Shillcock v Uppinghham School Retirement Benefits Scheme
Determination by the Pensions Ombudsman (F00317 30/10/97 [unreported])
The pensions ombudsman has ruled that it amounts to unlawful indirect discrimination to refuse to allow an employee earning less than the lower earnings limit (LEL) to join a pension scheme and to fail to pay benefits on amounts earned under the LEL, currently £62 a week.
Mrs Shillcock's employer had an occupational pension scheme which was integrated with the State scheme. In ordr to intergrate the occupational and state pension schemes employees did not pay contributions on earnings below the LEL and the LEL was deducted for the purposes of final pension calculation as scheme members would also receive a state pension. But for employees earning below the LEL such as Mrs Shillcock this means that they received neither an occupational pension nor a state pension unless they had paid voluntary class 3 contributions.
The Pensions Ombudsman, using the equal pay provisions in the Pensions Act and Article 119 of the Treaty of Rome, has ruled that the effect is to indirectly discriminate against women such as Mrs Shillcock. As the school and the trustees of the pension scheme had not shown the discrimination to be objectively justified, it was therefore unlawful.
It was unlawful in three respects: firstly the failure to allow Mrs Shillcock access to join the pension scheme; secondly the failure to allow Mrs Shillcock access to death in service benefits which she would have been entitled to had she been able to join the scheme; and thirdly, the failure to pay a pension based on earnings below the LEL. He distinguishes Mrs Shillcock's case from the Roberts v Birdseye European Court of Justice judgment which held that bridging pensions paid to men to take account of the discriminatory state pension age was not unlawful discrimination.
The implications of the Shillcock decision could be enormous: it is not yet known if the case is being appealed.