'Only ECJ' can clear up questions over gender ruling for pensions
EUROPE - Pensions experts have called on German courts to pass on lawsuits concerning the recent gender ruling for occupational pension schemes to the European Court of Justice (ECJ) in order to clarify the ruling.
In March, the ECJ ruled that gender differentiation in insurance-based pension schemes were in breach of European Union equality laws.
The new ruling will go into effect from next summer, but many questions remain unanswered, experts say, including whether the regulation applies to new contracts only or to all forms of pension schemes, as well as whether it is applicable to on-book pension assets.
Speaking at the annual conference for the German pension fund association (AbA), Michael Hessling, head of the AbA's working group on direct insurance schemes, said: "Unfortunately, we do not have a clear legal framework yet, although we have to apply the regulation from next year and should already be planning products."
Reinhold Höfer, a pension fund expert teaching at the university in Luzerne, added: "What if an insurer filed a test case with a German court, already pre-empting it being redirected to the ECJ, so that we can get legal certainty on those questions?"
Höfer is convinced German courts would not want to "try and disarm these mines themselves", but rather leave that to the ECJ in Luxembourg.
He also believes the new regulations must be applied to new contracts only. But Ulrich-Arthur Birk, professor at the university of Bamberg, thinks it should also be applied to existing contracts, as any other reading would lead to inequalities within a company.
He potentially sees "massive costs" for companies, as women could sue for not receiving equal treatment with respect to occupational pensions.
Birk also noted that a large law firm had approached him to file a test case, but he said he had yet to decide whether to take it up.
But Höfer argued that such inequalities had been approved in the past where certain deadlines for legal changes had been set.
Both agreed that, although the ECJ's ruling applied only to the consumer directive, it would also be applied to occupational pensions - and not only third-pillar pension products.
Höfer recommended that insurers calculate unisex tariffs "as cautiously as possible", as nobody knows how the share of men and women will evolve.
Similar to other European lawyers, he is convinced that on-book pension assets should continue to be calculated separately according to gender.
Hessling noted that employers had set up occupational pension schemes "to the best of their knowledge", and that an exemption from the gender equality rule in pensions seemed implicit within two EU directives.
"Which employer will in future be prepared to make such a long-term commitment if the legal frameworks are not fixed?" he asked.