All About Age and Pensions: what you need to know

Ian Chapman-Curry: So welcome to the All About Age Webinar. This year, Gowling WLG's Combined Human Resource Solutions Team has been marking the 10th anniversary of the introduction of age discrimination legislation with a whole series of events. Today's Webinar comes just after the 10th anniversary of the introduction of the age discrimination exemptions for pension schemes.

I am Ian Chapman-Curry, a Principal Associate in the Pensions Team at Gowling WLG, and I am joined today by Liz Wood, a Director in the Combined Human Resource Solutions Team. Hello again Liz.

Liz Wood: Hello Ian.

Ian: And I am also joined by Ruth Ormston, a Principal Associate in the Combined Human Resource Solutions Team. Hello Ruth.

Ruth Ormston: Hello.

Ian: So today's Webinar will last for about 45 minutes and I do appreciate that we are starting late because of those technical difficulties to start with but we will still have time for questions at the end, and like we said we will make sure that you get a recording and we will respond to questions that come in from you.

So just a few brief housekeeping points. The Webinar player has a few simple controls which I imagine many of you have been struggling with, the volume adjustment and the full screen option in the bottom right hand corner of the player. Hopefully those are all resolved now. We have had confirmation from the provider that things are working. You can ask questions at any time, just click on the "as a question" tab, type in your question and click "submit", and we are going to try and answer as many questions as possible in the time available. We will also be encouraging a bit of audience participation for a couple of polls that will automatically flash up on your screen.

And now over to Liz.

Liz: Thanks Ian. So, as Ian mentioned, today's Webinar is designed to provide an update on the age discrimination legislation to the extent that it impacts on pensions. There is no doubt that this remains an area of potential claims. I think this is for several reasons. It is partly because of the way the law is written which means that some otherwise discriminatory acts are excluded but some are not. Partly because it is common for employers to have different pension benefits in place for different sections of the workforce reflecting the way in which provision of pensions under the benefits have evolved over time. So for example it is more common for older employees to benefit from defined benefit pensions, whilst individuals who are now starting work for the first time are likely to be only offered defined contribution pensions. Finally, because pensions in particular can be seen as inherently discriminatory because on a simplistic reading at least, they are structured so as to benefit older rather than younger workers.Today, we will provide a brief overview of why we have age discrimination legislation in the UK, a reminder of the types of age claims that can be brought and update on how employers will defend themselves against age claims, including consideration of some of the tricky areas before ending with some practical tips for employees and trustees of pension schemes.

So why do we have age discrimination legislation in the UK? Well a 2000 European directive established a general framework for equal treatment in employment and occupation, and this directive looks at a number of protective characteristics, such as religious belief, disability, age and sexual orientation. Member states will require you to introduce legislation which complies with the framework, and the age aspect has to be introduced by the beginning of December 2006. So the UK Government introduced the age discrimination aspects of any employment in October 2006, followed in a last minute flurry by the pensions aspects on 1 December 2006. Most importantly in terms of what we are talking about today, whilst it was originally expected that there would be a wholesale exclusion in the legislation in relation to pensions, the Government instead issued provisions which contained a number of listed exclusions relating to what would otherwise be discriminatory provisions commonly found in pension schemes on age grounds. Mainly there was no blanket exclusion, and the age discrimination legislation is now found in the Equality Act 2010 and the very catchily named Equality Act (Age of Exceptions for Pension Schemes) Order 2010.

So why is it important to be aware of the potential for age discrimination claims to arise? The first reason is because of the way the age discrimination legislation is written, everyone has an age, and it protects the characteristic of age is very widely framed in the legislation which means there are lots of different ways in which an age claim can be brought. It is not just open to older employees but to employees of any age and so younger employees could quite feasibly structure a claim that they have been discriminated against by comparison with older employees. A good example is the case of McCullough and ICI. Here ICI was undertaking a redundancy process and Ms McCullough, the Claimant, aged 37 at the time was made redundant and brought an age discrimination claim based on the structure of ICI's redundancy policy. Specifically the redundancy pay that she received on being made redundant which was calculated based on the individual's age and length of service. Ms McCullough said that she was being discriminated against by comparison with both younger and older employees. So it is quite a good example of essentially how even a middle aged person can bring an age claim.

