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Government will not apply gender neutrality to occupational schemes

Treasury 480

The Government says it will not look to extend the requirement for gender neutrality to occupational defined-contribution annuity business, despite concerns about the creation of a two tier annuity market.

However, a Government response to the European Court of Justice gender ruling, published today, says the matter will be kept under review and action would be taken if consumer detriment was shown.

A European Commission document, published in December last year, suggested 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 of 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 response 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 consumer detriment then the Government would consider any further action.

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Comments

There are 6 comments at the moment, we would love to hear your opinion too.

  1. David Parkinson 18th July 2012 at 11:09 am

    So it’s ok to punish the self employed or non occupational based person but not to burden employers? Why don’t we just tell Europe to take a hike and retain the current system which reflects true mortality & not silly ideals on equality & gender. Sick & tierd of hearing idealistic hippies on all fronts.

  2. Peter Davies @ Create Wealth Management 18th July 2012 at 11:47 am

    This will create consumer detriment – just what is the European Court of Justice thinking of. This is another case of European laws affecting the UK. I cant wait for the referrendum to take place.

  3. Larry in London 18th July 2012 at 12:01 pm

    I agree with anon @ 11:09. The less involvement we have with Europe the better. TGFTEC (Thank God for the English Channel).

  4. Anonymous at 11:09
    There’s nothing wrong with idealistic hippies, as long as they are not stupid hippies. Which means I completely agree with the rest of your comment.

    This decision must have been made by someone with a multiple personality disorder.

  5. Garry - Woking 18th July 2012 at 8:10 pm

    This decision will also be detrimental to those employees whose employers funded personal pension arrangements instead of an occupational pension.

    This is far from alevel playing field!

  6. This is ludicrous! This means males in personal pensions will be disadvantaged, due to their shorter life expectancy once annuities are priced for a notional longer life expectancy. Meanwhile those males in DC schemes will be off the hook! Expect lots of PP transfer-ins to DC.

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