Pre and post April 1988 GMPs
From 6th April 1988 changes in legislation have the effect of splitting the GMP. Therefore, service from 6th April 1975 to 5th April 1988 becomes the Pre 88 GMP, and service from 6th April 1988 until 5th April 1997 becomes the Post 88 GMP.
It is important to recognise that the GMP is paid as a component of your pension and not as an addition.
Therefore the percentage increases that SPPA will pay on your total pension are as follows;
The SPPA will not pay any increase on Pre 88 GMP, the increase due on any GMP relating to service prior to 6th April 1988 will be paid with your State Pension by the Department of Work and Pensions (DWP).
The SPPA will pay an increase on Post 88 GMP, up to a maximum of 3%, as part of your annual pension. Any increase over 3% will be paid along with your State Pension by the Department of Work and Pensions (DWP).
The remainder of your pension, after the setting aside of the GMP components, will be increased by the annual increase rate, e.g. 3.10% for 2011.
This explains why your annual pension increase is sometimes lower than the full percentage increase as only certain components are increased by SPPA as the diagram below illustrates.