GMP reconciliation is the name of the process used to ensure the Scheme records agree with those of the National Insurance Contribution Office (part of HMRC). This process enables a scheme to consider its data as clean and entirely reliable.
Most UK defined benefit pension schemes, including the NGUKPS, have been required to undertake an exercise to reconcile their records recently. The process has resulted in a small number of members’ pensions being adjusted in March 2021. Those affected have been informed.
Other members will not see a change in their pensions in payment although the way the different elements of their pension have been increased will have altered from previous years; this is to reflect the corrected GMP figures identified by HMRC during the Scheme GMP reconciliation exercise.
A Q&A on GMP reconciliation is available.
You may be aware that yesterday National Grid announced three significant transactions:
These transactions create a number of strategic benefits for the Company:
National Grid’s focus as a Group will be to continue enabling the energy transition for all and continuing the decarbonisation of gas.
It is important to note that these strategic changes do not affect your pension.
More detailed information about the Company transactions can be found on the National Grid website.
A message for contributing and deferred members
From 6 April 2028, the earliest age from which people can normally start to take their pension benefits is changing from age 55 to age 57. The Government confirmed this change for most pension arrangements in February 2021 - although some schemes may still allow benefits to be taken before age 57 when the changes comes in from April 2028.
At present, whilst the Government is still consulting on the detail, we are unable to confirm the extent to which the changes will impact the Scheme, and it may take some time before the position becomes clear.
If you are thinking about taking a transfer with an expectation that you can start to take benefits from the receiving arrangement prior to age 57, you should consider this and discuss it with your financial adviser.
This change does not impact the ability to take pension benefits before the minimum pension age as a result of ill-health.
The latest issue of Pensions Update is now available for you to view online at My Online Pension where you can find it under General Documents.
If you receive your copy by post, the newsletters are currently being printed and will be mailed out in early March.
Pensions payable from the National Grid UK Pension Scheme are reviewed in April each year and increased in line with the percentage increase in the Retail Prices Index (RPI) for the 12 months up to the previous September.
This year the main annual pensions increase will be 1.1%, which is in line with the increase in the RPI for the 12 months up to September 2020. This will be applied with effect from Monday 12 April 2021.
If you are a man under age 65, or a woman under age 60 at the increase date, your whole pension will be increased by this amount and you will receive details in your April payslip.
However, if you are a man over age 65, or a woman over age 60, your National Grid pension is likely to include what’s known as a Guaranteed Minimum Pension or GMP. Different increases apply to the GMP part of your pension and depending on when you reached or will reach State Pension Age, some increases to your Scheme pension may be paid by the State.