This means that employers and trustees should at least attempt to understand where an age discrimination claim might come from. Employee claims are always expensive to employers or trustees to defend, but unlike other employment claims such as unfair dismissal, there is no cap placed on the award an Employment Tribunal might make in the face of an age claim. This immediately becomes a more stark proposition for employers and pension schemes to see who are considering whether any of their practices are discriminatory. Age discrimination issues are also potentially expensive to make good, for example if an employer's redundancy policy is found to be discriminatory on age grounds or if the pension scheme rules are found to have age discrimination issues this could be very, very costly for the employer and/or the pension scheme in question. And finally there is a direct obligation under the Equality Act 2010 for both employers and trustees of occupational pension schemes to get this right or to face claims. Bearing all this background in mind, Ruth is now going to give you a reminder of the types of age discrimination claims that can be brought.

Ruth: Thanks Liz. Well we thought it would be helpful before we sort of delve into all of the details on pensions just to go back to basics and the starting point, and look at what do we actually mean when we talk about age discrimination, what is prohibited and the main provisions concerning age discrimination can be found in the Equality Act 2010, and that prohibits a number of forms of discrimination. The first one on the slide here so direct discrimination, occurs where there is less favourable treatment towards somebody on the grounds of their age, and that might be a specific age or an age group, because normally here you require a comparator or a hypothetical comparator who is of a different age or age group to see whether or not there has been less favourable treatment.

We then come on to indirect discrimination and I think this can sometimes be a little more tricky for both employers and employees or members to spot and this will involve a provisions criterion or practice which puts workers of a particular age or age group at a disadvantage and so the practice itself might appear neutral or when you look at it and you can scale into the detail, it puts people in a particular age or age category at a disadvantage and we have shown with a little arrow here that there has to be groups and individual detriments so the individual bringing the claim would need to show that the provisions could put them at a disadvantage.

So examples in a pension scheme contest just to bring it to life for you all. An example of direct discrimination might be a provision that simply says that no benefits will be provided to an individual at age 65 because that is the provision that is clearly linked to that person's age. An example of indirect discrimination might be something where you have higher pension benefits for people who joined the scheme before a certain date so whilst that does not seem to be linked to age there might be many older workers who joined before a certain date and therefore younger workers might be at a particular disadvantage by that provision.

And uniquely unlike the other protective characteristics there are contained in the Equality Act such as race, sex, religion for example and in the case of age, both direct and indirect age discrimination can be objectively justified and what we mean by that is it will not be unlawful if it can be shown that the treatment or the provisions criterion or practice is a proportionate means of achieving a legitimate aim. We are going to have more on that later from Liz but just to flag that for age, both direct and indirect can be objectively justified.

So moving on to some of the other acts that are prohibited under the Equality Act, it is important not to forget about those and we have one here, harassment, and this prohibits someone harassing another which means essentially engaging in unwanted conduct relating to their protected characteristics, so here unwanted conduct related to their age and that conduct has the purpose or effect of violating their dignity or creating an intimidating, hostile, degrading, humiliating or offensive environment, and you might think well where does that actually sit when it comes to pensions schemes because surely you cannot have harassment there but think for example about a particularly aggressive benefit provider who was harassing or chasing people of a particular age to find out their estimated retirement date for example, or where there is a benefit change exercise which is targeted at a particular age group if that was done in a fairly aggressive manner, degrading people to try and make a decision then that could potentially constitute harassment.

