Ms Kristensen (aged 29) was employed by Experian, whose direct contribution (“DC”) pension scheme had the following differing rates of employer contributions according to an employee’s age:

  • Employees aged under 35: employee contribution 3%; Experian contribution 6%;
  • Employees aged between 35 and 44: employee contribution 4%; Experian contribution 8%;
  • Employees aged over 45: employee contribution 5%; Experian contribution 10%.

When Ms Kristensen resigned in 2008, HK Danmark (“HK”), a Danish trade union acting on her behalf, claimed that Experian’s pension scheme constituted unlawful discrimination on grounds of age and that Ms Kristensen was consequently entitled to an amount equivalent to nine months’ salary by way of compensation, in addition to the payment of pension contributions at the rate applicable to employees over 45 years old. Experian rejected these claims, contending that the law prohibiting age discrimination did not cover pension schemes.

The Danish Western Regional Court stayed the proceedings in order to refer questions to the ECJ relating to whether pension schemes with differing rates based on age could be justified under EU law.

ECJ Decision

The ECJ recognised that Experian’s pension scheme did establish differing treatment on grounds of age insofar as the younger workers’ overall monthly pay was lower in a manner corresponding directly to age.

However, it held that age-related contributions in a DC pension scheme may be permissible, provided that such a practice is objectively and reasonably justified by a legitimate aim (including legitimate employment policy and labour market and vocational training objectives) and that the means of achieving that legitimate aim are appropriate and necessary.

Experian (and, latterly, the Danish government) had contended that age-related contributions are intended to benefit both older workers who enter its employment later in their working lives (since, with higher contribution rates, they can accumulate reasonable retirement savings over a relatively short period) and younger workers (since lower contribution rates increase the amount of disposable income available to them). Experian also argued that, since the risk of death, incapacity and/or serious illness increases with age, higher contributions were necessary in the case of older workers to cover this risk.

Noting that these aims took into account the interest of all of Experian’s employees in the context of social, Employment and labour market policy concerns, the ECJ was satisfied that Experian’s stated aims could be regarded as legitimate. It was for the Danish court to decide whether the differing age-based treatment arising from the pension scheme constituted an appropriate and necessary means to achieve a legitimate aim.

The judgment is available here.

HK Danmark v Experian A/S, ECJ case number C-476/11