On 5 April 2013, DWP published an interim response to the public consultation on its proposals for a change in the law on guaranteed minimum pensions (GMPs). The consultation had circulated a draft set of regulations – the draft Occupational Pension Schemes and Pension Protection Fund (Equality) (Amendment) Regulations. The consultation was open from 20 January to 12 April 2012.
The draft Regulations would amend the Equality Act 2010 (EA’10) and the Pensions Act 2004 (PA’04) in relation to payments made by schemes and the Pension Protection Fund with the following effect: where inequality occurs from the application of the GMP legislation, an obligation under the EA’10 and PA’04 to equalise pensions for men and women would arise regardless of whether or not a comparator of the opposite sex could be identified. A proposed draft method was published and made available for schemes to use in equalising GMPs.
The interim response reveals that the DWP will implement its draft regulations making schemes deal with their GMP inequalities, but that it will not finalise its proposed equalisation method due to receiving a negative reaction from the majority of respondents.
It is unknown when the draft regulations will come into effect, although the pensions minister Steve Webb stated earlier this year that they are unlikely to be finalised until 2014. In the meantime, the government is considering whether to publish statutory guidance addressing how the statutory GMP conversion regime could be used alongside equalisation. Converting GMPs to scheme benefits (under the Pensions Act 2007) appears to be the industry's preferred solution to the issue.