GMP equalisation and Interest-bearing instruments: Difference between pages

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''Pensions - UK - contracting out - gender equality.''
Interest-bearing instruments are securities that pay interest at a specified rate either at periodic intervals or at maturity.


GMP is an abbreviation for Guaranteed Minimum Pension.
They differ from ''discount instruments'', where the return is earned by the increase in value to the redemption amount, from the discounted amount of the initial investment.




Historically, UK contracted-out pension schemes were required to provide a GMP.  
Instruments that are always issued in interest bearing form include Certificates of Deposit.


Since 1997, a different test has applied, but schemes still have to provide a GMP for pension rights accrued before 1997.
Instruments that may be issued either in interest bearing form or as discount instruments include Sterling commercial paper.
 
 
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 ==
* [[Contracted out/in]]
* [[Certificate of deposit]]
* [[Gender pay gap]]
* [[Discount instruments]]
* [[Government Equalities Office]]
* [[Financial instrument]]
* [[Guaranteed minimum pension]]
* [[Instrument]]
* [[National Insurance]]
* [[Interest]]
* [[Pension]]
* [[NIB]]
* [[Trustee]]
* [[Security]]
 
* [[Sterling commercial paper]]
[[Category:Accounting,_tax_and_regulation]]

Revision as of 14:40, 16 February 2022

Interest-bearing instruments are securities that pay interest at a specified rate either at periodic intervals or at maturity.

They differ from discount instruments, where the return is earned by the increase in value to the redemption amount, from the discounted amount of the initial investment.


Instruments that are always issued in interest bearing form include Certificates of Deposit.

Instruments that may be issued either in interest bearing form or as discount instruments include Sterling commercial paper.


See also

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