There is no doubt many trustees and administrators would love to step into a time travelling DeLorean, whizz back and straighten out their scheme’s GMP records. 

(Apologies in advance to those with only a passing knowledge of the Back to the Future films!)

Reconciling GMP data held by schemes against that held by HMRC has been a substantial job, and one that 1,700 schemes didn’t manage to fully complete prior to HMRC shutting up shop at the end of 2018.  

Whether these schemes now plan to reconcile on an individual basis as members reach their GMP age, use the available GMP Checker tool to check their records, or simply choose to rely on a combination of the data they and HMRC hold (don’t forget legal advice), then their journey will continue into the future.

Remember if your Scheme accepted a different GMP figure during reconciliation to the one you originally held, then the member’s scheme benefits will need to be rectified in some way - but in the absence of a flux capacitor how is this done?

Option 1: Look to the future

The easiest approach is to only rectify GMPs going forward, ignoring any past discrepancies.  However, this requires strong justification (as some members are likely to lose out compared with paying the correct benefits), so perhaps should only be considered for Schemes with particularly bad and unreliable data. Legal advice is a must.

Option 2: Visit the past

This is where a time machine really would come in handy. The most watertight option is to re-administer the scheme from 1978 (for those cases that require rectification).  This approach requires a thorough history of the scheme, a robust benefit specification that can be relied upon and confidence that the scheme data is reliable. It can be a huge undertaking for some schemes.

Option 3: Be pragmatic

As Doc Emmet Brown said "If you put your mind to it, you can accomplish anything."  An approximate solution that manages to satisfy lawyers, Trustees, members and administrators is what most schemes might be looking to achieve.  There are many different ways to achieve this and we have been through a number of different options with our clients.

Whatever solution you choose make sure you get appropriate legal advice and ensure you have considered the many tax issues that could arise. Tax could be a really important area for some individuals so get some expert advice.

Of course, with each of these options, the potential for future GMP equalisation exercises will need to be kept in mind - although this shouldn’t be a barrier to you commencing your GMP rectification project:

• Run some analysis on the cases that now require rectification, eg if no one has any 90-97 service then get on with your full rectification project now.
• If you have some members that do have 90-97 service, then consider tying these into any equalisation work (but only if it is likely to commence reasonably soon).
• Make sure you get your communications spot on; rectification and equalisation can throw up some odd results and can be confusing for members.

Most importantly don’t drop the ball and leave your known data errors in the past…Perhaps a case of keeping your revs at 88mph and waiting for the 1.21 Gigawatts of lightening to strike!

Download our addressing GMP inequalities road map to help you navigate the journey around GMP.