And the final thing I want to cover is victimisation and victimisation occurs where an individual is subject to the detriment because they have done, intend to or are suspected of intending to carry out a protective act so the most obvious one here would be where somebody has brought or is threatening to bring an age discrimination claim. If that person is then treated less favourably because of that, that would constitute victimisation so, for example, you decided to withdraw an offer that you have made to that person or not give them sense of discretionary benefit or something like that, that could constitute victimisation.

So with pension schemes in particular direct and indirect is probably most likely to be relevant but we flagged the others because it could occur so it is important that you do not forget about them, and section 61 of the Equality Act is that the non-discrimination rules in an occupational pension scheme which essentially says that direct and indirect harassment and victimisation are all prohibited and that applies to responsible persons which excludes the trustees and managers of the scheme as well as the employer whose employees are members.

Ian: OK so thanks for that Ruth. We are just going to go for our first poll and thanks for those on the line who very gamely completed the poll the first time round when there was not any sound but really appreciated but, hopefully, now there is a bit of context to it was the actual audio feed, but what we are asking you is our 10th anniversary special question, when did you last do an age discrimination audit of your pension scheme provisions? So there are a few options there, around 2006 so 10 years ago when the legislation first came in. Second option is within the last five or 10 years, within the last one or two years, never or I do not know. We are just going to push that out to you to see what you think, get some responses from the audience that have stayed with us. Thanks to everyone who has stayed on the line. Like you said we will be giving you a full version of the presentation as a recorded presentation just in case you do need to dial off at the usual time that we were supposed to be finishing. Fortunately the responses that are coming in are a lot healthier than the first time round which suggests that everyone who has stayed with us is now able to hear the presentation which is always helpful.

Let us just give that a few more seconds before we push the answers out to everyone so you can see what people have actually been saying. So it is quite interesting though that there are a lot of people who either have not done an age review or are not aware of an age review having taken place, and that contrasts with about a third of the audience who have done one in the last one or two years so maybe it is either something that you looked at recently and do frequently or it is just something that has not come up, and maybe something that organisations need to think about.

Ruth: Thanks Ian. So we have looked at what the age discrimination legislation says in terms of what is prohibited and now we are going to turn to exemptions. So there are a number of exemptions that apply to pension schemes but here on this slide we show one that applies to benefits more generally and that is the length of service exemption and this essentially says that it is not unlawful or an age contravention, place somebody at a disadvantage. Where there is this disadvantage is because they have a shorter period of service with the employers and another and in the case of an occupational pension scheme this might apply to a rule or practice or decision regarding admission terms or the accrual of or eligibility for a benefit for example. Where the length of service is more than five years, the employer needs to show that there is a legitimate business need for the different treatments, and that legitimate business need might include encouraging loyalty or motivation or rewarding experience of the people with the longest service.

We then come on to pensions specific exemptions so clearly pension scheme benefits are inherently age discriminatory because the whole structure of pension schemes is that they pay out benefits after a certain age for people and the Government recognised this so they did introduce a number of exemptions for the overall principles like you cannot discriminate against individuals on the basis of age.

I have listed some of these exemptions on the next slide and it is important to say that this list is not exhaustive, so there are just a few here so if you want to check whether or not a particular rule or provision that you have fell within the exemptions, I would suggest going back to the order that we listed on the previous slide. We have things for example like minimum or maximum ages for admission to a scheme. Just worth flagging that having a maximum age for joining an occupational pension scheme is an exemption but this does not extend to personal pension schemes. Having minimum ages for drawing benefits from the scheme. Another one may be worth highlighting from this list is age related contributions to money purchase schemes so that is under a money purchase arrangement it is possible to have different rates of member contributions according to age bands, but where that happens, the aim needs to be to set those different rates so that you are equalising the amounts of benefit that people will get when they come to retire so some actuarial input is normally needed on that front, and the final thing I want to say about this slide is this is the age discrimination legislation, but clearly there are other forms of legislation that are out there for pension schemes and that would need to be complied with such as auto-enrolment legislation so it is important to do an audit of the scheme from that perspective as well as looking at the age discrimination angle.

