Pensions Age Discrimination Deadline Unfair, Says Top Yorkshire Lawyer

Pensions age discrimination

30.11.2006

A top Yorkshire lawyer has criticised the government's tight deadline for businesses to comply with new pension age discrimination regulations, saying it will leave many companies in the region at risk of legal action.

Nigel Bolton, of national law firm Irwin Mitchell, based at its offices in Queen Street, Leeds, urged Yorkshire businesses with occupational pension schemes to check their relevant provisions and amend them where appropriate, to avoid potential tribunal action after the Employment Equality (Age) Regulations come into force on December 1.

Previously due to be implemented in October, the government delayed introducing the legislation until the end of this week, so it could be amended, but only revealed full details on November 16, leaving just two weeks for businesses to comply.

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Mr Bolton said: "The regulations are Labour's interpretation of the European Employment Directive, which must be implemented by December 2.

"But the government, knowing they couldn't move this date, has continued to deliberate, eating into the time available for businesses to comply."

Mr Bolton said, in the event, the government announced some 11th hour improvements to the original rules, which would have made certain common practices illegal. The provisions could have meant occupational pension contributions for older workers being cut, forced employers to reduce the pensions of many staff taking early retirement and even led to schemes closing.

As it turned out, employers would be able to continue paying higher contributions for older workers without risking actions over age discrimination.

But Mr Bolton added: "Welcome as these changes are, it's still disappointing the regulations don't include guidance on flexible retirement arrangements, which are popular with many businesses and employees.

"They allow workers, after consultation with their companies, to retire early or continue working past retirement age, if they wish.

"Pension schemes are inherently discriminatory, as - by necessity - they contain many age-based rules. Striking the right balance between protecting the rights of individuals and allowing businesses to operate productively is important, and some clarity on this subject would have been advisable."

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Mr Bolton said the regulations meant Yorkshire employers must now review their age-based rules urgently, consider whether they were exempt or objectively justified, and change them if not. He said the wording of some sections, such as those covering death benefits to children and early retirement on unreduced amounts, would need careful review, as some practices would no longer be acceptable.

He said: "Overall, giving businesses just 12 working days to consider the potential impact of the regulations, identify discriminatory areas and take measures to resolve them is unreasonable and wholly unfair.

"We're now working round the clock to help our clients ensure they comply by December 1."

An estimated 350,000 Yorkshire people have occupational pension schemes, with the average employer contributing 10 per cent of member's salaries in open defined benefit schemes and five per cent in open defined contribution plans.

Businesses concerned about how these regulations will affect their occupational pension schemes can contact Mr Bolton on 0370 1500 100.