Age Discrimination: Basics


The UK implemented the age discrimination aspects of the EU Equal Treatment Directive with effect from 1 December 2006 in relation to pensions.  The relevant provisions are now set out in the Equality Act 2010.  The default retirement age (DRA) of 65 was abolished from 1 October 2011.

It is unlawful for employers and trustees of occupational pension schemes to discriminate both directly and indirectly because of age, subject to certain exemptions and the ability to objectively justify certain treatment (see below).
The relevant forum for complaints relating to pension schemes is the Employment Tribunal or the PO.

What does this mean for pension schemes?

Key concerns for sponsoring employers and trustees are likely to include the following:

  • early retirement benefits
  • benefits accrued after normal pension age
  • schemes which provide different levels of contributions

What should be done if there is potential discriminatory treatment?

If potential age discrimination is identified, the next step will be to check if the discrimination is exempt from the application of the Directive or the Act, or whether it can be justified.

Justification can apply to both direct and indirect discrimination.  The regulations state that there is objective justification if the treatment is “a proportionate means of achieving a legitimate aim”.  This can be difficult to prove and an objective justification solely based on avoiding an increase in employer cost is unlikely to be sufficient.