Let’s get down to calculations
There are multiple approaches which schemes can take to establish their equalisation methodology approach, affectionately known as the C2/D2 debate. This will need to take into account the opinions from sponsoring employers, their actuaries and their lawyers, understanding the impact on future administrative practices and the resulting impact on scheme liabilities, whilst appreciating the cost to do so.
With that in mind, it is no surprise that this monumental task cannot be completed overnight. Although the eventual act of equalisation could be some time in the future, it is no excuse for firms to continue postponing the problem – they must start preparing now.
Once you have run through these preparation steps, decisions can be made on what scheme rules need to be clarified, i.e. whether to take past calculations back 6 years or back to the start of GMP in 1978. How does the forfeiture rulings of the scheme impact this decision?
Those schemes which leave the work to the last minute will inevitably be chancing their luck. This should be thought of as a marathon rather than a sprint.