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The Shillcock case
Nick Bunch from Barnett Waddingham's London office looks at the recent High Court appeal.
Mrs Shillcock, a part-time employee, was excluded from membership of her company’s pension scheme as it only provided benefits based on earnings above the lower earning limit (LEL) and her part-time wages were below this level. She argued that as there are more female than male part-time workers, this type of scheme indirectly discriminated against women.
The Pensions Ombudsman upheld the complaint and directed that Mrs Shillcock should be retrospectively admitted to the pension scheme, with benefits that did not discriminate against her on the grounds of her low earnings. Her admission to the scheme was conditional on her paying contributions, at the Trustees’ request, equal to those she would have paid had she been originally given membership.
The Trustees and the employer appealed. On April 19, the High Court upheld the appeal on the basis that the LEL offset was designed to achieve integration between benefits under the scheme and state pension benefits, and that the offset applied equally to all employees. The judge opined that because Mrs Shillcock already had access to pension benefits in respect of her (low) salary, then there was a justification for the occupational scheme to take this into account in assessing the level of benefits it provided. The judgement is good news for pension schemes with offsets designed to facilitate integration with the State benefit system, as they are now not likely to have to take any serious remedial action.
Nick Bunch, April 2002.