With regard to any GMP accrued from 6 April 1988, the occupational pension scheme is required to pay increases in line with the Consumer Price Index up to a maximum of 3%.
With effect from 6 April 1997, Guaranteed Minimum Pensions no longer accrued and the system was replaced by the Reference Scheme Test.
The scheme would pay an additional £11.70 in respect of the excess pension (3% of £390), but nothing on the pre 1988 GMP.
The individual is, however, entitled to an increase of 4.5% on his total Guaranteed Minimum Pension, which amounts to £4.95 (4.5% of £110).
With effect from 6 April 1997, Guaranteed Minimum Pensions no longer accrued and the system was replaced by the Reference Scheme Test.
Table 2.C: Estimated cumulative GMP loss from indexation (current terms) based on maximum GMP amounts in Table 2.B (including inherited rights) Loss / CPI assumption Male Female 1% £6,000 £9,000 2% £13,000 £18,000 3% £19,000 £27,000 Source: Government Actuary's Department (GAD) People who reached state pension age prior to 6 April 2016 continue to have all or part of their GMP increases paid via their state pension as described earlier on in this article.