And whilst there are exemptions that apply to pension schemes, not everything is covered by an exemption so having an age at which the scheme stops accrual for particular members is not covered by an exemption per se but accrual cuts off at normal pension age of 65 for example, not an exemption to cover that particular scenario. Golden rules which generally refer to rules where a member may receive a reduced benefit or an unreduced benefit once they have reached a combined minimum age and length of service is not covered by an exemption whilst there is an exemption that might cover those two things separately, where they are in combination, it does not fall under the exemptions. And having a cut-off age for death benefits paid from the scheme is not covered by the exemptions but there is an exemption that applies to insured benefits which we will come on to look at later.

So where does that get us to and what questions should you be asking if you are doing an age audit of your scheme or looking at particular rules of practice? Well the first question you should be asking is, is the rule or practice potentially age discriminatory and remember there consider both direct and indirect age discrimination. Indirect being sometimes a lot more difficult to spot. Indirect being sometimes a lot more difficult to spot. If the answer to that question is yes, then go on to look at whether or not the rule or practice is covered by a specific statutory exemption and if the answer to that question is no, then you will need to go on and look at whether or not it is capable of being objectively justified, and Liz is now going to come on to look at what we mean when we talk about objective justification.

Liz: Thanks Ruth. So yes if an employer or trustee cannot shoehorn a practice provision on measuring one of the specific exemptions, it may successfully show objective justification in order to defend itself at an age discrimination claim, and the concept of objective justification originally came from indirect discrimination case law which was then placed in respect of the other protective characteristics for example sex discrimination before the introduction of the Age Regulations 2006.

An objective justification requires an assessment of whether the treatments or the practice criteria or provision complained of is a proportionate means of achieving a legitimate aim. Essentially this is about persuading a court or tribunal that judged objectively is justified. In short hand this is about the ends justifying the means. So how should an employer or trustee approach constructing a defence to age discrimination?

The first step is to establish the legitimate aim or aims and I generally will be referring here to the aims of the employer if the trustees then may want to be seeking to rely on. And for indirect age discrimination establishing legitimate aims leaves a large degree of flexibility open to the employer. Legitimate aims are not defined in the legislation but they can potentially be any reason of the employer or trustees which justifies the measure or the practice which gives rise to the alleged discrimination so good examples would be rewarding loyalty, encouraging motivation, rewarding experience and the facilitation of employment planning so for example succession planning. The employer does not have to establish the legitimate aims at the time it applies the PCP the practice provision criteria or the measure. It can do retrospectively so looking back and this might need to be relied on if you are looking at pension scheme rules that were brought into place 20 or 30 years ago when you are trying to establish why they were put in place in the first place, but generally it is preferable for an employer or trustee to attempt to establish the legitimate aims at the time the provision is introduced and it is often helpful to have evidence to show why you have got those legitimate aims. So we have got a really good example of this that came out in a case law from the last couple of weeks where the ECJ have made a decision involving the Bath Police and Emergency Service Academy which requires that applicants for the role of Police officers in the Bath regions were aged under 35 at the time of their appointment, and an age discrimination claim was brought in relation to this cut-off age and the European Courts accepted that on the fact the Bath Police had compelling evidence to justify the legitimate aims sitting behind the policy including the forecast showed that the demographics of the current Bath Police Force would result in more than 50%25 of Police officers being aged between 55 and 65 years old by 2025 which presented a major issue to the Police given the demanding nature of the role. It is very important to note that costs grounds alone cannot form a legitimate aim for discriminatory treatment. This was originally established in sex discrimination cases in the 2000s and it accords with the fundamental principle that employers cannot justify continued discriminatory treatment so for example paying women less than men simply because it would be prohibitively expensive to uplift women's salaries to that of their male counterparts and this is so true to the age discrimination cases that we have seen.

