Can a pension scheme retroactively change pension entitlement to prevent discrimination between women and men?
No, held the CJEU in Safeway Ltd v Newton.
The Safeway pension scheme initially had different ages at which men and women were entitled to take their pensions (65 and 60 respectively). After the decision in Barber v Guardian Royal Exchange that this was sex discrimination, Safeway announced that it would make the retirement age for all members was 65 as of 1st December 1991. The Court of Appeal found that this was not properly done until 1996, but that it was possible that women who had contributed and already retired at age 60, might have their entitlements reduced to reflect the fact they had worked for a shorter period than men who retired at 65.
The CJEU decided that this was not possible as a matter of EU law. Although it was not permitted to have any form of discrimination for a 'transitional period' it was equally the case that there had to be a degree of legal certainty about accrued rights. The CJEU decided that retrospectively amending accrued rights in order to avoid discrimination was in breach of that certainty. The only exception to this rule for pension schemes is:
"...it is possible that measures seeking to end discrimination...may, exceptionally, be adopted with retroactive effect provided that...those measures are in fact warranted by an overriding reason in the public interest...[T]he risk of seriously undermining the financial balance of the pension scheme concerned may constitute such an overriding reason in the public interest."
Thanks to Matthew Jackson of 10 KBW for preparing this case summary.
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