Lloyds 3 – past transfers

4th December 2020

The third judgment arising from the Lloyds case on “GMP equalisation” was published on 20 November 2020.  The High Court ruled that historical transfers out of schemes should be revisited and equalised, although it is unclear how proactive trustees need to be in addressing the issue.  This will apply only to statutory, individual transfers out, not to non-statutory transfers or bulk transfers.

There are numerous difficulties in equalising historical transfers out:

• we are looking at transfers going back up to 30 years, so the original calculations – possibly even the original benefits – may not be available;
• the member may have transferred out from the receiving scheme to another arrangement;
• the receiving scheme may be unable or unwilling to accept a top-up;
• it may not be possible to trace the (former) member.

Trustees should seek advice from their legal advisers on an appropriate course of action.