UK Issues Guaranteed Minimum Pensions Conversion Guidance

The UK’s Department for Works and Pensions has issued guidance outlining how the Guaranteed Minimum Pensions (GMP) conversion legislation might be used to resolve the GMP inequality issue for pensions plans.

The GMP is the minimum pension that an occupational pension contracted out of the Additional State Pension between April 1978 and April 1997 on a salary-related basis has to provide to its members. It allows employers that offered defined benefit plans to contract out their staff and pay a reduced rate of National Insurance Contributions. In exchange for the lower rates, the companies promised that their pension would meet a minimum standard of benefits.

But in October, the UK’s High Court ruled that pension plans must equalize guaranteed minimum pensions for men and women. The UK government has long recognized that GMPs create an inequality in the total overall pension men and women in similar circumstances receive. Experts estimate the ruling could cost pension providers £10 billion to £20 billion in payouts.

The guidance was produced with the assistance of an industry working group in order to assist occupational pension plans that have yet to address inequalities in pension benefits due to GMPs. It describes how pensions could use the GMP conversion legislation to achieve equality going forward.

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The government has said that there is not one method by which pensions should equalize benefits, adding that it is for the trustees of each plan to decide the methodology that is most appropriate for them.

Included in the guidance is a 10-stage process that results in the adjustment of an individual’s benefits to compensate for GMP inequalities as well as conversion of all of the individual’s GMP.

“This guidance is a useful first step to assist trustees and their advisers who may be thinking of using the GMP conversion legislation to resolve the GMP inequality issue,” said David Everett, a research partner at UK consulting firm Lane Clark & Peacock. “However, more needs to be done, by both the DWP, HMRC [HM Revenue and Customs], and the courts before much needed clarity is achieved on how to operate this approach in practice.”

The DWP said it is still considering additional changes to the GMP conversion legislation to clarify certain issues, and will update its guidance periodically to reflect any changes in legislation or material developments in case law.

UK Industry Group to Advise on GMP Equalization

Tags: Department for Works and Pensions, Guaranteed Minimum Pensions, Pension, UK

Bardin Hill Expands Partnership

Bardin Hill Investment Partners, formerly Halcyon Capital Management, announced the appointment of six new partners.

The appointments follow the firm’s completion of its succession plan last October when Jason Dillow was named chief executive officer, the firm formed a strategic partnership with TPG Sixth Street Partners and announced additional investments from existing partners of Bardin Hill, Dyal Capital, and the foundation of the firm’s founder, Alan B. Slifka.

The new partners at Bardin Hill include Pratik Desai, portfolio manager, opportunistic credit; Jacob Fishelis, chief financial officer; Andrew Friedman, partner, opportunistic credit; Damien Miller, portfolio manager, European opportunistic credit; Phil Raciti, portfolio manager, head of US performing credit; and Mark Simons, portfolio manager, merger arbitrage.

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Milliman Hires Radhika Philip to Expand Its Global Higher Education Consulting and Administration Practice

Milliman, Inc. announced the appointment of Radhika Philip as managing director, people strategy and HR transformation, for the firm’s global higher education (GHE) practice.

She joins Gary Setterberg, senior managing director, global higher education, as part of the multidisciplinary practice dedicated to providing employee benefit and human capital advisory and strategic consulting services to higher education and academic medical system clients.

Previously, she served as an executive director in Ernst and Young’s people advisory services and as vice president of people and operations for Aon.

Milliman’s higher education practice provides a full range of human capital, total rewards, employee benefits, and analytic/actuarial services, partnering with the firm’s health care, retirement, risk management, and cybersecurity experts. The practice also has access to Milliman’s market-leading administration services and its Healthcare Intelligence and Insurtech products.

“It’s vital that universities, colleges, and academic health systems receive consulting expertise that is not only sensitive and responsive to the complexities of our higher education institutions, but that is supported by a breadth and depth of expertise, data, and cutting-edge services,” said Philip.

Tim Nelson Appointed Managing Director of Korn Ferry Australasia Operations

Korn Ferry announced that Tim Nelson has been appointed managing director of its Australasian operations.

Nelson succeeds Katie Lahey AM, who after eight years as CEO and then executive chairman, will remain with the firm as non-executive chairman. She has recently been appointed to the Carnival Corp. board and is a non-executive director of Star Entertainment.

Nelson joined Korn Ferry as a financial services partner in 1998 before launching and growing Korn Ferry’s recruitment process outsourcing business across Australasia and Asia. He re-joined Korn Ferry’s executive search practice in 2014 to lead the Melbourne board, CEO and financial services practice and, in 2016, he was appointed managing director of Korn Ferry’s advisory business unit in Australasia.

Nelson has deep experience in growing professional services businesses and advising clients on leadership change, business transformation and governance. At Korn Ferry, he has established high-performing, profitable businesses and built and motivated teams to achieve great results. Most recently, he successfully completed the integration of the Hay Group into Korn Ferry developing a new strategy, structure, and vision for growth across the Australia-New Zealand region.

Nelson will assume his new role May 1.

Tags: Bardin Hill, Korn Ferry, Miliman, People Moves