Pension scheme members could be owed as much as £25,000 in back payments from GMP equalisation, according to research by XPS Pensions.
Since the High Court ruling on GMP equalisation in October 2018, which forced thousands of defined benefit schemes to amend their scheme rules and equalise GMPs between men and women, XPS has found 5% of pensioners that are still owed money are owed £10,000 each on average, while in the most extreme circumstances some could be owed £25,000.
The overall impact of GMP equalisation on schemes, and the cost to employers, is often relatively small. For over half of schemes it is less than 1% of overall liabilities. However, it can represent a significant amount for pensioners owed back payments, with the average payment due estimated at £1,000.
The firm's research revealed between 1.25 million and 1.5 million pensioners may be owed some form of back payment.
XPS GMP equalisation lead Vicky Mullins said: "We are seeing a tendency to push GMP equalisation into the long grass, but this is untenable given the average age of those owed money, and the not insignificant amounts of money owed.
"There is no reason why pension schemes cannot move forwards with GMP equalisation now. It is not as complicated as it first appears if you avoid getting bogged down in data. It is incredibly important that members receive the money they are entitled to, particularly at this difficult economic time where older pensioners may have significant need for income."
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