A good example being Woodcock. This was a case involving a chief executive of the North Cumbria Primary Care Trust and even the process of being made redundant and the PCT realised that they needed to act more quickly in order to issue the notice of dismissal to Mr Woodcock because if they did not do so very quickly he was going to reach his 50th birthday at which point he would be entitled to enhanced pension benefits and in this case the Court of Appeal was willing to accept that whilst costs were a significant factor in the PCT's decision to dismiss Mr Woodcock, there were other factors so the plus element of a costs plus rationale was shown including the fact that the PCT was going to make Mr Woodcock redundant in any event and so the plus element was actually the act of dismissal for Mr Woodcock.

The second step for employees in terms of justifying an act is demonstrating proportionality because the case law indicates that it is relatively easy for an employer to establish a legitimate aim or aims for indirect discrimination but then the employer must show that the actions or measures in place are a proportionate means of achieving the employer's legitimate aim or aims. The directive talks about the Act being both appropriate and necessary so essentially the means chosen to meet the objective must go no further than is necessary, and I always think of this as being a balancing act between the legitimate aim of the employer and the impact on the employee or the member because it is going to be much harder for the employer to show that the means adopted to achieve the aim are proportionate in the circumstances if the impact is very heavy on the individual.

The case law around direct discrimination has really evolved over the last 10 years. The legislation ostensibly indicates that the test for justifying both direct and indirect age discrimination is the same but the Courts have interpreted the two tests differently depending on whether it is direct or indirect discrimination and this very much flows from the framework directive and the European Court's interpretation of what the intent of the directive originally was. So where we have got to is that the European Court agreed to by the Supreme Court here have agreed that was the test of direct and indirect discrimination in the framework agreement are broadly the same satisfying an allegation of direct discrimination must be in pursuit of legitimate social or employment policy aims, they cannot be aimed specifically to the employer in question such as costs reduction or improving competitiveness, so I think you need to bear in mind that employers essentially have a higher burden of proof in showing social policy aims where you are faced with an alleged act of direct discrimination.

And what about the trustees of the pensions scheme's ability to be objectively justified? Well this remains relatively untested despite having 10 years of age discrimination law in the UK, and I think for the trustees it can often be difficult to know if there will be discrimination because it might depend in part on the demographics of the employer's workforce and how, for example, pension scheme rules might apply to people but if trustees have concerns, I think that the first thing to do would be to attempt to piggy-back essentially on the employer's objective justification so ask the employer what the reasons were for example pension scheme provision or the practice which might be age discriminatory and ideally it is either a comfort letter or even better would be a deed of indemnity from the employer in relation to the age discrimination concerns that the trustees have and we have certainly seen that in practice in the pensions team here at Gowling.

So what about age discrimination 10 years on in terms of common issues? Well when the age discrimination legislation was first introduced it was possible for employers to fairly dismiss employees aged 65 and above as a retirement. In 2011 this default retirement age was removed meaning that unless an employer was sufficiently confident it could keep in place an employee's justified retirement age they which are experiences where there is no cut-off age at which it should be assumed that employees retire and if an employee does not want to dismiss an older employee it must follow a fair process and have a fair reason as you would expect for anybody employed by you but what this means therefore is that some thought needs to be given to the treatment of older workers who might remain in the business for much longer than would have previously been the case. The main principle here is that you need to try and provide for either continued accrual of benefits so for example if there is a defined benefit scheme allowing them to continue to accrue benefits beyond for example age 65. There is a limited exemption in the age exemptions order which provide that you can have an overall maximum accrual for example 40 years' service at which point somebody stops accruing benefits, but even if somebody has stopped building up their defined benefit pension and for example is taking that pension and the employer needs to think about what kind of other benefits it still continues to provide and we often see that employers might choose to offer defined contributions to benefits for employees who have essentially maxed out on their defined benefit pension schemes and battles and makes sense in relation to automatic enrolment provisions as we have eluded to the fact that you still need to make sure that you comply with automatic enrolment for older people if they qualify under the automatic enrolment provisions. We have also seen recently employers looking at whether they want to ensure that there is a scheme rule requiring employees to leave service before they take benefits but some care is needed here because it depends on the drafting of the scheme rules as to whether you can justify introducing that kind of rule if you do not have that at all already.

