The High Court has ruled that trustees of defined benefit (DB) schemes that provided Guaranteed Minimum Pensions (GMPs) should revisit and, where necessary, top-up historic cash equivalent transfer values (CETVs) that were calculated on an unequalised basis if an affected member makes a successful claim.

The judgment from Mr Justice Morgan, issued today (20 November), ruled that Lloyds Banking Group pension scheme trustees are responsible for equalising the GMPs for members who transferred out of one of its DB pension schemes.

Danyal Enver commented:

“As a result of the Lloyds judgment that came out today, trustees of pension schemes that have transferred out to other pension schemes have breached their duties where the transfer payments were not equalised for GMP.

“This means that members can successfully claim against the trustees of the transferring pension scheme and the receiving pension scheme and claim a top up payment to reflect the shortfall.

“However, the judgment does not require the trustees to proactively make these corrections to previous transfers. As a result, they do not have a set roadmap to resolve their breach, but they do not have any obligation to do anything following this judgment.

“Trustees can now decide if they want to remain with the uncertain possibility of unknown liabilities arising from members’ claims, or if they want to take a complex, costly path to certainty by calculating and settling those liabilities now.”

Read Danyal’s comments in the Daily Mail, Pensions Age and Employee Benefits.