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New options for defined benefit buy-out bond holders announced

The Minister for Finance has announced a policy change so that the holders of a buy-out bond whose funds originate from a defined benefit (DB) scheme will now have access to the Approved Retirement Fund (ARF) option. He said this change will take effect from 22 June 2016. The ARF option is an alternative to annuity purchase and can offer more flexibility and choice of investments to members past their normal retirement age.

The Minister has requested Revenue to make any necessary administrative changes to reflect this policy change. He has clarified that it remains the case that the ARF option is not available to the main benefits paid from a DB scheme.

‘Death bed marriage’ rule in pension scheme discriminatory

An Advocate General (AG) of the Court of Justice of the European Union (CJEU) has given her opinion that a former university lecturer, as a pension scheme member, was indirectly discriminated against based on his sexual orientation.

The plaintiff sought to establish that his same sex civil partner would be entitled to receive a survivor's pension on his death. The university's scheme rules prescribed that a survivor's pension would not be available where a member had married or entered into a civil partnership after reaching the age of 60 or after having retired. The lecturer retired in 2010. Civil partnership was not recognised in Ireland until 2011. It was legally impossible for him (or any other homosexual scheme members who turned 60 before 2011) to satisfy this requirement until 2011. The AG found this to be indirect discrimination based on sexual orientation. The restriction was viewed as an extremely drastic measure that could not be justified.

Submissions were made concerning the retroactive effect on the institution of civil partnership but were rejected. This is contrary to previous EU and UK case law on the ‘no retroactivity’ and ‘future effects’ principles of EU law.

An objection was also raised that the plaintiff's pension entitlements were based mostly on periods of service prior to the entry into force of the Framework Equality Directive (2000/78). The AG found no issue with this, stating that a new rule of law applies from the entry into force of the Act introducing it.

The AG also briefly discussed age discrimination and the idea of the combined effect of discrimination.

Although an opinion of the AG is not binding on the CJEU, it is frequently followed. The AG's refusal to apply a temporal limit to the future effects of any determination could merit authoritative consideration by the CJEU. Employers with schemes applying similar restrictions should assess them in light of this opinion.