Guaranteed Minimum Pension - GMP

AAA

DEFINITION of 'Guaranteed Minimum Pension - GMP'

Pensions earned while working in the United Kingdom's public sector between 1978 and 1997. During those years, the UK's public sector pension plan was contracted out and the pensions earned are handled differently than other years. The amount of pension earned during these years is supposed to be roughly equivalent to the amount an employee would have otherwise earned.

INVESTOPEDIA EXPLAINS 'Guaranteed Minimum Pension - GMP'

The guaranteed minimum pension applies only to pensions earned during the specified years. If a public sector employee earned income before or after the specified years, in addition to during the specified years, the different time periods of the pension will be calculated separately. After April 6, 1997, guaranteed minimum pensions no longer accumulated and the system was replaced.

RELATED TERMS
  1. Simplified Employee Pension - SEP ...

    A retirement plan that an employer or self-employed individuals ...
  2. Pension Plan

    A type of retirement plan, usually tax exempt, wherein an employer ...
  3. Corporate Pension Plan

    A formal arrangement between a company and its employees - or ...
  4. Retirement Planning

    The process of determining retirement income goals and the actions ...
  5. Employee Benefits Security Administration ...

    A division of the Department of Labor (DOL) charged with enforcing ...
  6. Operating Cost

    Expenses associated with administering a business on a day to ...
RELATED FAQS
  1. How do I perform a financial analysis using Excel?

    Investors can use Excel to run technical calculations or produce fundamental accounting ratios. Corporations use Excel to ... Read Full Answer >>
  2. Which accounting cycle is best for my business?

    Most accounting resources suggest that there are between five and eight different accounting transaction cycles, each of ... Read Full Answer >>
  3. How does a pension income drawdown work?

    While there are similar drawdown plans in the United States, a pension income drawdown plan most commonly refers to a specific ... Read Full Answer >>
  4. What are the disadvantages of using the sinking fund method to depreciate an asset?

    Using the sinking fund depreciation definitely impinges on a company's cash flow and profitability during the depreciation ... Read Full Answer >>
  5. When do I need to project run rates for my business?

    A business might project a run rate if it needs to evaluate potential future outcomes. Common scenarios where a run rate ... Read Full Answer >>
  6. Which types of coverage ratios should I look at when deciding to invest in a company?

    Investors are less likely to rely on coverage ratios than large debtors such as banks. That said, there is value in understanding ... Read Full Answer >>
Related Articles
  1. Taxes

    New Retirement Plan Limits For 2011

    New changes to the law can have a huge impact on your nest egg.
  2. Retirement

    Pension Plans: Pain Or Pleasure?

    Employees have a love/hate relationship with this retirement option.
  3. Retirement

    The Investing Risk Of Underfunded Pension Plans

    Determine the risk to a company's EPS and financial condition resulting from an underfunded pension plan.
  4. Retirement

    Public Pensions, Managers Falsify Investment Returns

    Fraud gives inflated view of many assets performances.
  5. Options & Futures

    Personal Pensions: Repackaging The Annuity

    Discover an investment that can provide a stable income once you've left the work force.
  6. Retirement

    Lump Sum Versus Regular Pension Payments

    If you're about to retire, you may be facing this dilemma soon. Find out what your options are.
  7. Investing

    How To Evaluate Pension Risk By Analyzing Annual Costs

    Learn how to assess whether a company's pension plan is posing more risks than what the footnotes indicate.
  8. Investing

    Financial Gifts For Grads: Kindergarten To College

    If you really want to help your grad preparing for the future, consider a present that supports their long-term goals—an early start to financial planning.
  9. Professionals

    5 Signs That You Have a Lousy 401(k) Plan

    Knowing whether a 401(k) plan is good or not so good is important. This will help participants decide how much to invest and when to demand improvements.
  10. Entrepreneurship

    Why Small Business Owners Need Financial Advisors

    Small business owners are too busy to effectively manage their own money. That's why a financial advisor can be a big help.

You May Also Like

Hot Definitions
  1. Yield Curve

    A line that plots the interest rates, at a set point in time, of bonds having equal credit quality, but differing maturity ...
  2. Productivity

    An economic measure of output per unit of input. Inputs include labor and capital, while output is typically measured in ...
  3. Variance

    The spread between numbers in a data set, measuring Variance is calculated by taking the differences between each number ...
  4. Terminal Value - TV

    The value of a bond at maturity, or of an asset at a specified, future valuation date, taking into account factors such as ...
  5. Rule Of 70

    A way to estimate the number of years it takes for a certain variable to double. The rule of 70 states that in order to estimate ...
  6. Risk Premium

    The return in excess of the risk-free rate of return that an investment is expected to yield. An asset's risk premium is ...
Trading Center