I move amendment No. 44:
In page 31, subsection (2) (c), line 47, to delete "body," and substitute "body."
SECTION 34.
Amendment agreed to.
I move amendment No. 45:
In page 32, subsection (3), line 3, to delete "actuarial or other".
Subsection (3) states:
Nothing in this Part or Part II shall make unlawful discrimination on the age ground or the disability ground in circumstances where it is shown that there is clear actuarial or other evidence that significantly increased costs would result if the discrimination were not permitted in those circumstances.
I propose to delete the words "actuarial or other" so that it would read "where it is shown there is clear evidence that significantly increased costs would result if the discrimination were not permitted in those circumstances".
I am concerned the actuarial provision would allow discrimination on grounds of age or disability, for example, in relation to the provision of a pension. I have no objection to actuarial methods being used to determine the cost of a pension or the number of years required to qualify for a pension — one qualifies for a pension for a certain number of years on age grounds in any event. However, someone behind the scenes is trying to get this actuarial provision included in the Bill and we would like to know who they are. I presume bodies such as the pensions industry have made representations and want to be free to discriminate on an actuarial basis.
I can see there could be problems with defined benefit pensions where one receives a definite benefit which is known in advance. However, pensions are currently being changed from defined benefit to defined contribution pensions where this issue would probably not arise. The provision is probably to protect employers in situations where there are defined benefit pensions.
Defined benefit pensions are, however, normally based on years of service, which would depend on a person's age. If one has ten years' service one will get roughly one quarter of the defined benefit. Someone who contributes over a longer period will contribute a great deal more. Ten years' contribution is worth much less at the end of the period than at the beginning because money contributed at an earlier age will have been invested for a longer time.
Can the Minister tell us who wants this actuarial provision and why he has included it? We would then be wiser about it and could judge whether it is necessary.
The reference to actuarial evidence is considered to be an important one. While the Bill does not deal with pensions where actuarial factors are particularly relevant, it can deal with other benefit schemes such as death in service or permanent health measures where actuarial evidence arises, especially in the context of age and health characteristics. In the circumstances, I regret I cannot agree to the deletion of the words proposed in the amendment. The words are important and can be particularly relevant in those circumstances.
The Minister told us this is important but I would like him to spell it out in more detail. The Minister for Health has included a community rating clause in relation to permanent health insurance, which is the opposite of this. In other words, we all share the costs and benefits of health insurance.
I see there can be practical difficulties but I hate to run away from them. The insurance and pensions industry do not want to remove this clause because that would mean they might have to provide better treatment for the people concerned. Will the Minister spell out how it operates? He referred to permanent health and pensions. What would be the disadvantage of not including the actuarial clause?
It is an essential provision, provided an employer proves to the satisfaction of the Labour Court or the equality officer that significantly increased costs would result and if that is backed up by clear actuarial grounds. It has a broader base than insurance and pensions. It is not done on the say so of the employer. The Labour Court or the equality officer will have to be satisfied that significantly increased costs would be involved. If they can establish that to the satisfaction of the tribunal, it is only fair and reasonable that has to be a factor in the equation.
It is comparable to a provision which already applies in section 69(1)(b) of the Pensions Act, 1990, which states:
. . . any difference on the basis of sex in the amount or value of benefits provided under a defined contribution scheme, to the extent the difference is justifiable on actuarial grounds.
It is a well established screen. If one examines it objectively, one will see it is a fair and reasonable provision. I emphasise that the increased costs would have to be significant and not marginal. The words "significantly increased costs" are used in the subsection. It is a necessary provision.
Why is there a need to specify actuarial evidence when the word "evidence" covers it all? There is obviously a concern to specifically include the word "actuarial". I know it is an important area which has many elements. However, a great deal of change has taken place in this area since 1990, even in regard to pension schemes. Many are switching, and have already switched, to defined contribution schemes because of their fears for the future.
Amendment, by leave, withdrawn.
Question proposed: "That section 34, as amended, be agreed to.
It has recently been represented to me that section 34 may be indicated to deal with certain red circled pay rates and related matters. I will review this issue in the coming weeks to determine whether there is substance in this preliminary view. I may perhaps introduce an amendment on Report Stage to cover the matter if necessary.
Question put and agreed to.