The Equality Bill was introduced into Parliament on 27 April 2009. The Bill has two stated main purposes:

  • to harmonise discrimination law; and
  • to strengthen the law to support progress on equality.

The majority of the provisions of the Bill which may impact on pension schemes are covered by the first aim - essentially it is a consolidation of discrimination law with the current statutes and regulations being repealed and a new statutory structure introduced. It is understand that there is no intention to change substantively discrimination law as it currently applies to pensions. The legislation contains a list of "protected characteristics" which are then subject to protection from discrimination, harassment and victimisation in specific areas - including pensions.

Protected characteristics

The protected characteristics are:

  • age - by reference to a particular age or to a range of ages
  • disability - a physical or mental impairment having a substantial and long-term adverse affect on the ability to carry out normal day to day activities (guidance may be issued on what can be taken into account when determining if someone is under a disability)
  • gender reassignment - someone proposing to undergo, is undergoing or has undergone gender reassignment
  • marriage and civil partnership
  • pregnancy and maternity
  • race
  • religion or belief
  • sex
  • sexual orientation

Occupational pension schemes

An occupational pension scheme must be taken to include a non-discrimination rule by virtue of which the "responsible person" must not discriminate (directly or indirectly) in the carrying out of any of his functions in relation to the scheme. "Responsible persons" include trustees and employers. According to the explanatory notes, the new provision does not apply to "pension rights built up or benefits payable for periods of service before the commencement date" but this is not made clear on the face of the Bill.

Some points of interest we have identified in the current draft of the Bill are:

  • Exemptions to the non-discrimination rule relating to age may be specified by order. Consultation is required on any new exemptions which are not in use before any order comes into force. We would therefore expect that, at least initially, the current exemptions will stand.
  • The sex equality provisions in the Bill are similar to the current requirements. If an occupational pension scheme does not include a sex equality rule, it is to be treated as including one. The Bill includes a power for the trustees, by resolution, to make sex equality alterations to the scheme. The sex equality rule will not apply where the trustees can show that the difference in treatment is because of a material factor which is not the difference of sex. Apparently the Bill incorporates EC law in respect of objective justification of indirect discrimination - but as drafted this does not apply to sex equality in pension schemes - leaving pension trustees only with the "material factor" defence in sex equality cases and not an objective justification defence.
  • Pension credit members are excluded from protection because their rights are derived from orders of the court rather than employment rights.
  • Non-discrimination rules are already in place in relation to age, disability, religion or belief and sexual orientation. The Bill adds a requirement for a non-discrimination rule in respect of gender reassignment and marriage and civil partnerships.
  • In relation to marriage and civil partnerships the Bill does not give non-married partners the right to the same benefits as married partners - clause 13(4) requires that the less favourable treatment must be because someone is married or a civil partner (not because someone is not married or a civil partner). Essentially this would still allow schemes to offer those who are married or in civil partnerships benefits not available to those not married or in civil partnerships.
  • There is no overriding power for trustees to modify the scheme to comply with the non-discrimination rule (other than in relation to sex equality). If this remains the case then this will be removing a power trustees currently have (for example under the Age Regulations trustees have the power to modify schemes in order to comply).


A new requirement in the Bill is that a service provider must not discriminate on the terms on which it provides a service. This will include insurance companies. The new provisions will not apply to existing insurance policies entered into before the date of commencement. There is an exemption in relation to disability where the discrimination is relevant to the assessment of risk. This would appear to allow insurers both to require medical reports and to set premiums based on the results of those reports.

In relation to sex, gender reassignment, pregnancy and maternity the exemption allows insurers to rely on specified actuarial other data. Any differences in treatment must be proportionate according to the data.

There is currently no exemption in relation to age. This gives the worrying result that insurers cannot rely on age related actuarial data when setting premiums for life or health cover. It is hoped that this is an oversight which will be changed before the Bill is enacted.