The Government is facing growing pressure to deliver clarity on how pension schemes should go about equalising guaranteed minimum pension payments between men and women.
GMPs are the minimum level of pension an occupational scheme must provide to people who contracted-out of Serps between April 6, 1978 and April 5, 1997.
Following a European Court of Justice’s ruling in the Barber case on May 17, 1990 trustees of pension schemes have been required to pay men and women comparable benefits in relation to service from the judgment date.
ACA chairman Stuart Southall says “virtually all schemes” ignored sex inequalities that existed concerning the calculation of GMPs.
He is calling the Government to bring an ECJ test case to give schemes “legal certainty” on how to equalise GMPs.
He says: “Aside from one isolated case, I have never known any beneficiary query the possible inequality of GMPs nor does it seem there is any legal consensus that equality is required by law or even achievable if it is.
“If Government feels it has to press ahead with an initiative which could cost industry £10bn plus a significant implementation bill then would it not be best to do so with as much legal certainty as possible?
“This can only be achieved by an ECJ test case.”
In January 2010, former pensions minister Angela Eagle told schemes they would need to make specific adjustments to benefits to compensate members for the unequal effects of GMPs.