GMP Equalisation (GMPe) continues to be a significant hurdle for DB pension schemes on the final stretch to buyout.
As bulk purchase annuity (BPA) transactions continue at pace, we’re seeing first-hand that an increasing bottleneck in a scheme’s journey to buyout is GMPe. Often avoided or deferred during earlier stages of transactions, delays in completing GMPe projects is creating additional uncertainty and costs to schemes and insurers looking to reach buyout.
What is increasingly clear is that market demand is not the issue. Insurer appetite remains strong. The constraint is confidence. Where GMP equalisation and underlying data cannot be resolved at scale, progress slows regardless of intent.
GMP equalisation remains a complex and time-consuming exercise. It involves rectifying historical benefit calculations to ensure male and female members with equivalent service receive equal benefits - a legal requirement that dates back to the Lloyds case rulings in 2018.
GMPe is not a single calculation or a box-ticking exercise. It is a programme of work that spans data interrogation, record reconciliation, assumption setting, and repeatable calculation logic applied across large member populations.
If undertaken during a live PRT transaction, GMPe becomes a complex project within an already complex process.
In recent discussions across the market, GMP equalisation is consistently cited as one of the key factors slowing the path to policy issuance and scheme wind-up. We even spoke about this during a recent webinar: Easing the buy-in to buyout traffic jam. Advisers and insurers alike point to a growing backlog of schemes unable to complete buyout transactions due to unresolved GMPe and related data issues.
What often causes delay is not disagreement over methodology, but the operational reality. Missing service data, legacy administration records, and inconsistent benefit specifications force manual intervention and repeated review. Each intervention adds time and increases delivery risk.
GMP equalisation is the process of adjusting benefits in defined benefit pension schemes to remove historical inequalities between men and women. These differences arise from how Guaranteed Minimum Pensions were originally calculated, reflecting different State Pension ages at the time.
Following court rulings, schemes are required to review and, where necessary, recalculate benefits to ensure members receive equal value regardless of sex.
While the legal obligation is clear, the execution is far from simple. Applying GMP equalisation retrospectively relies on the quality and completeness of historical data, which for many schemes spans decades and multiple administration systems.
GMP equalisation has become one of the most persistent data and calculation challenges in pension risk transfer.
Before a scheme can complete buyout, benefits must be fully equalised, verified, and evidenced. Buy-in, policy issuance, and scheme wind-up all depend on GMPe work being complete.
In live transactions, GMP equalisation rarely fails because the rules are unclear. It fails because the underlying data cannot support efficient execution. Small uncertainties multiply. Assumptions are challenged. Timelines stretch. Deal momentum slows.
From an insurer’s perspective, unresolved GMP equalisation introduces pricing risk. Insurers require confidence that liabilities are accurate and complete before taking them on.
Where uncertainty remains, it is reflected commercially. Pricing margins widen, additional safeguards are applied, or capacity is redirected towards schemes that are better prepared.
Delayed GMP equalisation does not only affect transaction timelines. It has implications for governance, compliance, and member outcomes.
The Pensions Ombudsman’s position that GMP equalisation should no longer be treated as optional or deferrable reflects a broader shift in regulatory expectation. Failure to address GMPe can lead to incorrect benefit values appearing in member communications and pension dashboards, undermining trust and creating compliance risk.
As pension value data becomes more visible through dashboards and digital communications, schemes are increasingly accountable for the accuracy of the information they present. Resolving legacy GMP issues is now as much about transparency and member confidence as it is about insurer risk appetite.
GMP equalisation is rarely the only challenge schemes face.
Across the market, schemes are under pressure to deliver clean, validated data and accurate benefit specifications in insurer-ready formats. This includes reconciling historic administration records, managing multiple data templates, and applying complex actuarial factors for early and late retirement.
GMPe magnifies any existing data weakness. Poor address data, incomplete service histories, or inconsistent records increase remediation effort and slow validation. The issue is not GMP equalisation alone. It is GMP equalisation applied to fragile data foundations.
In a high-volume market with tightening insurer engagement windows, schemes that cannot meet data and benefit requirements in good time risk delay, pricing uncertainty, or being deprioritised altogether.
Historically, many schemes have relied on spreadsheet-driven processes and manual checking to deliver GMP equalisation.
These approaches struggle to scale to buyout populations. They introduce operational risk at the exact point where certainty, auditability, and repeatability matter most. They also make it harder to evidence decisions clearly under transaction pressure.
As schemes move closer to buyout, tolerance for rework diminishes sharply.
There are now solutions that enable schemes and advisers to address GMP equalisation more efficiently using technology.
Rules-based, low-code calculation engines can bring automation to complex benefit calculations, including GMPe, allowing schemes to apply consistent logic at scale, surface exceptions early, and evidence outcomes clearly.
The benefit is not speed alone. It is confidence. Confidence for trustees making decisions, advisers managing transactions, and insurers assessing risk.
By reducing ambiguity and administrative friction, schemes can present a clearer picture of liabilities, enabling more accurate pricing and faster insurer engagement.
Heywood's suite of PRT solutions helps support schemes as they tackle GMP equalisation challenges, helping to get transaction ready for a successful pension risk transfer.
Through considered integration of technology and specialist support, schemes can relieve the bottleneck described at the start of this article.
Technology solutions are most effective when they complement existing advisers, administrators, and governance structures. Where internal capacity is constrained, targeted specialist support can accelerate timelines without introducing additional complexity.
Schemes targeting buyout should treat GMP equalisation and data readiness as a single strategic workstream. Addressing both early, and at scale, is now essential for maintaining momentum through the PRT market.
As demand continues to rise, this collaborative, technology-led approach will play an increasingly important role in ensuring schemes can secure buyout when market conditions are most favourable.
With the right tools, support, and planning, GMP equalisation does not have to derail transactions. Addressed early and executed efficiently, it becomes a gateway rather than a barrier to successful pension risk transfer.
This article was last updated in December 2025.