The majority of principles that existed have been maintained from the previous legislation, but there are some extensions and new parts, mainly related to non-pension aspects of the law. Many of the previous regulations have been fully or partially revoked to make way for these replacement rules.

As discrimination legislation has been implemented over a number of years in the past, only benefits accrued since the specific anti-discrimination law was enacted are subject to the protection granted by it. This act maintains that approach and does not change any effective dates retrospectively.

The Act came into force on 1 October 2010.

The key aspects covered are defined and termed‘Protected Characteristics’. These include:

• age
• disability
• gender reassignment
• marriage and civil partnership*
• pregnancy and maternity
• race
• religion or belief
• sex
• sexual orientation.

This analysis focuses on the implications for pension provision and does not go into the wider areas that the legislation impacts. Those particularly relevant to pensions that the Act provides for are:

• To extend the circumstances in which a person is protected against discrimination, harassment or victimisation because of a protected characteristic.
• To enable an employment tribunal to make a recommendation to a respondent eg an employer who has lost a discrimination claim, to take certain steps to remedy matters not just for the benefit of the individual claimant eg an employee (who may have already left the organisation concerned), but also the wider workforce which could include such aspects as eligibility to join the scheme.

The definition of an occupational scheme used by the Act on strict interpretation does not include death benefit only schemes. However, such benefits are likely to be covered by this legislation by virtue of other provisions, so are not expected to be exempt from the legislation.

Non-discrimination rule

Every occupational pension scheme is to have a non-discrimination rule applied to it. The rule prevents a scheme trustee/manager or an employer from discriminating against, harassing or victimising a member or a person who could become a member of the scheme.

The rule does not apply to pension rights built up or benefits payable for periods of service before the commencement of this section of the Act on 1 October 2010. Periods of service prior to this date will be subject to the previous discrimination legislation.

Where there has been a breach of a non-discrimination rule, proceedings may be brought against the person responsible for the breach. Pension credit members are not protected from discrimination because their rights are derived from an order of the court, rather than directly from employment. However, a disabled pension credit member has the right to communications on the same basis as a disabled deferred or pensioner member of an occupational scheme, with regard to the provision of information and the operation of a dispute resolution procedure in line with previous legislation.

The Act establishes non-discrimination rules in respect of race, gender reassignment, marriage and civil partnership, and sex, in addition to the rules already in place in respect of age, disability, religion or belief and sexual orientation. There will be exemptions for practices or decisions made in relation to age by the scheme trustee/manager or an employer, for example minimum and maximum ages for joining a scheme, or a minimum age for drawing retirement benefits.

These reflect the measures set out in the Employment Equality (Age) Regulations 2006 which have been almost entirely revoked when the Act came into effect on 1 October 2010. The trustees/managers of an occupational pension scheme are granted the power, by resolution, to alter their scheme's rules to conform to the non-discrimination rule if they lack powers to alter the rules for that purpose, or procedures for altering the rules, including obtaining consent from scheme members, are unduly complex or would take too long.

Sex equality rule

Every occupational pension scheme is also to have a sex equality rule applied to it. This rule requires that people are treated equally to comparable members of the pension scheme irrespective of gender. This covers the terms which apply for joining the scheme and subsequent treatment as scheme members.

The rule does not apply to pension rights built up or benefits payable for periods of service before the Barber Judgement which took effect on 17 May 1990. With regard to eligibility to join a scheme the rule has effect from 8 April 1976 due to the court case of Defrenne v Sabena, where it was ruled that the principle of equal pay should not be applied to service prior to that judgement.

Where there has been a breach of a term modified by a sex equality rule, proceedings may be brought against the person responsible for the breach.

The trustees/managers of an occupational pension scheme are granted the power, by resolution, to alter their scheme's rules to conform to the sex equality rule if they lack powers to alter the rules for that purpose, or procedures for altering the rules, including obtaining consent from scheme members, are unduly complex or would take too long.

Maternity equality rule

A maternity equality rule is introduced into all occupational pension schemes by the Act. The effect of the rule is that when a woman is on maternity leave, this time should be treated the same as when she is not. In particular this relates to any rule of an occupational pension scheme which can be applied in respect of scheme membership, accrual of scheme rights and determination of benefits.

Any discretion that can be utilised under the scheme rules, which could allow treatment of the length of time a woman is on maternity leave to differ to when she isn’t, is prevented from being exercised in this way.

Any personal contributions made by the scheme member need only relate to her actual rate of pay when she is on maternity leave, ie they can be reduced in line with this.

These regulations only relate to times on ordinary maternity leave where the expected week of birth was on or after 6 April 2003 and in relation to any unpaid additional maternity leave where the due date was on or after 5 October 2008. Whilst on any unpaid additional maternity leave there is no entitlement to the accrual of scheme rights.

Where there has been a breach of a term modified by a maternity equality rule, proceedings may be brought against the person responsible for the breach.

There are certain circumstances where a sex equality rule does not have effect in relation to occupational pension schemes.

In line with prescribed circumstances the payment of different amounts for comparable men and women can be allowed, if the difference is only because of differences in retirement benefits to which men and women are entitled.

The payment of different amounts is permitted, where those differences result from the application of standard actuarial factors to the calculation of employer's contributions to an occupational pension scheme. Payment of different amounts where actuarial factors are applied to determine certain prescribed benefits can also be allowed. This would cover aspects such as different average life expectancies between the genders, taken into account by the actuarial factors used by a scheme to determine employer contributions and the retirement benefits available.
 
There is a regulation making power to vary or add to these circumstances. The regulations may make provision for past periods, but not for pensionable service before 17 May 1990.

However, there appears to be an omission in the regulations for target-funded money purchase schemes with regard to these different employer contributions between male and female members. These may be required to achieve equivalent benefits at retirement, but as yet these prescribed circumstances have not been laid in order to permit this practice.

The Act provides a power to specify practices, actions or decisions relating to age in respect of employer contributions to personal pension schemes that an employer can use without breaching a non-discrimination rule.
 
Age related exceptions to the non-discrimination rule in respect of employer contributions to personal pension schemes were previously set out in Schedule 2 to the Employment Equality (Age) Regulations 2006 (S.I. 2006/1031). Again the new rules reflect these previous measures.

However, there is still uncertainty as to the employer’s liability to make contributions to a personal pension scheme during maternity leave.

* As defined by the Civil Partnership Act 2004