International Trade

New Age Of Muddle

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...and late retirement, pension increases, bridging pensions and scheme closures. It is easy to see how these might have appeared to fit the bill. However, the sheer diversity of the pensions industry proved this to be incorrect.

The problem in detail

Particular difficulty arose from the prescriptive nature of the exemptions. Offsets to integrate with the state system and changes to benefits between early retirement and state pension age (bridging) were allowable under the original draft only if they conformed to the prescribed formula. Moreover, the concept of indirect discrimination raised its head so that issues arose even as to whether protections enjoyed by pre-1987 members or dependants’ benefits were affected because, inevitably, these practices have a disproportionate effect on members in certain age groups.

Whilst some of the anomalies identified by critics seemed somewhat fanciful, the sheer weight and number of the potential difficulties was unnerving.

As if this were not bad enough, the Department of Trade and Industry (DTI) issued draft Guidance that seemed at odds with the Regulations and appeared to raise many more questions than it answered.

Struggling for a solution

Faced with enormous pressure from the pensions industry, the only thing that could be done was to postpone the original draft and then substantially redraft it. In this regard, the Department of Work and Pensions is to be commended for getting to grips with what had become a herculean task. In consequence, the

Employment Equality (Age) (Amendment No 2) Regulations 2006 came into force on 1 December 2006.

So what do they do? Unfortunately, at such a late stage it was not possible to move away from the concept of a prescriptive list. Nevertheless, it was recognised that it was necessary to formulate further exemptions. The first of these was to recognise that the fact that a... continued on page three >

 

 

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