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Pension scheme contributions: are age-related differentials allowed?

by on October 16, 2013

This very useful summary from Suzanne Burrell of law firm Shoosmiths reports on a recent European Court of Justice ruling (HK Danmark v Experion A/S [2013] EUECJC-476/11). This concerned an employees pension scheme in Denmark which had differential employer contributions based on the age of the employees: 6% for under-35’s, 8% for 35 to 44-year-olds, and 10% for people aged 45-plus.

Amongst the justifications given for these differentials were that they helped older workers build up retirement savings more quickly and reflected the more costly insurance of risk benefits for older workers.

In summary, the ECJ has confirmed that these age-related differentials in employer pension contributions are permissible provided they can be objectively justified. The article goes on to explain more fully the legal position and its likely implications in the UK.

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