DoE predicts pension claim rush

REPORTS that 20,000 claims have been lodged with industrial tribunals by part-time workers seeking backdated pensions payments are likely to be a “conservative estimate” of the total, according to the Department of Employment.

A DoE spokeswoman says official figures have not yet been compiled, but it is thought the rush on claims before the New Year could see the figure climb.

Unions in the banking and financial sector had encouraged members to lodge claims by 28 December – three months after the European Court of Justice ruled it was, in principle, discriminatory to exclude part-time staff from company pension schemes.

But Ian Pittaway, former chair of the Association of Pensions Lawyers and head of pensions at Nicholson Graham & Jones, says although claims are snowballing part-time workers must meet a range of criteria before succeeding in their action.

One of the main hurdles is the backdating of employee contributions with staff being forced to pay out to contributory schemes in order to receive payments from employers.

“Some commentators have said that this could cost billions of pounds for UK pension funds and employers. I would say it would be much less than that,” says Pittaway.

“It will not be anywhere near as serious or damaging

as people say, but it could be that there are one or two employers that it affects disproportionately.”

Baker & McKenzie's head of pensions Robert West says claims are likely to be made by employees who have pension schemes requiring low or no self-contribution.

He says the full extent of the claims will not be known until national time limits are established by the Government and it becomes clear how far claims can be backdated.

“I suspect that until the retrospective issue is sorted out people may be more reluctant to bring a claim and may just make enquiries,” says West.

“But in some cases employees may be concerned about reaching a relevant time limit and they may be best advised to put in a claim, even if they subsequently drop it.”