The Marriage (Same Sex Couples) Act 2013, key provisions of which are due to come into force on 13 March 2014, will allow same sex couples the right to a civil marriage in England and Wales from 29 March 2014. Same sex couples already have a right to register as civil partners under the Civil Partnership Act 2004. The Act does not remove the availability of civil partnerships going forwards but does allow those in a civil partnership to convert that relationship into a marriage. For the purposes of occupational and state pensions, same sex couples will be treated in the same way as civil partners are currently.

Rights under occupational defined benefit (DB) pension schemes

On the death of a member of an occupational DB scheme after 29 March 2014:

  • In relation to non-contracted-out benefits, the surviving same sex spouse will be entitled to the same benefits as an opposite-sex surviving spouse for pensionable service from 5 December 2005.
  • In relation to contracted-out benefits, any GMP has to be provided in line with the rules for a widower; in other words, the same sex spouse will be entitled to
    • 50% of the GMP accrued after 5 April 1988;
    • 50% of the reference scheme pension in relation to service after 5 April 1997.

Any lump sum death benefits should be provided for a same sex spouse in the same way as for the spouse of the opposite sex.

The above benefits are the statutory minimum that need to be provided.

Do DB scheme rules need to be amended?

Providing the statutory minimum

The statutory minimum in relation to non-contracted-out benefits is ‘overriding’; schemes can therefore provide this benefit without formally amending their rules. The Act does not alter the effect of any “private legal instrument” (the term would include a scheme’s trust deed and rules) made before 13 March 2014. Terms such as ‘marriage’, ‘widows’, ‘widowers, ‘husband’ and ‘wife’ will be interpreted only in terms of marriages of opposite sex couples. After 13 March 2014, a reference to such terms will be interpreted as including those in same sex couple marriages (depending on the precise terminology of the document).

This means that the effect of any consolidation of rules of a scheme made on or after 13 March 2014, could be that same sex spouses could become entitled to the same benefits as opposite sex spouses. So, if this not the intention (i.e. schemes wish to provide only the statutory minimum for same sex spouses), it will be important to ensure the rules are drafted accordingly.

Where schemes have contracted-out benefits, whether or not schemes have to amend those provisions will depend on how the contracting-out provisions are currently worded in the rules.