Analysis of preliminary actions taken or being considered by our clients shows the majority:
Analysis of Mercer client discussions shows that:
Financial impact of equalisation
Given the increase in benefits that is due to members following the requirement to equalise GMPs, it has been necessary to include the additional cost of these benefits in pension accounting figures. For around 80% of schemes, the impact of implementing GMP equalisation is likely to be relatively small, equating to less than 1% of the schemes’ total liabilities. Nevertheless, for around 20% of schemes the impact is likely to be larger and, for a small proportion, the increase in liability is likely to be in excess of 3% of the scheme’s liabilities. The outcome for any scheme is dependent on scheme specific factors including the retirement age, the pension increases and the split of scheme members between males and females.
Whilst the scheme level impact may be small, the impact may be much more significant at the member level.