It has been three years since the Lloyds case which required schemes to equalise for the effect of GMP. These three years have been characterised by uncertainties on how to undertake this project.
The Pensions Administration Standards Association (PASA), following Lloyds case number 1 in 2018, has set up working groups to help schemes with GMPE and in the last few months issued three new important pieces of guidance on member communications, historic transfer and antifranking.
PASA GMPE communications Guidance
One of the biggest challenges of GMPE is how to communicate something quite technical to schemes’ members in a simple and clear way.
In August 2020, PASA published the GMP Communications Guidance - Early Planning Stage guidance where, in summary, it set up:
how to approach communications;
some broad principles for communicating GMPE;
a useful Do’s and Don’ts section;
some practical things that schemes can do;
a ‘questions and answers for members’ section; and
a communication checklist to help schemes make sure all relevant documents are gathered and reviewed.
In September 2021, one year on from the Early Planning Stage guidance, PASA published the GMP Communications – Implementation Stage guidance designed to help schemes during the implementation stage of their GMPE journey.
This guidance:
contains the important principles for communicating (i.e. layering information, using different channels, providing only the information needed, avoiding jargon, involving others and being trustworthy);
puts the individual at the centre of what pensions schemes should do when drafting communications and encourage pension professionals to take a step back when it comes to communications and put themselves in non-pensions people’s shoes;
shows how to effectively time communications to members and consider legal requirements for informing members, the relevant timing, the expectations for future communications and when to communicate about past transfer values;
considers the different categories of members and what are the different messages to send across, including useful examples;
provides a checklist for planning the data to use in communications; and
also includes the communication checklist to help schemes to make sure all relevant documents are gathered and reviewed (checklist which is also included in the 2020 PASA Early Planning Stage guidance).
The two main messages the Guidance seems to put forward are that schemes must (i) plan efficiently their communications to members allowing sufficient time to plan and check everything and (ii) keep communications effective and simple.