The government is today publishing a consultation on ‘Public Service Pensions, Guaranteed Minimum Pension (GMP) indexation’. The consultation sets out how the government proposes to ensure it continues to meet its past commitments to public service employees regarding the full indexation of public service pensions, including for any GMP element related to membership of a public service pension scheme.
On 6 April 2016, the government introduced the new State Pension (nSP). The reformed system simplified pension provision but removed the mechanism that enabled those public servants in ‘contracted-out’ employment to have their Guaranteed Minimum Pension (GMP) fully price protected. An ‘interim solution’, full indexation, was introduced in 2016, which was later consulted on and extended until 5 April 2021. This ensured that public service pensioners had the GMPs they had earned in public service fully indexed by their public service pension scheme.
The consultation will last for 12 weeks and close on 30 December 2020. The consultation document can be found on: https://www.gov.uk/government/consultations/public-service-pensions-guaranteed-minimum-pension-indexation-consultation
This statement has also been made in the House of Lords