Annuities: gender on the agenda
This Directive will look to ban both direct and indirect discrimination and one of the sub-paragraphs (the smallest of the small print) is having a go about the use of gender in actuarial calculations of premiums. Now, this looks important to me, particularly as the explanatory notes that come with it state that this is to include the setting of Ďratesí for private pension contracts. It also goes on to say that this kind of discrimination can lead to different annuities for women and men and clearly constitutes discrimination based on sex.
Well, this is only a draft Directive at this stage and it needs to get approval from the Council of Ministers before we need to really start taking heed of it, but itís out there, and itís coming this way. Those who said that the unisex annuity rates we apply to our contracted-out Protected Rights funds were only the thin end of the wedge look like they may have been right all along. They certainly look more likely to be proved right than wrong anyway.
Once again, this is something for us to keep a watch on. It is obviously time to start wondering what kind of future we are heading for with annuities, particularly as we daily witness the seemingly-inevitable switch from Defined Benefit pensions to Defined-Contribution schemes.
When this Directive has been through the drafting stages and come out the other end of the process Iíll look it up and report back to you again, the Directorate General needs to get the text through the EU Commissioners first, then itíll be formally published. Iíll bet you canít wait...
30 July 2003
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