On September 18, 2023, draft regulations were laid before Parliament which set out equality provisions applying to occupational pension schemes under the Equality Act 2010 (EqA 2010). They are made under the restatement powers in the Retained EU Law (Revocation and Reform) Act 2023 (REUL Act), which allows "secondary retained EU law" (including directly effective EU Treaty rights) to be restated in regulations and also allows a restatement to use different words or concepts from those used in the original law to resolve ambiguities.
After December 31, 2023, retained EU law will cease to have effect in domestic law. The Government has accepted the outcome of two judgments and is restating them in legislation to provide certainty:
- In Allonby, the ECJ held that a notional opposite sex comparator may be used in an equal pay claim. The requirements in the EqA 2010 and Pensions Act 2004 for there to be an opposite sex comparator in an occupational pension scheme for a member to show sex discrimination have been removed because of legislation concerning guaranteed minimum pensions.
- In Walker v Innospec Ltd the Supreme Court disapplied the legal exemption that permitted a scheme to restrict to periods completed from December 5, 2005 the pensionable service that could be taken into account in calculating survivor benefits for same-sex partners. The restriction in the EqA 2010 will be removed.
Both changes will be effected under the draft Pensions Act 2004 and the Equality Act 2010 (Amendment) (Equal Treatment by Occupational Pension Schemes) Regulations 2023 and will come into force "immediately before the end of 2023".
However, the draft regulations do not cover the Bauer judgment which involved assessing a member’s compensation in relation to a complex “risk-of-poverty threshold”. This means the effect of the judgment will fall away for schemes with assessment dates on or after January 1, 2024. The Government is still considering options on how to address the effects of this judgment for assessment dates falling before the end of 2023.
