Last month’s Pensions Update item on the abolition of the default retirement age from 6 April 2011 noted that an exception to the principle of equal treatment on the grounds of age is to be introduced for group risk insured benefits provided by employers. We have now seen the draft regulations, which widen the current exemption to allow the provision of “insurance or a related financial service” either only until age 65 or higher state pension age or only after that age. However, as currently drafted, the exemption appears only to apply where the employer is making the insurance arrangements, not the trustees, whose responsibility this would normally be. It is to be hoped this will be clarified in due course.
In relation to the transitional period which BIS has always said will end on 1 October 2011, the draft regulations appear to contain an error, extending the period until 5 April 2012 or possibly even later in certain circumstances. It is therefore not clear what is now intended. Until the final regulations are available we consider it safest to proceed on the assumption that retirements should take place by 1 October 2011.