Scheme closure can also be a particular issue and although there is also exclusion in relation to the ability to close the scheme to new entrants there is not a wholesale exclusion if you are simply closing a scheme band for future accrual across the piece and what we tend to do in practice is that you might get allegations of age discrimination from older employees. I think possibly I think because they are alive to potential impacts on not being able to build up the full pension that they were expecting but actually I think more realistic and successful claims can be brought by younger employees arguing that the closure disproportionately impacts on them because they will not be given the opportunity or time to accrue the full more generous pension which would have been available for some had they been older. And so this is a really important one to bear in mind if you are dealing with scheme closure and how you might address that situation.

Dumbrek and Ofcom was a helpful case around this because Mr Dumbrek, amongst a number of other employees employed by Ofcom, was subject to a change of pension scheme structure moving from defined benefits to defined contribution pension benefits, and Mr Dumbrek brought an age discrimination and unfair dismissal claim and the Employment Tribunal said that this was not age discrimination, the decision available to Mr Dumbrek was not necessarily related to age and actually he suffered no greater disadvantage than younger employees as a result of the switch from defined benefits to defined contribution. If anything, the Tribunal recognised that younger employees were more likely to be impacted.

We've also seens that the structure of certain liability management exercises can be problematic in terms of using very hard age cut-off dates in terms of the structure of the exercise and employers are increasingly using these types of exercises to manage their liability to defined benefit pension schemes particularly when they have gone through the closure exercise already. So for example in a transfer value exercise would be offering members the ability to take their benefits out of the defined benefit pension scheme so reducing the liability to the employer and the trustee but sometimes these exercises can have hard age cut-off for example age 55 and given that that is specific to an individual's age I think that would be very difficult to justify if there was an age claim as a result particularly given that direct age discrimination claims require a social policy justification which I think would be very difficult for an employer to demonstrate. It would be preferable I think for ECB to be structured on a cohort of members for example those with the highest liabilities in the scheme and it would not avoid age discrimination claims altogether because there still might be certain individuals who are prejudiced under age discrimination legislation but I think it is much less likely to result in obvious age claims arising. Similarly pension increase exchange exercises whereby groups of members are given the opportunity to forego the no statutory increase in part of their pension for a one off uplift might also create age discrimination issues particularly because on the one hand members should be treated equally and regardless of age in these kind of exercises but it has to be balanced against safeguarding concerns for vulnerable members, for example, contacting those aged over 80, and that goes back to the points that Ruth mentioned earlier in this Webinar around not badgering effectively older people and avoiding risk of harassment claims.

Ian: OK. Thanks for that Liz. We have got our second poll question very much feeding from what you were just talking about in terms of maximum cut-off ages. So we are asking that if you provide insured benefits to employees, for example life assurance, you have a maximum cut-off age for the cover that you provide and there are four options there. Yes the higher of 65 or state pension age, yes an age other than 65 or state pension age, no or I do not know so I am just going to push that out to the audience now, and if you can let any of those that apply, that would be great. So we are just getting in a few responses now from people. Thanks for bearing with us today. We are obviously aware that we are running over the originally promised time. If people do need to drop out for other commitments then we will be providing the recorded version of the Webinar together with a transcript you will be able to catch up on the last few minutes and of course just as importantly any questions if you want to send those in we will deal with those in the Webinar or off line so just finish pushing that out to the audience now.

There are a big chunk of people there that either do not have a cut-off or do have a cut-off and it is then an age higher than 65 or state pension age and a few that still have state pension age or 65 whichever is the higher so some interesting results there, there are obviously a range of different practices from people so going back to the presentation.

