More than 300,000 women who worked part-time and were not allowed to join their company pension scheme may now be able to do so. New Regulations passed by Parliament just before the Summer recess have finally put into effect judgements made by the House of Lords and the European Court of Human Rights over the last ten years. Since 1995 all part-time workers have been given equal access to company pension schemes. But it took a series of court cases to establish whether women could join for past service before the law changed in 1995. Under the new Regulations women will be able to backdate their pension scheme membership to when they joined the company – though they cannot backdate it before April 1976.
To take advantage of these rules women will have to fulfil three conditions. First they must have worked part-time at some time between 8 April 1976 and 1995. Second, they must have been denied access to their employer’s pension scheme because they worked part-time. Third, they must still be working for the same employer or have left that employer within the last six months.
It is this last condition that will scupper many claims. It was hoped at one time that the European Court would extend the time limit. But after further proceedings in the House of Lords in 2001 it was held that the six month deadline which applies in the UK was lawful and could not be challenged under European law. The new Regulations finally give effect to that judgement.
Although the new Regulations simply enact various court decisions going back over nearly ten years, the Government Actuary has estimated that they could allow 275,000 more women to exercise their right to join their employer’s pension scheme. That is on top of the 40,000 who have already registered a claim with the Employment Tribunal but which has been held pending the new law.
However, all these 315,000 people face another major difficulty – the cost. Although their employer will have to pay the contributions it would have made to the scheme for the backdated years, employees will also have to stump up the money for the contributions they would have paid. The cost will vary depending on the company and the scheme. In some cases it could cost employees nothing because some companies, including major banks, have a non-contributory scheme. In other words the employer pays all the cost and the employee’s contribution is set at zero. But for many other people the cost of paying contributions going back up to years will be prohibitive even though the benefits that money would buy could be considerable. The Government Actuary puts the average cost for a part-time employee of paying their missing contributions at around £2500, after deducting a small refund which will normally be due from the National Insurance Fund. The typical benefit they would each get has been put at £10,000, though that of course will not be paid until they retire and most of it will then be paid over a number of years as a pension. All these figures from the Government Actuary are what it calls ‘very broad averages’.
Another problem may also be encountered. In order to assess the payments due employers will need pay records going back almost thirty years. Some may not have those records available and already HM Revenue & Customs is receiving enquiries from employers to see what records it holds to fill in the gaps.
Any woman who worked part-time between 1976 and 1995 who was not allowed to join the company pension scheme because she worked part-time should consider if she now has the right to join that scheme retrospectively or extend her current membership back to when she started work for that employer – or 6 April 1976 if that is later. In order to make a successful claim she must normally still be working for the same employer or have left that job no more than six months before making the claim.
The new rules introduce a concession for people who were on a series of short-term contracts with the same employer. Previously it was thought that each contract had to be claimed separately and of course the six month deadline for each past contract is now well past. The new Regulations make clear that people in this position can claim for all short-term contracts as long as they are still working with the same employer – either on continuing short-term contracts or as a regular employee. They can also claim if they have stopped such work within the last six months.
If you think you have a claim, write to your employer saying that you want to join the pension scheme for those years prior to 1995 under the Occupational Pension Schemes (Equal Treatment) (Amendment) Regulations 2005. If you want help with your claim then the trade union is the best place. If you are not in the union then you could contact the Equal Opportunities Commission on 0845 601 5901, the Arbitration Service ACAS on 08457 47 47 47, or the local Citizen’s Advice Bureau.
This long and complicated legal story is a classic case of how European and UK law interact. Unfairness can be put right. But it does take a very long time. And hundreds of thousands of women who have failed an arbitrary time limit or who cannot now pay back the missing contributions are left without the pension which the law should have given them all along.
October 2005