The Marriage (Same Sex Couples) Bill continues to progress through Parliament, having had its second reading on 3 and 4 June 2013. The bill gives the surviving spouse in a same-sex marriage the same pension rights as a surviving civil partner. It now contains pensions provisions, including one that protects survivors’ benefits when a party to an opposite-sex marriage changes sex.
Currently, survivors’ benefits do not have to be provided to civil partners in respect of accruals before 5 December 2005 (when the Civil Partnership Act 2004 came into force). (Contracted-out rights are required for accrual after 5 April 1988). Therefore, if a party to an opposite-sex marriage changes sex and the marriage is annulled, the couple could lose out on a significant amount of survivors’ benefits should they decide to enter into a civil partnership.
The Bill attempts to rectify this by amending the Equality Act 2010 to remove the limitation for couples that were in an opposite-sex marriage but are now in a same-sex marriage, due to one of the party undergoing a sex change.
However, the Bill extends the limitation to same-sex married couples so that, as a rule, occupational pension schemes only need to provide survivors’ benefits accruing after 5 December 2005 to scheme members in same-sex marriages or civil partnerships.
A challenge on this limitation before the Employment Tribunal succeeded on 13 November 2012 but is currently under appeal.
An amendment to exclude the 2005 limitation from the Equality Act was put forward during the House of Commons debate about the Bill, although it was ultimately resisted by the Government and rejected by the House of Commons.
The Bill will, if enacted, insert wording into the Pension Schemes Act 1993 so that the guaranteed minimum pension provisions in relation to contracted-out pensions apply to same-sex married partners in the same way as they apply to civil partners – ie if a scheme member in a same-sex marriage dies, their survivor should be entitled to a guaranteed minimum pension under the scheme for accrual from 5 April 1988.