A High Court ruling has spared employers from
paying a potential £15m in pensions costs.
The ruling overturned an ombudsman’s decision that
found that guaranteed minimum pensions (GMPs) – the elements of occupational
pensions that replace state benefits – discriminated against women.
GMPs sometimes pay more to either sex depending
on pension conditions and the person’s age.
If the ruling had stood, employers could have
faced heavy pensions costs and the burden of extra administration.
In Ian Williamson v Sedgwick Group Trustees,
the judge overturned an ombudsman’s decision that GMPs contravened European
legislation.
The judge said that “the scheme pension is one
indivisible pension”, supporting the view that GMPs form only part of an
occupational pension and are not subject to equal treatment rules by themselves.
"The case is significant as it affects
several thousand employers and everyone in contracted-out occupational pension
schemes – about 10 million people," said Adrian Lamb, head of legal
consulting at William M Mercer.
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