10 July 2006
New age discrimination regulations will have a much greater
impact on pension schemes than originally anticipated, and many
employers will face significant extra costs to ensure their schemes
are compliant, according to Mercer Human Resource Consulting.
The Employment Equality (Age) Regulations, which are part of a
European Directive, are due to come into effect in October. Mercer
believes that unless they are revised, they could discourage
companies from providing occupational pensions, even defined
contribution arrangements, for their employees.
Companies with defined benefit schemes will have to review their
arrangements relating to early and late retirement, and revisions
might also be needed to any schemes that only let employees join
following a waiting period. For employers with defined contribution
schemes, age-related contributions could cause a problem. Although
these contributions appear to be exempt under the regulations, the
exemption only applies in limited circumstances
