Covenant trigger and GMP equalisation: Difference between pages

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imported>Doug Williamson
(Create page. Source: The Treasurer, Nov-Dec 2017, p10.)
 
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''Documentation risk''
''Pensions - UK - contracting out - gender equality.''


A covenant trigger is an event defined in borrowings documentation, which results in a breach of covenant.
GMP is an abbreviation for Guaranteed Minimum Pension.


Also known as a 'covenant trigger event'.
 
Historically, UK contracted-out pension schemes were required to provide a GMP.
 
Since 1997, a different test has applied, but schemes still have to provide a GMP for pension rights accrued before 1997.
 
 
In the past, retirement ages for women and men in the UK were different.
 
This resulted in unequal treatment of men and women in respect of their GMP entitlements.
 
 
GMP equalisation is the process of ensuring equality between women and men for these entitlements.
 
 
<span style="color:#4B0082">'''''Legal requirement to equalise GMPs'''''</span>
 
The legal requirement to equalise GMPs was uncertain until the judgment of the High Court in 2018 in the case of ''Lloyds Banking Group Pensions Trustees Ltd v Lloyds Bank PLC and others''.
 
The court held that the pension trustee was “under a duty to amend the Schemes in order to equalise benefits for men and women so as to alter the result which is at present produced in relation to GMPs.




== See also ==
== See also ==
*[[Breach of covenant]]
* [[Contracted out/in]]
*[[Covenant]]
* [[Gender pay gap]]
*[[Credit event]]
* [[Government Equalities Office]]
*[[Documentation risk]]
* [[Guaranteed minimum pension]]
*[[Event risk]]
* [[National Insurance]]
*[[Ratings trigger]]
* [[Pension]]
*[[Trigger event]]
* [[Trustee]]
 
[[Category:Accounting,_tax_and_regulation]]

Latest revision as of 19:40, 23 June 2019

Pensions - UK - contracting out - gender equality.

GMP is an abbreviation for Guaranteed Minimum Pension.


Historically, UK contracted-out pension schemes were required to provide a GMP.

Since 1997, a different test has applied, but schemes still have to provide a GMP for pension rights accrued before 1997.


In the past, retirement ages for women and men in the UK were different.

This resulted in unequal treatment of men and women in respect of their GMP entitlements.


GMP equalisation is the process of ensuring equality between women and men for these entitlements.


Legal requirement to equalise GMPs

The legal requirement to equalise GMPs was uncertain until the judgment of the High Court in 2018 in the case of Lloyds Banking Group Pensions Trustees Ltd v Lloyds Bank PLC and others.

The court held that the pension trustee was “under a duty to amend the Schemes in order to equalise benefits for men and women so as to alter the result which is at present produced in relation to GMPs.”


See also