If you only paid into the Local Government Pension Scheme (LGPS) after 1997, you will not have a Guaranteed Minimum Pension (GMP) amount. However, if you transferred some pension rights in from another contracted-out scheme that you paid into before 1997 you may have a GMP.
If you paid into the LGPS before 1997, and you have reached State Pension age (SPa), you will probably have a GMP.
Definition of a GMP
From 6 April 1978 to 31 March 2016 the State Pension was made up of 2 parts:
- basic pension
- additional pension, known as the State Second Pension (S2P) and previously known as the State Earnings Related Pension Scheme (SERPS).
Occupational pension schemes could 'contract-out' of the S2P and in return members pay a lower rate of National Insurance contributions. The LGPS, along with all public service pension schemes, was contracted-out of the S2P.
The LGPS must ensure that the pension paid to a member is as much as they would have been paid under S2P. This is known as the Guaranteed Minimum Pension (GMP). It isn't a separate pension; it's simply the minimum amount your LGPS pension must reach. Usually your LGPS pension is more than your GMP.
With effect from 6 April 1997 Guaranteed Minimum Pensions no longer accrued.
GMP amount
Your GMP is calculated by the Department for Work and Pensions (DWP) and notified to you with your State Pension entitlement. The DWP inform us of the GMP amount. Your GMP is paid as part of your Local Government pension, not in addition to it. In correspondence from the DWP they may refer to the GMP as Contracted Out Pension Equivalent (COPE).
GMP and pension increase
If your State Pension age (SPa) is on or after 1 April 2016, we pay the full increase on the GMP element with your local government pension.
If your State Pension age (SPa) is before 1 April 2016, we pay up to 3% increase on the GMP element between 6 April 1988 and 5 April 1997. We pay it with your local government pension. The DWP pay any amount outstanding above the 3% with your State Pension.
The DWP pay the full increase, no matter what the percentage is, on the GMP up to 5 April 1988 with your State Pension.
Government legislation changed in 1988 so the GMP is made up of 2 elements:
- pre 1988 and
- post 1988 amounts.
The table shows what pension increase is paid on the different parts of your pension and who is responsible for paying it.
| Part of the pension | How much pension increase is paid | Where it is paid | Who is responsible for paying it |
|---|---|---|---|
| Basic LGPS pension, less pre and post 1988 GMP amount | Total % increase | With LGPS pension | Kent Pension Fund |
| Pre 1988 GMP amount | Total % increase | With State Pension | DWP |
| Post 1988 GMP amount | 3% or total % increase if lower than 3% Any remaining % over 3% | With LGPS pension With State Pension | Kent Pension Fund DWP |