Response to consultation on contracting out legislation and GMP conversion method
The PLSA responds to the DWP’s consultation regarding changes to contracting out legislation.
There are two substantive changes introduced in the consultation, the most important of which is the introduction of a method for equalising Guaranteed Minimum Pensions (“GMPs”) by converting them to scheme pension. PLSA was an active member of the working group that developed the methodology and believes that it will be useful for those schemes that wish to equalise GMPs.
The second substantive change is a change to contracting out regulations that would make it even more difficult than it is currently to amend schemes that contain contracted out benefits earned after April 1997. PLSA opposes this change as drafted.