GMP equalisation explained

On 26 October 2018, the High Court made a landmark judgment confirming that pension schemes were required to equalise male and female members’ benefits for the effect of guaranteed minimum pensions (GMPs).


Trustees therefore have to decide how to equalise members’ benefits and may also need to agree their approach with the Company. In most cases, the benefit adjustments will be quite small – but there could be significant individual exceptions. Some schemes will also want to combine their GMP equalisation project with the rectification of GMP following reconciliation with HMRC records.


Building on our experience of working on these projects since the original judgment, Mercer’s approach to GMP equalisation is designed to put people first and ensure that projects are executed in a way that is simple, agile and tracked for our clients and pension scheme members.


We offer a wide variety of services covering all aspects from data checks, and strategy, through calculations to communications and implementation, and can support GMP projects whether we are the current administrator, Scheme Actuary or neither.

Listen to our specialist Sam Marshall explain GMP equalisation

  • GMP – a simple, agile & tracked approach

    The calculations involved in a GMP project can be complex, often include multiple stages and involve lots of data manipulation. This means a project can run for over a year, and trustees are finding that their advisors simply don't have enough resources to implement GMP rectification and equalisation for their scheme.


    Most importantly, the longer a scheme goes without solving this challenge, the longer any members affected by GMP rectification and equalisation will go without receiving the benefits that they're owed. Secondly, most advisors are storing the data and completing the calculations on Excel spreadsheets, that's clearly a risk in itself. It also makes it harder to keep a robust audit trail of the work that's been carried out.


    Finally, because benefits are not static, whether we think about annual pension increases or the death of a member, for example, trustees can spend time and fees just keeping track of data and potentially solving problems that won't have a material impact on their members’ benefits.


    Trustees will want to work with their advisors to address GMP rectification and equalisation as soon as possible and mitigate the risks the scheme faces, where lack of capacity or timescales are concerned, it's also worth remembering that a GMP project doesn't have to be carried out by their existing advisors. For example, while our own unique data management platform links with our administration systems to track data changes throughout and deliver projects in a simple and agile way, it also allows us to carry out GMP rectification and equalisation projects for schemes where we're neither the administrator nor the scheme actuary. You can find out more about our approach to GMP rectification and equalisation on our website.



Our approach to GMP Equalisation - Simple, Agile, Tracked


  • Promoting pragmatism and reducing the number of Trustee decisions is fundamental to our approach. We understand the important decisions and we deliver advice and support to our clients that focuses on these key decisions. We make clear recommendations based on our understanding of each client’s objectives and our knowledge each scheme.
  • Standardising our calculations and documentation where possible makes the process simpler for everyone, focusing on the areas relevant to each scheme and material to member outcomes.


  • We prepare the data and run preliminary rectification and equalisation calculations towards the start of the project. This gives our clients early insight on the impact of GMP equalisation for a scheme, allowing decisions to be made in the context of member outcomes.
  • Using the results of the preliminary calculations, we focus on the data gaps and any areas of uncertainty that are relevant to each specific member, reducing the amount of data cleansing required and leading to a faster and more cost efficient delivery.
  • Our specialist GMP Projects Team works with you throughout the project, minimising the reliance on the business as usual administration team.


  • Our Data Management Platform provides a robust audit trail by recording all data changes and any assumptions made to fill data gaps.
data management platform

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We are delighted Mercer has chosen to work with Intellica to support their clients with GMP Rectification and GMP Equalisation. Through close collaboration, Intellica and Mercer have utilised their extensive expertise and experience to develop an intelligent software solution, tailored for this data challenge. This solution provides an exciting approach to the GMP data challenge, enabling an end-to-end solution for GMP rectification and equalisation.
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Brendan Doherty, Intellica CEO

Mercer’s approach to GMP rectification and equalisation

  • GMP – rectification and equalisation - Video transcript

    GMP rectification and equalisation projects aren’t straight forward.


    They involve complex calculations, multiple stages, vast amounts of data manipulation and can take over a year to complete.


    So when you start your GMP project, you want to know that it will be carried out in a simple, agile, and safe way.


    We start, like most advisers, by helping you agree your strategy and ensuring it fits with your scheme’s wider objectives. But when it comes to data analysis, we have a more pragmatic approach than most.


    That is because, to understand what data is important, you need to bear in mind three things:

    In most cases there could be little or no impact when you look at the overall change in benefit

    Most GMP calculations can be done with a small number of data points

    Even if you go digging for historical data, it may not be available


    So rather than assessing data gaps at the outset, we review how many members you have the data points for that are really required. If enough members have them, we’ll run preliminary calculations there and then.


    This means when we provide bespoke advice for your scheme, most of the calculation work is already complete, so you’ll only need to make decisions or look for data on the small proportion of members where it really matters, and you’ll know the likely impact.


    Once we’ve finalised the historic calculations, we’ll support you with the administration of future benefits, including communicating the results to your members and implementing the new processes.


    In addition to our more pragmatic approach, what makes us stand out from other advisers is that every step of your GMP journey is documented within our bespoke Data Management Platform. This removes the obvious risks from storing data on spreadsheets and gives an audit trail of every assumption or change to benefit at an individual member level. It also provides the output for your communications, ensuring the template used reflects the member’s circumstances and your decisions.


    Our approach to your GMP Rectification and Equalisation project - simple, agile and safe


  • Agree strategy and Objectives

    Agree strategy and objectives

    We support clients in making their key strategic decisions by providing:

    • Education on the decisions that need to be made;
    • Clear recommendations based on feedback.

