GMP equalisation now top priority for schemes
Guaranteed minimum pension (GMP) equalisation has soared to the top of pension schemes' to-do lists, with 58% stating it is a priority project, research from Equiniti has revealed.
This is a drastic increase from the previous year, when just 13% of schemes said GMP equalisation was a priority for them.
The administrator's survey - which questioned more than 300 pension professionals - also revealed the significance of the GMP rectification process, with 45% of schemes also stating it as a priority.
However, despite the increased focus from pension schemes, a fifth (19%) revealed they still have little knowledge of current legislation surrounding GMPs.
Propositions and solutions director Chris Connelly warned schemes to get their data in order and stop "postponing the problem".
He said: "Pension schemes have had GMP equalisation looming over them for years now… They must start assessing their data and getting on with the corrections that they will inevitably have to carry out.
"The Pensions Regulator (TPR) stressed the importance of record keeping and how it intends to focus on those schemes who are not taking data quality seriously. We can infer that it will not be long before the regulator includes schemes who are not making significant progress on their GMP equalisation."
The survey also revealed nearly a quarter of respondents (23%) are prioritising working towards a buy-in or buyout as the market continues to expand.
Connelly added if schemes do not work out the fundamentals of the GMP process, it will "carry a significant impact on their ability to achieve a long-term goal of buyout which remains a major focus for trustees".
Despite the need for robust data and processes to conduct the GMP rectification and equalisation exercises, as well as for bulk annuity deals, Equiniti revealed 42% of schemes said they had no intentions to improve their TPR score.
This comes after analysis revealed a fifth of defined benefit schemes were placed in the weakest scoring categories by TPR when it graded them into one of five categories in its annual funding statement in March.
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