Ruth: Thanks Ian. In this final section, we are going to look at insured benefits and the specific exemption that covers both. Just a little bit of background to this exception, it was brought in when the statutory default retirement age was abolished in 2011, and I think the reason for that was that employers had a concern that if there was no age at which people had to retire and leave the workforce they could come under considerably hefty premiums from insurers if they had to provide insured benefits for an increasingly aging workforce so there was a specific exemption included, you addressed this and that exemption is contained in schedule 9 of the Equality Act and it essentially says that it is not an act of discrimination for an employer to make arrangements for the provision of insurance who are in respect of an employee ending when the employee reaches the greater of age 65 or state pension age.

Importantly unless the employer is an insurer, the exemption will only apply where the insurance is provided by way of an arrangement with a third party so it will not apply to employers who self-insure and there would therefore need to show that stopping cover at a particular age was acceptably justified. There is also a question about whether or not the exemption covers trustees because it does not only refer to employers so trustees might have to look to piggy-back onto the employer's defence that has not really been a tested area yet and the exemption does only apply to the cut-off where it is the greater of age 65 or state pension age so bizarrely would not cover actually a more generous cut-off age such as age 70 so again there you need to be looking at objective justification.

So questions that trustees and employers should be asking themselves on insured benefits:

1. Again is the rule of practice potentially age discriminatory so is there a cut-off age for example?
2. Does it fall within that statutory exemption that we have just covered and given the reference for and if the answer to that question is no is it capable of being objectively justified.?

I am just going to run through a few cases on this that may be helpful. The first case, Witham and Capita Insurance Services, Mr Witham received PHI, so that is private health insurance benefits. They stopped when he reached age 55 and he had not been allowed to join a more favourable PHI scheme arranged while he had been off which would have entitled him to those benefits up to age 65 and that was because the insurance company was not prepared to indemnify him under the best policy unless he was actively at work which he was not at the time that new insurance arrangement was entered into and he brought claims for direct and indirect age discrimination and was successful in both of those claims.

Another case which is not actually to do with pension benefits but I think is helpful in making a particular point but this case of Foreman and Oasis Taxis and then this particular case two individuals eventually after a retender were due to be employed by Oasis Taxis but Oasis Taxis said it could not employ them because the insurance policy that it has for drivers only covered employees up to age 69 and so these two individuals who were both over that age were not covered and the Employment Tribunal held that this was indirect discrimination and put both of these individuals at a disadvantage, and importantly the Tribunal in its decision noted that Oasis Taxis had made no effort to seek insurance for the individuals other than to make a single phone call to its insurance broker. I think what this case says is essentially that you need to shop around really for your insured benefits and not just assume that what your insurer is telling you is common place in the market is necessarily true and show that you have made some effort to provide cover for your employees or your members.

And the final case that I am going to cover on insured benefits is Smith and Gartner which is actually a case from 2015. Miss Smith received payments under a disability plan for May 2003 and at the time she started receiving those payments the company's retirement age was 60 and when she reached age 60, her benefits under the plan ceased and she brought claims for unlawful deduction of wages and direct age discrimination.

The claim was struck out at Tribunal and the Employment Appeal Tribunal upheld that decision. The reasoning was that the company's obligation here was to provide insurance and that was the obligation that it had set out in the contract. It did not actually have the obligation to pay out the benefits, so the employer here had complied with its obligation and the cessation of benefits when the Claimant turned 60 was consistent with the rules of the insurer's scheme and did amount to direct age discrimination on the part of the employer and the Tribunal also noted that any such claim would have needed to have be been brought against the insurer. Important to just note that the fact here occurred prior to age discrimination legislation and insured benefits exemption coming into force although question whether or not that would have changed the decision because it was to do with a contractual entitlement to insured benefits up to retirement age, which at the time was aged 60.

So where does this leave us? Well I am going to pass over to Liz to wrap this all up for us.

