Occupational Pensions And Gender-Specific Annuities

by Tim Hackett, Technical Training and Compliance Consultant

I am indebted to Financial member Anthony Etkind for making me catch up on my backlog of reading this week by drawing my attention to the issue of unisex annuity rates and occupational schemes.

It now seems, after clarification from the EU, that unisex annuity rates will NOT apply to occupational schemes, only to private/voluntary/non work-based schemes. This does seem to leave a grey area with regard to workplace contract-based schemes such as GPP though, and there is no clarification on this.

In March last year, the European Court of Justice pronounced that insurers cannot price products based on gender from December 21, 2012.

The EU judgement meant that providers will have to radically change the way they price annuities, life insurance, and health insurance.

The new clarification has confirmed that this ban will not apply to occupational pension schemes. It says: “Some insurance products, such as annuities, contribute to retirement income. The Directive however only covers insurance and pensions which are private, voluntary and separate from the employment relationship, employment and occupation being explicitly excluded from its scope.”

“Equal treatment of women and men in relation to occupational pensions is covered by Directive 2006/54/EC of the European Parliament and of the Council of 5 July 2006 on the implementation of the principle of equal opportunities and equal treatment of men and women in matters of employment and occupation (recast).”

This might be another reason to revisit any occupational scheme clients that you have, bearing in mind that this will include EPPs and SSAS where this might become an important reason for schemes NOT to be wound up and transferred.

As always the Pensions team will be pleased to help with any cases that you might have.
tim.hackett@financial.ltd.uk