership has been agreed and the correct benefits are being paid to pensioners.
Transfer values will correctly reflect the benefits due and asset/liability modelling will be as accurate as possible.
71% of pension managers see the GMP reconciliation as a key administration challenge for 2016.
85% of large schemes (above £500 million) see the GMP reconciliation as a key administration challenge for 2016.
We follow a three stage approach to reconciling scheme data, which allows for better project management and greater clarity of cost.
As independent chair of a number of pension schemes administered by Capita, I was relieved to know that the burden of GMP reconciliation was lifted from my shoulders with a tried and tested solution that offered the best combination of price and performance. I am happy to commend Capita for their excellent, friendly, effective and cost efficient service.