Part-time ruling could cause an administrative backlog

Employers may be hit by an administrative nightmare following a recent
ruling in the House of Lords allowing part-time workers to claim backdated
pensions.

The ruling follows a test case heard by the European Court of Justice in May
2000 when 22 claimants successfully challenged UK legislation which imposed a
two-year limit on backdated claims. The latest decision, in Preston v
Wolverhampton Healthcare NHS Trust, means that part-time workers, who were
denied access to company plans before 1994, will now be able to claim backdated
pension rights as far back as 1976.

The decision means that the 60,000 existing claims that had been held in
abeyance while the Lords considered the matter must now be resolved.

Fears that employers would be inundated by fresh claims have been largely
allayed by the fact that only those still in employment or who have claimed
within six months of service ending will be eligible.

Susie Farr, solicitor at Pinsent Curtis Biddle, said, "Employers will
be thankful for the small mercy that the House of Lords’ decision on the
limitation period was in their favour but this may be little consolation given
the size of their potential liability in relation to successful claims brought
within the time limit."

It is also thought that those wanting to establish retrospective membership
of contributory schemes will be put off making a claim because they would first
have to pay the outstanding contributions. However, the biggest headache for
employers will be the time and effort required to plough through part-time
employee’s claims.

Employment lawyer Andrew Chamberlain of Addleshaw Booth & Co, said,
"A concern for employers will be the administrative burden and the fact
that many companies may not have records going back to 1976, which will make it
very difficult to calculate an individual’s entitlement."

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