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Equalising for the effect of unequal GMPs: Lloyds transfers Judgment

Andrew Short QC and Nicholas Hill acted for the Representative Defendant in this long-awaited and much anticipated case confirming the scope of the obligation to equalise for the effect of unequal GMPs following transfers out.

In 2018 the first Lloyds Judgment [2018] EWHC 2839 (Ch) confirmed, over 20 years after the obligation arose, that pension schemes had to equalise benefits for the effect of unequal GMPs.

The 2018 Judgment did not address the position of trustees of pension schemes where a member had transferred out and the trustees had made a transfer payment. In circumstances where the payment made failed to reflect the value of the member’s equalised benefits the unanswered question was whether the trustees remained under an obligation to do anything about the fact that the transfer payment it had made had been inadequate.

Transfer Judgment

The judgment concerning the position of trustees following on a transfer payment was handed down on 20 November 2020.

The Judgment concludes that:

  • Under the cash equivalent legislation:
    • the Trustee owed a duty to a transferring member to make a transfer payment which was correctly calculated and which reflected the member’s right to equalised benefits;
    • the Trustee committed a breach of that duty in some cases by making an inadequate transfer payment;
    • the breach occurred at the time of the transfer;
    • the Trustee remains liable to the transferring member for its breach of duty;
    • the Trustee is not discharged from that liability by any statutory provision or any rule of the Schemes or by any agreement with the transferring member;
    • a transferring member is entitled to seek a remedy against the Trustee and, in particular, an order from the court that the Trustee belatedly perform its duty to pay the correct transfer payment;
    • a claim by a transferring member for an order that the Trustee belatedly perform its duty is not time barred, either under the rules of the Schemes or under the Limitation Act 1980;
    • the Trustee is able belatedly to perform its duty even without an order of the court.
  • In the case of mirror-image bulk transfers under the preservation legislation, the transferred scheme trustees are discharged because the obligation to equalise (by providing a top-up payment) transfers to the receiving scheme.
  • In the case of individual rules-based transfers pursuant to the schemes in issue, the transferring member no longer has rights under the transferring scheme unless the court sets aside the exercise of the power and the transferring member can require the trustees to exercise the power afresh. The transferring member can only ask the court to set aside the earlier exercise of the power if the trustees had committed a breach of duty when exercising the power. Whether the trustees committed a breach of duty in that way would require an investigation of the relevant circumstances which was not carried out at the trial.

Andrew Short QC and Nicholas Hill acted for the Representative Beneficiaries in 2018 and for the Representative Defendant in 2020.

Read the full judgement here.


Reflections on the case

The consequences for pension schemes are far reaching and significant. Andrew and Nick will be hosting a webcast on Wednesday 9th December where they will discuss the case and the Judgment in detail.

To register your interest in attending this event please contact


Find Out More

Andrew Short QC’s practice centres on pensions, employment, and general commercial work. His “practical”  and “realistic”  approach together with his “great understanding of the commercial issues in a case” makes his strategic advice and his advocacy highly sought after by his clients, whether they are national or international companies or organisations, public bodies, trustees, trade unions or individuals.

Nick Hill practises in commercial litigation with a focus on pensions and financial services law. He is much in demand for his expertise in cross-over work involving pensions, financial services and employment. The directories recommend Nick for his client care, for developing new arguments, and for finding solutions. Chambers & Partners 2021 describes him as “Enormously thorough and quick. Right on top of the subject, and you can rely on him to know what the case is about and then spot a new angle. Second to none.”

To find out more, contact Nick Levett (+44 (0)20 7427 4908) or or Adam Macdonald (+44 (0)20 7427 4906).



Events, News, Pensions 20 Nov, 2020


Andrew Short QC

Call: 1990 Silk: 2010

Nicholas Hill

Call: 2008

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