Step 1 - Understand the data There are three sub-steps to work through to understand your data: 1. Confirming GMP reconciliation status - Confirm the current status and timescales for completing your scheme’s GMP reconciliation exercise. Even though a number of schemes have received final data cuts from HMRC, these final data cuts have revealed discrepancies with data held by HMRC which need to be resolved before rectification can occur. 2. Understanding members in scope for GMP rectification and equalisation - Assess potential overlap between members whose benefits need to be rectified and equalised to help you to make appropriate decisions, avoid rework, monitor progress and ensure each member is dealt with consistently. 3. Understanding data needed for rectification and equalisation – Are we missing any of the historical data which we need for these calculations? How will it be populated? Are there other events to dovetail with e.g. pension increases? Step 2 - Understanding the nature of the task You should think about the wider requirements of ongoing administration and equalisation when planning rectification work. Active and preserved members - Rectification involves updating GMP data stored on the scheme’s administration system, so correct benefits are put into payment. It provides a firm foundation for calculating equalised benefits and other related missing HMRC data items, such as National Insurance (NI) history, should be updated as part of the exercise. Where rectification has already taken place, you might need to revisit those records to add this data. Pensioners and dependants – A change in GMP is likely to mean benefits in payment are incorrect. You should consider with your advisors the extent to which the same approach or tools can be used for rectification and equalisation calculations or how one project can build on the other. PASA guidance on GMP Equalisation – ‘When to rectify’ RISK | PENSIONS | INVESTMENT | INSURANCE Briefing PASA Guidance on Rectification 1 For most schemes, Guaranteed Minimum Pension (GMP) rectification would naturally follow on from the completion of GMP reconciliation, but with the Lloyd’s judgement and the need to equalise GMP benefits, some trustees are wondering whether to combine rectification and equalisation projects. Helpfully, the Pension Administration Standards Association (‘PASA’) has issued guidance on four steps you should consider as trustees when planning GMP rectification and equalisation projects, to ensure you make the best decision for your scheme.
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Briefing PASA guidance on GMP Equalisation – ‘When to rectify’… · 2020. 7. 22. · PASA Guidance on Rectification. 2. Step 3 - Consider the impact on . members of any delay.
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Step 1 - Understand the data There are three sub-steps to work through to understand
your data:
1. Confirming GMP reconciliation status - Confirm the
current status and timescales for completing your scheme’s
GMP reconciliation exercise. Even though a number of
schemes have received final data cuts from HMRC, these
final data cuts have revealed discrepancies with data held
by HMRC which need to be resolved before rectification
can occur.
2. Understanding members in scope for GMP rectification
and equalisation - Assess potential overlap between
members whose benefits need to be rectified and
equalised to help you to make appropriate decisions, avoid
rework, monitor progress and ensure each member is dealt
with consistently.
3. Understanding data needed for rectification and
equalisation – Are we missing any of the historical data
which we need for these calculations? How will it be
populated? Are there other events to dovetail with e.g.
pension increases?
Step 2 - Understanding the nature of the task You should think about the wider requirements
of ongoing administration and equalisation
when planning rectification work.
Active and preserved members - Rectification
involves updating GMP data stored on the
scheme’s administration system, so correct
benefits are put into payment. It provides a firm
foundation for calculating equalised benefits
and other related missing HMRC data items,
such as National Insurance (NI) history, should
be updated as part of the exercise. Where
rectification has already taken place, you might
need to revisit those records to add this data.
Pensioners and dependants – A change in
GMP is likely to mean benefits in payment
are incorrect. You should consider with
your advisors the extent to which the same
approach or tools can be used for rectification
and equalisation calculations or how one
project can build on the other.
PASA guidance on GMP Equalisation – ‘When to rectify’RISK | PENSIONS | INVESTMENT | INSURANCE
Briefing
PASA Guidance on Rectification 1
For most schemes, Guaranteed Minimum Pension (GMP) rectification would naturally follow on from
the completion of GMP reconciliation, but with the Lloyd’s judgement and the need to equalise GMP
benefits, some trustees are wondering whether to combine rectification and equalisation projects.
Helpfully, the Pension Administration Standards Association (‘PASA’) has issued guidance on four steps
you should consider as trustees when planning GMP rectification and equalisation projects, to ensure
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