On 26 October 2018, the High Court made a landmark judgment confirming that pension schemes are 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 also agree their approach with the Company if they seek to equalise on terms that are better than a ‘minimum interference’ basis. In most cases the benefit adjustments will be quite small – but there could be significant individual exceptions. Some schemes will also want to combine this 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 rectification and equalisation is designed to put people first and ensure that projects are executed in a way that is simple, agile and safe 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.




  • Promoting pragmatism and reducing the number of Trustee decisions is fundamental to our approach. We understand which decisions are important 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.
  • We have standardised our calculations and documentation where possible and we make the process simpler for all stakeholders, focussing on areas that are relevant to each scheme and also 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 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.
  • We work with all stakeholders to agree what additional advice is needed to finalise the calculations and implement the revised benefits.
  • The use of a dedicated project manager will also ensure the project is delivered on time and on budget.



  • Our data management system delivers safer outcomes by recording all data changes and assumptions made to fill data gaps. This data audit ensures that all data changes for each member can be interrogated as part of the GMP project and will be held by the business as usual administration team to ensure there is a robust audit trail that can be accessed in the future, if required.

GMP @PACE: Mercer’s approach to GMP rectification and equalisation

Agree strategy and objectives


Our approach is to 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 work will be carried out throughout the project, for example decisions around data gaps and even methodology can (and are likely to) take place after the preliminary results stage.


However, in the initial planning stage we would:

  • Agree how the GMP project feeds into the wider strategy of a scheme. This informs our advice on GMP rectification and GMP equalisation methodology and we ensure that we take into account your long term planning.
  • Agree high level project milestones and scheduling, and establishing a decisions log to capture the key strategic decisions made throughout the project. The decisions log would then also form part of the overall governance and audit documentation.


 Understanding what data is important


We believe our approach to data strategy and the preliminary calculations differentiates us from others in the market. Once the data is extracted from the administration database, it is passed to our specialist GMP Projects team. The data is then loaded onto Mercer’s data management system.


Data management is critical for two reasons:

  1. Not all members will need to go through all processes 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.
  2. Member data does not stand still; it will change through the process due to the impact of rectification and equalisation and it will change in the background as the day-to-day administration continues. The data management system tracks every individual change to a member’s data, providing a complete audit trail within a controlled environment. It also facilitates a member by member check at the point of implementation, ensuring any changes to status or underlying benefits outside of the GMP project are identified and accounted for.


Once the data is loaded into the data management system, an analysis of the key data items critical to the GMP rectification and equalisation calculations is completed. Provided there is sufficient data available we proceed to the preliminary calculations. We expect this to be the case for most schemes as in practice only a small number of data points are required in order to carry out the calculations. Key data items are most likely to be unavailable where a dependants pension is in payment and the data relating to the original member is unavailable.


At this stage we would also consider the wider data strategy for a scheme and whether there are any other projects or rationale for other data cleansing work to be undertaken at the outset.

 Preliminary calculations


As well as helping you to understand what data is critical for the GMP project, we will undertake preliminary calculations for all pensioners so all decisions you take are made in the context of the impact on members. At this stage our calculations are carried out on our standard, pragmatic approach. Our specialist GMP Projects team will undertake the rectification and equalisation calculations for members; this is a standalone team who specialise in and focus purely on these calculations.


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 system. 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 then 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;
  • Allows the Trustees to gain insight into the magnitude of the impact for individual members at an early stage; and
  • Make informed decisions on the balance between making assumptions to fill data gaps versus completing data cleanse work.

 Bespoke advice for your scheme


Once preliminary calculations are complete we work with trustees to determine which data gaps need to be filled. Additionally, the preliminary calculations can be used to test whether assumptions can be used to fill some data gaps; for example, some missing data items may not have a material impact on the member outcome so it is likely that it would be acceptable to make an assumption. In our experience, trustees are likely to want to consider advice from their legal advisers when considering any assumptions and additional analysis required.


Where data cleanse does take place, this will be held in the data management system. This provides data in the format required by the calculation models used by Mercer and for the import back into the administration platform. This removes the need for manual formatting or manipulation of the data.


 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. This process and the required checks would be carried out within the data management system. The final output would be the revised pensions to be paid to pensioner members, and any historic arrears payments.

A completed summary of the approach taken and decisions made would is provided through the decisions log and the calculations report, which would be updated as part of the process to finalise the calculations. The decisions taken and the approach used for administering benefits in the future would be documented separately, with further details on this stage set out below. The audit trail within the data management platform will also form part of this documentation.


 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


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.


 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 center team to manage any member queries.


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


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

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