Pension equality Court ruling sees some valuations & transfers put on hold
5 November 2018
Royal London has called for the government and regulators to work together to clear up confusion surrounding the recent landmark Lloyds Bank case which ruled that the bank must equalize its guaranteed minimum pensions (GMPs) for men and women.
The High Court ruled that the Lloyds Bank pension scheme was wrong to have paid some of its final pension scheme members less than others and it must now pay members the money they missed out on.
This sets a precedent for other pension schemes who will be looking at their own arrangements.
Primarily, the ruling means that workers who were building up GMPs in their company pension schemes between 1990 and 1997 could have their pensions increased to deal with any inequalities between men and women.
However, the details surrounding how and when this should be done and whether people who have already transferred out could be affected were not clear from the ruling.
Following the ruling, some pension schemes and administrators have expressed concern that they should not process transfers until equalization has taken place and some have even put temporary holds on transfers.
Steve Webb, director of policy at Royal London, said: “The recent Lloyds case has made clear that pension schemes need to tackle inequalities in their schemes, but many questions remain unanswered. It is vital that pension savers who are considering a transfer out are not left in limbo while the industry works out what exactly this ruling means.”
According to Webb, unless the Department for Work and Pensions, the FCA and the Pensions Regulator act quickly, this could leave many people unable to go ahead with a transfer until matters are resolved.
“The pensions industry and pension savers urgently need to hear from the authorities what they should do now with regard to pension scheme valuations and pension transfers. With some pension transfers already on hold, a public statement is urgently needed,” Webb added.
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