Pensions ruling saves firms 50bn pounds

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THE EUROPEAN Court of Justice has confirmed an earlier legal opinion that companies do not have to provide equal pension benefits for men and women for periods worked before the ground- breaking Barber judgment in 1990.

Actuarial estimates of the cost to British employers of applying the Barber judgment retrospectively have ranged as high as pounds 50bn.

On the most important issue, yesterday's ruling on the Dutch ten Oever case is in line with the opinion given in April by the court's Advocate General. The court's decision on the ten Oever case also means that pensions paid to widows, widowers and other surviving beneficiaries count as pay under the EC's Treaty of Rome - and therefore employers must provide equal benefits to men and women.

The ruling also makes it clear that equal treatment applies to pensions benefits earned after 17 May 1990. Peter Tompkins, of the consulting actuaries Lane Clark & Peacock, said the Advocate General's decision had suggested that equal benefits for survivors would only apply from the date of the ten Oever ruling.

This prompted nearly 200,000 policemen to lodge claims with industrial tribunals to ensure they received maximum benefit from subsequent rulings. This now appears unnecessary. 'Those policemen are wasting their time now,' Mr Tompkins said.

The key issue outstanding is whether pension funds should be compelled to use the same actuarial rates for men and women when determining pensions. Decisions on the other test cases, which include Coloroll, are expected to be delayed until the end of the year or next January.

Mr Tompkins said yesterday's ruling finally confirmed the law on Barber and the retrospective application of equal pension rights. 'It is finally clear and will not be changed again,' he said.