This afternoon the DWP launched a very short consultation on the anxiously-awaited Employment Equality (Age) (Amendment No.2) Regulations 2006. Responses are required by 20 October 2006, ie Friday of next week and may be emailed to age-regulations-2006@dwp.gsi.gov.uk.

The DWP has clearly recognised the danger, as a result of correspondence and meetings with the pensions industry, that if DWP did not clarify the Age Regulations and include further exemptions, schemes would decide that the legal and financial risks of continuing certain practices were too great, and consequently employers would either level down benefits or close their schemes.

Accordingly, extensive amendments are proposed to Regulation 11 and Schedule 2 of the Employment Equality (Age) Regulations 2006 (SI 2006/1031). The draft amendments cover:

• extension of reg 11 to employers as well as trustees;
• the definition of "early retirement pivot age";
• sections of schemes;
• length of service exemption for trustees or managers and employers;
• Lower Earnings Limit and offsets for state retirement pension;
• targeted and capped accrual;
• age-related contributions to money purchase arrangements;
• minimum age for payment of age-related benefits (including on ill health);
• different early and late retirement pivot ages for deferred members;
• bridging pensions;
• reduction of pensions payable to younger dependants;
• continued life cover;
• limits on benefits which arise from a fraction of pensionable pay; and
• new exemptions for personal pension schemes

Respondents are asked whether the amendments make the requirements clearer and more operable by schemes and employers. In particular, DWP also wants to know if there are circumstances, other than TUPE transfer, when it is objectively justifiable on a national level to allow members of one section of a scheme to continue to accrue benefits under more preferential terms than members in another section.

The DWP is also currently amending the DTI Guidance [PDF] on the Impact of the Act Regulations on pension schemes (April 2006) and will consult on those changes shortly.