The directive states that it is only to relate to insurance and pensions that are ’private, voluntary and separate from the employment relationship’, which, says Skandia, means all group schemes, and not just trust-based ones, could be exempt.
The provider warns that this could create deep complexities for financial advisers, if individual personal pensions are treated differently from workplace plans.
Skandia says income drawdown and discounted gift trusts could also be exempt, as they exist through tax and not sale of goods legislation.
Phil Carroll, financial planning specialist at Skandia, says: “The implications of the European Court of Justice’s ruling on gender equality in insurance may not be as clear cut as initial reactions suggest. It is not clear whether all annuities and other financial products such as income drawdown and discounted gift trusts will be affected.
“This is because the ruling only appears to relate to the insurance exemption in the directive governing equal treatment on goods and services which would not affect some financial products. Workplace pensions, for example, are treated as part of equal pay legislation under employment law which means that equality in defined contribution workplace pensions is achieved by equal contributions not equal annuity or pension conversion rates. Therefore annuities purchased from a workplace pension scheme may not be caught by this ruling.
“Similarly, differences between men and women in income drawdown and discounted gift trusts come from tax legislation not the provision of the goods or service so again may not be affected by this ruling.
“In any event, legislation in the UK would need to be changed to conform with the ruling and it would make sense to ensure uniformity across all financial products. A disparity, for example, between an annuity purchased via a group personal pension which would potentially not be caught by this ruling and one purchased via a private personal pension which might be caught will create complexity that will be unhelpful for consumers, financial advisers and product providers.”