Summary

In a landmark ruling, the Supreme Court has held that a same-sex spouse should be entitled to equal pension rights to a heterosexual spouse. John Walker, a former cavalry officer who brought the action, is gay, and has lived with his male partner since 1993. They entered into a civil partnership on 23 January 2006 following the coming into force of the Civil Partnership Act 2004 and they are now married.

Lord Kerr said that the salary paid to Mr Walker was the same as that which would have been paid to a heterosexual man, and "there was no reason for the company to anticipate that it would not become liable to pay a survivor's pension to his lawful spouse.”

Background

Mr Walker, had worked for his employer, Innospec Limited, from 1980 until his retirement in 2003. He had originally claimed that Innospec had discriminated against him as the firm’s contributory pension scheme provided a spouses pension to a member’s civil partner in the event of his death, but only in relation to service after 5 December 2005 (when the Civil Partnership Act came into force). In 2012, Mr Walker was successful in his discrimination claim against Innospec when a tribunal found that the UK Government had not correctly implemented the Equal Treatment Framework Directive (EU law) to the extent that the Equality Act (UK law) provided that civil partners should be treated in the same way as spouses on the death of a member, but only in respect of pensionable service after 5 December 2005.

However, Innospec’s appeal to the Employment Appeals Tribunal was allowed and Mr Walker’s appeal to the Court of Appeal was dismissed. Mr Walker then appealed to the Supreme Court.

Supreme Court Judgment

In its judgment, the Supreme Court has now declared:

  • that the UK law is incompatible with EU law; and,
  • Mr Walker is entitled on his death to a spouse's pension, provided he survives Mr Walker and they remain married.

Pension schemes should now equalise survivor’s benefits for all periods of pensionable service, irrespective of the sexual orientation of the members to whom they apply.

The Department for Work and Pensions, which opposed Mr Walker's case alongside Innospec, argued during the case that the costs involved in "requiring all pension schemes to equalise entitlements retrospectively" would be £100 million for private sector schemes and a further £20 million for public sector schemes. Although these are big numbers, they are actually small given the overall size of UK pension schemes. A large majority have already taken steps to provide equal death benefits having recognised an inherent inequality in treatment regardless of the Equality Act exemption.

Finally, there is some uncertainty as to whether the judgment will apply only to same-sex spouses, or whether civil partners could also benefit. If it does apply to civil partners then this leaves us with a difficulty, as heterosexual couples cannot currently enter into civil partnerships, so would not be entitled to survivors benefits whereas civil partners may be. Further case law is likely to result on these points. Trustees and employers may therefore wish to think about whether the benefits should be extended out further. Even if Trustees and employers think they have equalised, it would be worthwhile revisiting the position to be on the safe side.