Sex Discrimination and the Lower Earnings Limit

The High Court held earlier this year that a deduction of the lower earnings limit from pensionable salary did not amount to indirect sex discrimination, even if employees are excluded from membership.

A number of occupational pension schemes effectively exclude from membership employees earning below the lower earnings limit (LEL) by only including those earnings above the limit in the calculation of benefits. This practice is aimed at ensuring broad integration between scheme benefits and state benefits: it avoids employees getting both the basic state pension and a scheme pension in respect of the same earnings. However, those earning below the LEL will not get a state pension unless the employees make voluntary Class 3 contributions.