EUROPE - The Association of Consulting Actuaries has urged government to seek further legal certainty on guaranteed minimum pension equalisation because of the £10bn ($16bn) cost to employers.
ACA chairman Stuart Southall (pictured) said an ECJ test case is the only way the government can achieve the legal certainty required to pursue guaranteed minimum pension (GMP) equalisation because of the high cost for employers.
GMPs may be unequal as between men and women because women are entitled to receive their GMP at age 60 compared to age 65 for men and women accrue GMP at a faster rate in order to target equal levels of GMP at age 60. Survivors' benefits are another differential between men and women's GMPs.
Speaking at the annual launch of the All-Party Parliamentary Group on Occupational Pensions, Southall told pensions minister Steve Webb GMP equalisation is unlikely to be achieved while costing employers an estimated £10bn, plus a "significant" implementation bill.
He said: "In the absence of such a test case hard-pressed employers might be spending money they never needed to spend; or worse they might spend considerable sums now, only to find in years to come that they got it all wrong in European law and must spend even more.
"Much as the ACA's members might benefit from all this extra work, I doubt this is an exercise any of us would derive any pleasure from nor indeed get any thanks for."
Southall said the ACA's view is echoed by other pension bodies.
He added: "Aside from one isolated case, I have never known any beneficiary query the possible inequality of GMPs and nor does it seem there is any legal consensus that equality is required by law or even achievable if it is."
Savers are being warned by the Insolvency Service to guard their pension pots from investment scammers and negligent trustees as it winds up 24 companies.
Respondents say they should only be required in certain situations as the system is not broken.
Smart Pension has absorbed more than 6,500 members from the Corporate Pensions Trust (CPT) after its trustees decided not to apply for authorisation.