    Some strategy decisions will be made through the course of the project, but at the outset, it is important to reflect the long term planning for the scheme, as well as agreeing key project milestones. Throughout the process, we log your strategic decisions in a living document.

  • Understanding what data is important

    Understanding what data is important

    We believe our approach to data strategy and the preliminary calculations differentiates us from others in the market. We recognise that for the vast majority of members, only a small number of critical data items are required to complete GMP equalisation calculations. We also know that data management is critical:

    1. Member data will change throughout the project, through pension increases, retirements or other data changes
    2. Not all members need to go through each stage of the process e.g. some members will need rectification but not equalisation, some will require equalisation but not rectification and some members will require both rectification and equalisation. Ensuring that members are correctly tracked through the correct processes improves efficiency and speed.


    Our bespoke Data Management Platform, specifically designed for GMP equalisation projects, does this job for us. It tracks all data changes throughout the project, whether that is from calculations, status changes or assumptions, and provides a clear audit trail of all those changes made.


    It’s also the key at the start of our process: once your data is loaded onto the platform, it carries out checks on the critical data items we need to carry out the calculations. Provided there is sufficient data available we proceed to the preliminary calculations, avoiding the need for potentially unnecessary data cleansing.


  • Preliminary Calculations

     Preliminary calculations

    At this stage our calculations are carried out on our standard, pragmatic approach.


    Where member calculations can be completed (even if some data is missing) there may be no need to compete further data cleansing. Where member calculations cannot be completed the reason is recorded in the Data Management Platform. This allows trustees to make decisions on whether to only data cleanse for all data gaps shown in the data gap analysis, or only a subset of the data gaps that are required to complete the calculations.


    We then provide an overview of the member impact of rectification and equalisation, reviewing the results where the impact is not material and focusing our advice on the outliers and the cases where there are gaps in data. This is key to making decisions on how to tackle gaps in data – making the decisions based on knowledge of the member impact.


    Completing the preliminary calculations before completing data cleansing has the potential to:


    • Reduce the amount of data cleansing required, thereby reducing overall costs;
    • Allow the Trustees to gain insight into the magnitude of the impact for individual members at an early stage; and
    • Help the Trustees make informed decisions on the balance between making assumptions to fill data gaps versus completing data cleanse work.


  • Bespoke advice for your scheme

     Bespoke advice for your scheme

    The preliminary calculations will help us identify which areas for your scheme may require further investigation. This may be data cleansing. Or it could be testing assumptions to fill data gaps more efficiently. Alternatively, there may complex cases that require more in depth investigation. The key point is that this advice can be scoped and out considered based on what is important for your scheme. In our experience, trustees are likely to want to consider advice from their legal advisers when considering any assumptions and additional analysis required.

  • Finalise historic calculations


    Finalise historic calculations

    Once any bespoke advice and data cleansing is complete, we finalise our calculations. Depending on the timing of the project, new data may be required for example due to member movements, pension increases, or other pension revisions. Again, the required checks and audit trail would be would be carried out within the Data Management Platform. The final output would be the revised pensions to be paid to pensioner members, and any historic arrears payments.

  • Future benefits - dual records vs conversion

    Future benefits – dual records vs conversion

    The approach for future benefits might be agreed at the outset of a project, but we also know that the final decision might not be made until the historic position is clear and impact on current benefits understood. We work with trustees to provide advice and support to make the decision on the form of future benefits and the timing of this advice is driven by the needs of our clients.


    Where a dual records approach is chosen, we provide trustees documentation outlining our standard, pragmatic approach for administering dual records in the future (under method B, C1 or C2, whichever is chosen). Where trustees decide to equalise benefits using conversion (method D2), we provide advice on the post conversion benefit design drawing out the key considerations relating to member impact, communications, ongoing administration and the wider objectives of a scheme. Once the decisions are made, our specialist GMP Project Team prepares the data for ongoing administration.

  • Communicate results to members

    Communicate results to members

    We create communications are clear and simple, so that members understand what the changes mean for them and also that they can access and respond to information is the way that suits their needs and preferences. Our standard communications look to achieve just that but in a way that it simple and efficient to deliver, and in line with the PASA guidance on communication. The Data Management Platform provides that data in the required format.

  • Implement new pensions and processes

    Implement new pensions and processes

    Following completion of the final calculations, data from the data management platform can be loaded directly back to the Mercer administration systems. Mercer has already developed core administration routines to incorporate post GMP equalised data into the administration systems. Shortly before new pensions are put into payment, member communications will be issued. This is supported by our call centre team to manage any member queries.

Meet some of the team

John Martin 


John has been instrumental in defining our proposition and is responsible for the consulting advice provided to clients. John has supported strategic delivery and advice on nearly 100 GMP projects.

Sam Marshall 


Sam led the review of our GMP proposition and is now responsible for the end to end process. Her current role is to support both clients and consultants in the delivery and execution of GMP projects.

Adrian Hartshorn 

Senior Partner

Adrian is the proposition lead and chairs the executive committee that oversees the development and delivery of GMP work, as well as leading strategic advice on a range of high profile projects.

Sarah Green 


As well as providing advice on one of the largest cases to complete GMP equalisation after the 2018 judgment, Sarah leads the specialist team that provide GMP advice across the wider business

Speak with a Mercer consultant

If you are considering how your scheme will tackle its GMP rectification and/or GMP equalisation challenge, please reach out to us and we would be happy to discuss how we can support you.

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