Accounting for guaranteed minimum pensions (GMP) equalisation

The Pensions Research Accountant Group (PRAG) has published guidance on accounting for guaranteed minimum pensions (GMPs) equalisation in pension scheme accounts. Kevin Clark, chair of the PRAG SORP Working Party, examines the key issues for trustees

The High Court judgment of 26 October 2018 on the equalisation of guaranteed minimum pensions (GMPs) for the Lloyds Banking Group has received a lot of attention in respect of scheme administration and funding implications for defined benefit pension schemes. Trustees also need to consider whether there are implications for scheme financial reporting in respect of any back payments due on benefits that have been underpaid in the past (in the light of the GMP equalisation judgment).

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