Legal & General pensions strategy director Adrian Boulding has accused the Treasury of “hiding under the table” on gender equalisation for occupational defined-contribution pensions after it decided not to legislate to prevent insurers offering different annuity rates for men and women.
A European Commission document, published in December, first suggested that the ban on gender pricing in insurance contracts would not be extended to occupational schemes.
This led to calls from pension experts for the Government to clarify whether occupational schemes would be covered, amid fears over the creation of a “secondary” annuity market targeting occupational DC schemes.
These included calls to extend the Equality Act to cover work-based schemes as well as personal pensions.
The Government’s response, published last week, says: “We acknowledge the concerns of those who believe that the judgment will result in a two-tiered annuity market and that such a market will be detrimental to consumers and industry.
“On this issue, whilst we remain concerned about negative impacts of the judgment we do not feel there is sufficient evidence at this stage to justify extension of the requirement to provide gender-neutral pricing of annuities to work-based pension arrangements as well as personal pensions.”
The document goes on to say that if there is evidence of detriment to consumers the Government will consider further action.
Boulding says: “I think the Treasury is hiding under the table on this issue. It could extend the Equality Act to require money-purchase schemes to offer unisex annuities but it is clear that it would rather not do that. Instead it is hoping that the industry will solve the problem by offering unisex rates across the board so it does not have to intervene.”
Better Retirement Group director Billy Burrows says: “Not adopting gender neutral pricing just because someone happens to be in a work-based scheme, is ludicrous. The last thing our pension system needs is even more complexity.”