Pension trustees look set to get more leeway on age discrimination rules following a move by the Department for Work and Pensions.The regulations have raised concerns among employers and trustees that they could be breaking the law and leave themselves open to legal action simply by making age-related contributions. Stakeholders successfully lobbied for a two-month delay to the rules applying to pensions, meaning they will now come into force in December. The DWP proposes to allow trustees to provide different benefits based on length of service. The difference must be justified where the member has more than five years service. This previously applied to cover employers but has now been extended to cover trustees also. The DWP suggests allowing targeted pensions where employers aim to have all members leave on the same level of benefit. This was not previously allowed but the new regulations allow different accrual rates which aim to provide the same fraction of salary as a pension. Under the plans, employers can choose not to make reductions if benefits are paid on early retirement and can also enhance benefits by providing additional years of pensionable service. The exemption for paying bridging pensions has been extended to cover women as well as men. There are also a number of new exemptions for personal pension schemes. These allow personal pensions to have a minimum entry age, and also exempts personal pensions where the employer pays the same contribution for all staff. Responses from the industry to the consultation paper have to be in by October 20. The DWP says it is amending the Department for Trade and Industry guidance on the impact of age discrimination on pension schemes and will consult on the changes shortly. Standard Life marketing technical manager Andy Tully supports the proposed changes but says occupational schemes with different contributions for different age groups will need to prove they are trying to make benefits equal or more equal. He argues that employers will need actuarial guidance and many will move away from tiered-contribution schemes altogether. Tully says: “The DWP has recognised that if it did not include further exemptions, schemes would decide that the legal and financial risks of continuing to provide some benefits were too great and consequently employers would either level down or remove benefits entirely. “However, the exemptions still do not cover a number of commonplace scheme arrangements so employers and trustees will need to move quickly once these changes are finalised to ensure that their scheme is not guilty of age discrimination.” Scottish Life head of pensions strategy Steve Bee says: “All these proposals sound very sensible and I am sure that they will be welcomed by trustees but they do not address the problems of employers levelling up or levelling down schemes.” Gino Rocco, a specialist pension solicitor at Beachcroft, says the financial services industry has not been given enough time to comment on the proposals and predicts that the Government will fail to implement rules by the December 1 deadline required under the European legislation.