L>Fraser Sparks - Pensions partner, Hammonds

1. To date, EU case law concerning compulsory retirement ages is of interest to UK pension schemes, but it has not been directly relevant. We have seen that the European Court of Justice (ECJ) is prepared to accept, in certain situations, that a compulsory retirement age in Spain can be justified. While this is heartening to most UK employers and may give an indication of how the Heyday case is likely to be viewed by the ECJ, we need to wait for the outcome of the case before we know where we are in the UK.
2. This will very much depend on the question being decided on by the case. In some instances, a judgment will directly affect UK schemes (for instance, the Barber and Coloroll judgments in relation to the equalisation of retirement ages), whereas in other instances a judgment may only give an indication of how the ECJ is likely to tackle a particular issue of relevance to the UK.
3. More discrimination cases. Recent cases have led some commentators to suggest that the UK’s approach to civil partnerships may not comply with EU law. The argument is that equal treatment is a fundamental European right and so national legislation should not prevent the backdating of such equal treatment. We need to wait and see, but there must be some chance that, if challenged, UK legislation might have to change to provide civil partners with exactly the same status as spouses for pension scheme purposes.

Mark Radley - Senior associate, Mercer

1. The Palacios case appears to support the imposition by state of a fixed retirement age. However, this is probably due to the specifics of the case and it could actually signal quite the reverse. Following Palacios, any state fixed retirement age must be objectively justified.
   The age discrimination regulations continue to be of greatest relevance to UK schemes; in particular the detailed exemptions for pension schemes. The problem is in deciding if they fit a client’s circumstances and whether the proposed practice can be objectively justified.
2. In the Heyday case, the British government justifies a fixed retirement age of 65 by saying that many employers rely on a fixed retirement age as part of their retirement planning. They also state not having a fixed retire-ment age is best practice. In light of the Palacios decision, this attempted justification may be an own goal. If the Heyday case is successful then UK schemes will not be able to impose a fixed retirement age on members.
3. It was ruled in Maruko and Bartsch that discrimina-tion cases should not be subject to time limits. This is contrary to previous ECJ discrimination cases affecting UK pension schemes, for example Defrenne. Until now scheme trustees and their sponsors have only had to worry about age discrimination claims going back to December 1, 2006. These cases suggest claims could go back decades.

Faith Dickson - Partner, Sacker & Partners

1. These claims are more of an employer issue in the first instance. Schemes will be impacted in practice if the result is more people working beyond age 65. If this happens, schemes will need to adapt to letting members build up pension and death benefits for longer.
2. Since the Barber decision that pensions are pay for the purposes of EU discrimination laws, pension schemes have been in no doubt that ECJ decisions have a direct bearing on them. It’s costly to schemes to ignore what’s going on in Europe.
3. A recent case on benefits for same sex partners (Tadao Maruko), and one earlier this year on transfer values (Lindorfer).
   In Tadao Maruko, the ECJ saw no reason why a same-sex partner should not receive the full pension a spouse would, leaving the question whether there should be any time limits on backdating discrimination claims. The ECJ may be looking at different types of cases on their merits. Put bluntly, the economic costs of having no time limits in Barber may have convinced the ECJ to impose limits, whereas the costs of providing benefits to same sex partners are perhaps less compelling.
   In Lindorfer, an EU employee successfully claimed her transfer value should not have included sex-based factors. This seems at odds with other cases in this area, but may signal it’s time for schemes to consider the appropriateness of factors more generally.

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