Your Pension - Your Future 

If you built up benefits in the Eagle Star or Zurich Insurance schemes before 6 April 1997, your pension includes a Guaranteed Minimum Pension (GMP). This replaces part of your State Pension.

Before April 2016, the State Pension had two parts:

• The flat-rate Basic State Pension.  

• An earnings-related pension, called the State Second Pension (S2P), previously known as the State Earnings Related Pension Scheme (SERPS).  

From 6 April 1978, pension schemes could ‘contract out’ of SERPS. This meant:  

• Employers and employees paid lower National Insurance contributions.  

• The pension scheme had to provide a minimum level of benefit instead of the SERPS pension the employee was giving up.  

This minimum level of benefit is the GMP. The law sets the amount of GMP and how it must increase before and after GMP payment age.

No one has built up GMPs since 6 April 1997. 

GMP reconciliation is the process of reviewing the Scheme’s GMP records against HMRC’s GMP records.

Rectification involves correcting any errors in the GMP records or past calculations. This ensures your benefits are accurate before we make any equalisation adjustments.

There are a few reasons why our records might not match HMRC’s. Some of our records go back over 40 years, from a time before modern computers when everything was done manually. Discrepancies could also have occurred when things changed, such as when people transferred benefits into the Scheme or the schemes merged.

GMP equalisation refers to the process pension schemes must follow to adjust pensions for the effect of unequal GMPs for men and women.

This requirement applies only to GMPs built up from 17 May 1990 onwards.

The inequality arises because GMPs for men and women are calculated differently and become payable at different ages. They also increase differently to other Scheme benefits both before and after GMP payment age.

In the past, men and women received their State Pensions at different ages – 65 for men and 60 for women. But from April 2010 to November 2018, this was gradually equalised so that both men and women had a State Pension Age of 65.

However, GMPs are still paid at 65 for men and 60 for women.

In 1990, the European Court of Justice ruled that UK pension schemes must treat men and women equally for pensions built up after 17 May 1990. This included having the same pension age.

But GMP rules were set by law and the law wasn’t clear about whether GMPs should be equalised and how it might be done.

In October 2018, a High Court ruling in the Lloyds Bank case decided that all benefits, including GMPs built up after 17 May 1990, should be equalised for men and women. The outcome of this judgment is that pension schemes need to adjust pensions for the effect of unequal GMPs earned after 17 May 1990. The judgment set out several options for doing this.

In November 2020, a follow-up ruling confirmed that past transfer values must also be reviewed and potentially corrected.

We’ll compare your current pension with what it would have been if you’d built up opposite gender GMP between 17 May 1990 and 5 April 1997. Everything else in the calculation stays the same – like your age, salary, and retirement date.

Your current pension could be higher or lower than the opposite gender benefits. This depends on many factors and can change over time. Therefore, we’ll continue to review your benefits every year when your pension increases.

Our initial checks show that most Scheme members are already receiving the higher pension.

If the review shows that you’re due an adjustment because you’re currently receiving the lower amount, we’ll amend your pension to the higher amount.

For those who need an adjustment, the pension increase will usually be quite small.

If the review shows that you’re due an adjustment for past under payments, you’ll receive a back payment. We’ll provide full details if this applies to you.

Any increase to your pension or back payments may have tax implications. If this applies to you, we’ll explain what it means and provide guidance.

The calculation routines on the pensions administration system will be re-programmed to calculate your pension based on both actual and opposite gender GMP for the period between 17 May 1990 and 5 April 1997. The two amounts will then be compared to determine the higher amount. This means that, in future, the pension illustrations on the member website will allow for GMP equalisation.

If you transferred out after 1 August 2025, your transfer value payment already allowed for GMP equalisation.

If you transferred out before this date, we will, where possible, compare the transfer value you received with what you would have received if you’d built up opposite gender GMP between 17 May 1990 and 5 April 1997.

If the review shows that you’re due an adjustment, you could receive a one-off top-up payment.

Since August 2025, all transfer value payments from the Scheme have been calculated on an equalised basis.

We’ve undertaken a detailed review of member records and benefits and agreed the equalisation methodology with the Company.

In addition, we’ve corrected past errors in GMP records for members yet to receive their pension.

We’ve also appointed a specialist GMP equalisation adviser, Aon, to support the project and calculation work. Aon are working through the calculations to check if any adjustments are needed to correct past errors in GMP records for pensioner members and to comply with the GMP equalisation ruling.

Once the calculations are finalised, we’ll apply any necessary changes to your benefits. If these changes affect you, we’ll contact you directly with all the details.

It is our intention to complete the project as soon as feasibly possible. However, GMP equalisation is proving to be a complex and time consuming project for the whole pensions industry and the administration system changes and calculation work are substantive and expected to take some time yet.

If you have a question about GMP equalisation, you can email the ZPen team at zpenteam@uk.zurich.com or call 0800 232 1915 (option 3).