Pension schemes are covered by the Equality Act 2010 which makes it unlawful to discriminate against employees because of their age.

State pensions, pension sharing orders and annuities from insurance companies are not covered by the act.

Key aspects:

• it is unlawful for occupational pension schemes to discriminate on the basis of age;
• it is unlawful for employers to discriminate in relation to pensions on the basis of age;
• discrimination can only be lawful if one of the specific exemptions apply or if it can be objectively justified;
• trustees must not apply any discriminatory rules under their scheme and are given powers to amend any scheme rules that are in conflict with the regulations; and
• workers who suffer discrimination on grounds of age in respect of pensions can bring a claim to an Employment Tribunal against the trustees/managers and/or employer.

Discrimination can be legal if one of the following exemptions applies:

• Direct discrimination – Occurs when the trustees/managers or employer treats a work less favourably than other works on grounds of the worker’s age.
• Indirect discrimination – Occurs when a rule, practice, action or decision which is apparently age neutral is in fact disadvantaging works of a particular age,
• Length of service – This permits employers to operate qualifying periods for occupations schemes before they can join the scheme, eg 3 months. It also applies for different accrual rates for length of service in the scheme.