- This note is primarily focussed on the sex discrimination issues which have arisen in relation to occupational pension schemes (rather than personal pension schemes), because this is where most of the sex discriminatory practices have been identified.
- The Equality Act 2010(the "Act") applies to both employers participating in occupational pension schemes and the trustees of such schemes. The Equality Act 2010 also inserts an overriding non-discrimination rule into occupational pension schemes if they do not already contain such provision.
- Under the Act, persons (including trustees of pension schemes) are prevented from directly or indirectly discriminating, victimising or harassing someone because of their sex.
- The key cases of Barber v Guardian Royal Exchange and Coloroll Pension Trustees Limited v Russell established that pension schemes had to equalise pension benefits between men and women, with effect from 17 May 1990 (i.e. the date of Barber decision), and outlined how they should equalise them.
- Specifically, men and women were required from this date to build up benefits by reference to the same Normal Retirement Date ("NRD"). Before this, women typically had an NRD of 60 and men an NRD of 65. This difference in NRD meant that, in broad terms, men were required to work for longer than women in order to build up an equivalent pension.
- Many pension schemes have a gap between the 17 May 1990 (when they were legally required to equalise benefits for both sexes) and the date that a legally valid equalisation of the pension benefits was actually effected. This is known as a 'Barber window'. The main reason many schemes have a 'Barber window' is because there was a lack of clarity for a number of years as to how pension schemes were required to validly equalise.
- Equalisation of Guaranteed Minimum Pensions ("GMPs") was not addressed in the Barber case and remains a difficult area.
- Much of the case law and legislation referred to in this note involves European directives and rulings by the European courts. The requirement to equalise pension benefits between the sexes it is not expected to materially change following the UK's withdrawal from the European Union.