UK - Pension funds will be able to prevent certain low-paid part-time workers from joining their schemes following a landmark ruling in the High Court.
In a long running legal battle, a part-time school assistant claimed she was the victim of sexual discrimination for being refused entry into the pension scheme.
But, Leicestershire's Uppingham School said it had a scheme that was integrated with the state pension, which meant that employees did not pay contributions on earnings below the lower earnings limit.
As the assistant, Mrs E Shillcock, did not earn enough to reach the lower earnings limit, the school would not allow her to join its retirement benefits scheme.
In October 1997 the pensions ombudsman's office ruled in Shillcock’s favour as it said that this sort of scenario applied disproportionately to women.
But Mr Justice Neuberger upheld the appeal made by the school on two counts.
The judge ruled that denying Shillcock access to the scheme could be justified objectively by the school on the basis that it avoided employees being in receipt of a double pension from both the State and the pension scheme.
He also found that the exclusion of part-timers was fair as the deduction of the lower earnings limit was applied to all employees consistently.
Baker & McKenzie head of pensions department Robert West reasoned: “The court took a very sensible and pragmatic approach to the reasoning for applying this differential in its treatment.”
But Simmons & Simmons partner Monica Ma expressed surprise at the verdict. She said: “All the part-time and sex discrimination cases normally go for the employees.
From the employees' point of view, this doesn’t sound quite right that just because she is a lower earner she doesn’t get a pension.” By Paul Sanderson
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Paul Budgen is set to join financial technology and auto-enrolment (AE) firm Smart Pension as director of business development.
This week's edition of Professional Pensions is out now