Liz: Thanks Ruth. So where does this leave us? Well I think the first point that comes to mind is to take care around objective justification particularly direct age discrimination. The case law around this has really moved on since the age discrimination legislation came in 10 years ago. In particular ensure that thought has been given to benefit provision for older workers. I think this is an area which we have not seen the last of. I think this is going to become more and more of an issue over time as the demographic of our country just moves gradually upwards and people remain in work for longer.

Similarly the structure of liability management exercise is needed to be thought about. I think this is a relatively un-thought of area in that we have certainly seen that liability management exercises really sometimes have some screaming cut-off which could create problems and trustees' potential exposure does still remain relatively untested so I think we will see in the next few years the boundaries of that being explored more. So what should you be doing?

Well we definitely recommend an age audit of pension and benefits to identify any rules or provisions which might be problematic. As Ruth mentioned, insured benefits still remain a real problem and so an audit of your insured benefits provided to employees, including regular monitoring against what is available in the market, is a good idea because this is also an area that has changed over the last 10 years. I would also say think about age discrimination issues early on when it comes to any kind of benefit change exercises be that scheme closures, liability management or just benefit changes more generally in terms of how that might disproportionately impact on particular age groups. So that is all I was going to say on conclusions and what we were going to say more generally and I will just hand back over to Ian.

Ian: Well thanks very much for that and thanks hugely for the audience that stuck with us whilst we were just ploughing through some technical issues to start with. We are just going to have time for just a couple of very, very quick questions. What we are going to do is to respond to other questions off line so if you have asked something that does not get answered then we will be dealing with that, but there is a really interesting one that has come in saying we are finding it really difficult, if not impossible, to get insurance or life assurance for employees who are aged over 70. What should we actually thinking about doing those circumstances?

Ruth: Thanks Ian. I mean that can put an employer in a difficult position and that is partly because the wording in the exemptions that I covered earlier is drafted so narrowly so it only applies where the cut-off is 65 or state pension age but actually if you are more generous, you do not fall within the exact wording although it is hoped that is difficult for Tribunals were to look at your provisions, they would recognise that you are providing something more generous. I think it would be important for an employer in that situation to show that they had shopped around and looked for alternative provision and then look at their objective justification so their reasons for having that particular cut-off age and whether or not they were able to justify it. They could also think about self-insurance. I think that would be potentially very expensive so it is hoped really that the insurance industry will just keep pace with longevity and working patterns of employees so that it does not become too much of an issue for employers.

Ian: And it is a developing piece, is it not? It is something that we are seeing development from and hope that it carried on. Speaking of development, we have a question that, as lawyers, we are almost obligated to ask at the moment or consider and there is a question that has arisen about what would the impact of Brexit be because this is definitely something that is coming up across the piece on employment and pension law issues. Liz, what do you think of that?

Liz: Well as I mentioned, the framework directive requires the member of state to introduce age discrimination legislation and those provisions have now been introduced in the UK by primary and secondary legislation so they would firstly have to be significant specifications to remove those provisions so let us assume that the Equality Act stays for now, that is not going anywhere for the time being. And actually although we live in interesting times I still think that it is unlikely that there will be a push to remove that sort of legislation in the future and I think with the discrimination laws, amongst others key protection for workers are at least for now relatively accepted by politicians of all persuasions in broad terms. And that said I think it is entirely possible that as we move out of Europe, the UK Courts might move away from the European jurisdiction that we are seeing on this slide, I referred to a number of European decisions which have impacted on how we now look at age discrimination and so the UK Courts might well take a different approach to for example direct age discrimination if they do not always have to refer back to what was being said at the European level.

Ian: OK. Well that is all we have got time for with this. I would just like to have a big thank you for our presenters, Liz and Ruth and especially to our audience and look forward to welcoming you on the next All About Age Webinar in 2017. There is a feedback questionnaire that will be coming on your screen soon. You can also download information such as the "supply" in the download tab, and more importantly we are going to be putting a recording of the Webinar on the website, and we will let everyone know when that is available so that you can look at that in your own time or send it on to anyone who you think might be interested. So thanks very much to everyone and goodbye