Guaranteed Minimum Pension (GMP)
Potential increase (uplift)
The National Grid UK Pension Scheme was contracted out of the State Earning Related Pension Scheme (SERPS) from 6 April 1978 to 5 April 2002. Many pension schemes contracted out of SERPS (which was a top-up to the Basic State Pension). As a result, both members and participating employers paid lower National Insurance contributions. In exchange, the Scheme took on responsibility for paying the equivalent ‘top-up’ pension you would have earned through SERPS.
If you had contracted-out service in the Scheme between 6 April 1978 and 5 April 1997, this part of your pension is called GMP.
GMP is the guaranteed minimum pension the Scheme has to provide to you if you had contracted-out membership during this period, once you reach GMP age. GMP age is not necessarily the same as the Scheme’s Normal Retirement Age – it is age 65 for men and 60 for women.
Under the Scheme Rules, you would receive 1/60 of your pensionable salary for every year you were a contributing member of the Scheme.
Your pension is made up of three elements:
- GMP built up between 6 April 1978 and 5 April 1988 (pre-88 GMP)
- GMP built up between 6 April 1988 and 5 April 1997 (post 88 GMP); and
- the non-GMP excess, which is the amount of your Scheme pension above the GMP.
The GMP notionally increases in line with the Retail Prices Index (RPI) from the date you leave the Scheme until you reach GMP age. However, the Department for Work and Pensions (DWP) has agreed that pension schemes like ours can revalue your GMP at a fixed rate for each complete tax year between when you left the Scheme and your GMP age. The rate we apply as an increase to your GMP depends on when you left the Scheme, as the following table shows: