The EU regulatory framework currently impacts on UK pension schemes in a number of ways.
The Equality Act 2010, which aims to implement the requirements of the EU Framework Directive on discrimination, prohibits pension schemes from discriminating on grounds such as a member's sex, age, sexual orientation and religion. Many pension schemes have amended their rules to comply with these requirements and in some cases provide more generous benefits than the minimum required by legislation.
The Cross-Border Regulations, which implement the requirements of the IORPS Directive 2003/41/EC, subject UK cross-border schemes to more stringent funding requirements than UK schemes that do not operate cross-border and require such schemes to be approved by the Pensions Regulator. The Pension Protection Fund (PPF) provides compensation to members of schemes that provide defined benefits where the employers have become insolvent. There are concerns over whether the level of compensation provided by the PPF complies with the minimum required by the EU Directive 2008/94/EC on the protection of employees in the event of insolvency of their employer.
If the UK were no longer subject to these Directives, it would have a freer hand to legislate in these areas, the precise impact on pensions depending on the extent to which domestic legislation in these areas is changed prospectively, and possibly though this seems unlikely, retrospectively.
Another key area that could impact on UK pensions is the extent to which the UK courts will continue to follow the CJEU's rulings on pensions over issues such as discrimination, taxation and the compensation provide by the PPF.