The pension provisions within the new age discrimination laws require “major surgery rather than a minor operation”, according to a leading expert.
Last Friday, the government agreed to reassess how age discrimination rules will be applied to pension schemes, and delay implementation until 1 December.
Dr Deborah Cooper, a principal at HR consultancy Mercer, said: “We have gone to great lengths to explain the difficulties of applying age regulations to pension schemes. It is a shame the announcement to reassess the regulations was made at the eleventh hour, as some pension schemes may have spent a great deal of money trying to comply with the initial proposals.
“We hope the government will take this opportunity to establish a sensible set of rules that pension schemes can work with, rather than just tinker with the existing set of regulations.”
The previous proposals involved exempting certain pension scheme practices in a selective and ambiguous way. For example, schemes would have been required to review their arrangements relating to early and late retirement, and revise rules which state employees have to wait for a certain period of time before joining a scheme.
The Department of Trade and Industry guidance intended to clarify the effect of the regulations with regard to pension schemes was also unhelpful, Cooper said.
“The regulations require major surgery rather than a minor operation,” Cooper said. “The government should largely exempt pension schemes from the age discrimination regulations, rather than attempt to exclude specific rules that may only apply to some schemes. It can then target the few scheme rules and practices it feels should not be permitted.”