The Equality Act 2010 is set to come into force on 1 October 2010. The Act consolidates anti-discrimination legislation, including the anti-age discrimination provisions (and pensions exemptions) currently set out in the Employment Equality (Age) Regulations 2006 (the "Age Regulations").

Key points in relation to pensions are as follows:

  • Age discrimination exemptions are replicated. Schedule 2 to the Age Regulations contains an extensive list of exemptions relating to occupational pension schemes (and to certain age-related contributions to personal pension schemes). These exemptions broadly allow occupational pension schemes to operate as they did prior to the anti-age discrimination provisions coming into force. These exemptions are replicated in the Equality Act.
  • No change to the concept of objective justification. Age discrimination will continue to be lawful if it can be objectively justified (that is, is a proportionate means of achieving a legitimate aim).
  • Extension of non-discrimination rule. At present, a non-discrimination rule (covering age, disability, religion/belief and sexual orientation) is implied into the rules of all pension schemes. Following the commencement of the Equality Act, this non-discrimination rule will be extended to include gender re-assignment, marriage/civil partnership and sex.

In addition, the Pensions Act 1995 provides that men and women must be treated equally in respect of the terms on which they may join the scheme and how they are treated once they are members. This so called "equal treatment rule" is replicated in the Equality Act.

  • Trustees will have an overriding power to make non-discrimination alterations to rules by resolution. This will apply where the scheme's amendment power is too restrictive to allow changes to be made and also where the power to amend exists, but the procedure for making the change is liable to be "unduly complex or protracted" or involves "obtaining consents which cannot be obtained or which can be obtained only with undue delay or difficulty". These non-discrimination resolutions may also have retrospective effect.

Action required: No new action is necessary, as the fundamental principles have not changed. There continues to be a need generally to monitor compliance with the anti-discrimination requirements. Employers and trustees should consider whether provisions and the exercise of discretions judged to be objectively justifiable in 2006/7 remain so, particularly in light of EAT and Court decisions in this area, such as Kraft Food v Hastie [2010].