Amending regulations have been put before parliament in a bid to sort out the problems the new age discrimination regulations have caused pension schemes.
Although the age discrimination legislation came into force on 1 October, it was realised the aspects relating to pensions were particularly problematic and their implementation was postponed until 1 December. Under EU law, the legislation as a whole must be implemented by 2 December.
The postponement was to allow businesses, trustees and trade unions additional time to adjust and to allow for an informal consultation period – it’s as a result of the extra consultation that the Department for Work and Pensions (DWP) has tabled the amending legislation.
As many acceptable rules and practices would have been caught by the regulations, the amendments provide a range of exemptions.
The age discrimination regulations do make provisions for ‘objective justification’ but this would have meant every pension scheme would have had to set out its justifications and there would have had to be a number of test cases before the courts to see which were allowable.
For example, the regulations prevent companies from allowing existing members of pension schemes to continue accruing rights in sections of schemes not available to all employees.
Although the regulations have to be in place by 2 December, the DWP has announced it is attempting to introduce a ‘compliance window’ which will give employers and trustees extra time to adjust.
John Cridland, deputy director-general of the CBI, said: “We are relieved the government responded to our concerns about the previous set of regulations concerning pensions and age discrimination.
“They would have been an administrative nightmare for employers and ultimately left many employees, especially older workers, worse off.
“But employers now face an impossible challenge to implement the new rules by the end of the month. It is vital that ministers deliver on their intention to give employers more time to comply with the regulations by extending the deadline beyond December 1.”
The DWP has announced that it will also be issuing revised guidance to help pension schemes deal with age discrimination.
