PENSIONERS AND DEPENDANTS

GMP EQUALISATION

The Group Trustee wrote to those members who are affected by Guaranteed Minimum Pension (GMP) equalisation in August 2024 about some changes they are proposing to make. The changes are linked to the GMP part of your pension, and a project called ‘GMP equalisation’, which all pension schemes like the Group have to carry out.

From early August to 4 October 2024, the Group Trustee ran a consultation with affected members about the planned changes. Thank you to everyone who provided comments during the consultation. Having carefully considered all feedback received, the Group Trustee has decided to proceed with the proposal.

What happens next?

We’ll carry out the appropriate benefit calculations and write to you in early 2025 with full details of any change to your Group pension after GMP equalisation has been addressed. Your new pension payments will then start.

Your pension may increase as a result of addressing the historical GMP inequality, though any increase will likely be modest. In all cases, the current amount and expected value of your pension over your lifetime won’t be reduced as a result of GMP conversion.

Context information:

Read an overview of what’s happening.
Watch a short video which explains what’s happening.
Find answers to your questions.
Read a copy of the letter issued to affected members here and the Q&A provided with the letter, here.

Please refer to the letter you were issued in August for the key dates to be aware of. This is the current timeline and may be subject to change.

Early August 2024:

Letters issued to affected pensioner and dependant Group members explaining the proposal.

Early August 2024:

Consultation on GMP proposal starts.

4 October 2024:

Consultation ends.

Mid-October 2024:

Following the outcome of the consultation, the Group Trustee decides to proceed with the proposal. The outcome is published on the Group website and a bulk email is issued to affected members.

Early 2025:

Benefit statements are issued to affected pensioner and dependant members. This will show any change to your Group pension after addressing the historical GMP inequality.
Your new pension payments start.

This section provides more information about GMP equalisation and conversion.

The two elements at the heart of these pension changes are:

Addressing the inequality
Following the outcome of a High Court legal case, UK pension schemes such as the Group need to address an inequality relating to some historic GMP benefits. (See ‘What is GMP?’ below.) This may affect your Group pension, although your Group pension will not reduce as a result of the changes.
Simplifying pensions
Following the outcome of the consultation, the Group Trustee has agreed that all GMPs in the Group will be converted into a different form of pension, which will simplify the Group’s benefit structure.

Click here to watch a short video for an overview of the GMP issue and the steps we are proposing.

What is GMP?

Part of your Group pension is GMP, which is a substitute for part of the old State Pension arrangement. You would have received this part of your pension from the Government had you not been a member of the Group.

Please see the GMP Q&As for answers to your questions.

Please make sure you understand the proposal and what this might mean for your Group pension:

The letter, which was sent to affected members, explained the proposal, the key dates in the process you need to be aware of and the arrangements for the consultation which has now closed. If you’d like to remind yourself of the detail, please click here to read a copy of the letter.
The letter included a ‘Questions and Answers’ document that contains more information about GMPs and the Group Trustee’s proposal. In particular, we would like to draw your attention to questions 6 and 7. These explain how your pension may change if the proposal goes ahead.
There’s a short video about the GMP issue and the steps we are proposing.
There’s an online GMP Q&A providing more detailed information.

Remember

Your pension may increase as a result of addressing the historical GMP inequality, though any increase will likely be modest. No one’s pension will reduce as a result of GMP equalisation.

If you have any questions about GMP equalisation, please use the following contact details:

Email: ngridgmp@railpen.com
Phone: 0808 196 3694
Post: National Grid Electricity Group of the Electricity Supply Pension Scheme, Railpen, 2 Rye Hill Office Park, Birmingham Rd, Coventry CV5 9AB.

General queries

If you have a general query about the Group or your benefits, please get in touch with Railpen using the usual contact details: https://ngeg.nationalgridpensions.com/contact-us/