The majority of UK pension trustees and sponsors expect to convert Guaranteed Minimum Pensions (GMP) into other benefits when carrying out equalisation, a survey has found.
The findings shows that 78% plan to go down the conversion route, with 57% anticipating the bulk of equalisation to take between one and two years to complete.
Willis Towers Watson (WLTW), which carried out the research, said it expects these schemes to get rid of all GMPs, not just those accrued between May 1990 and April 1997.
This is the time period for which male and female benefits must be equalised after a High Court ruling last year potentially added billions to schemes' liabilities.
Rash Bhabra, managing director at WLTW's retirement business, said the first advantage of conversion is that benefits are simpler to administer and communicate.
"Schemes would not need to maintain 'dual records' comparing what a pensioner has actually received with what would have been due to someone of the opposite sex," he said.
"Second, the unusual way in which GMPs increase, both before and after coming into payment, makes them difficult to hedge and more expensive to pass on to insurers."
"Finally, more straightforward benefit structures can provide members with more flexibility. GMPs have historically placed restrictions on options such as early retirement."
Although conversion is expected to be prevalent, 91% of trustees and sponsors expect equalisation to take between one and three years, with just 4% thinking it can be done in a year.
And Bhabra said some schemes might prefer the hassle of dual records to giving individuals a choice, and that retaining GMPs allows schemes to keep their options open.
"There is a huge amount of data to wade through and it is important to get equalisation right first time, with a well-documented audit trail," he continued.
"The last thing any scheme wants to do is to pay members the wrong amounts and have to go through the whole process again."
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