Employers which offer occupational pension schemes or pay into employees’ personal pensions, including stakeholder plans, will need to review their arrangements to ensure they do not fall foul of the new Employment Equality (Age) Regulations 2006.
The new regulations, which have been drawn up in order to stop age discrimination in the workplace, were published last month and are due to come into force on 1 October.
They include a number of exemptions which allow employers and trustees to make contributions linked to age, provided that they do not result in employees receiving unequal benefits in the long term.
Simon Tyler, pensions senior associate at Pinsent Masons, explained: "If you put a contribution into a pension scheme when you are very young, you have got all of those years in the future to get interest and investment returns. If you are 60 and you put in the same amount, the benefit you get from the same contribution will be less."
Employers should examine the regulations in detail particularly in relation to the impact they may have on any early and late retirement policies and packages, added Tyler.
"There are lots and lots of exceptions and, at first glance, you’ll look and think ‘oh wonderful, they cover all these things’, but with time people will identify more areas that the exceptions don’t apply to," he warned.