Of interest to all employers and trustees is the coming into force of the Marriage (Same Sex Couples) Act 2013 on 13 March 2014, permitting same sex weddings from 29 March 2014. The Act also enables civil partners to convert their civil partnership to a marriage, and provides for the scheme benefits paid to surviving civil partners also to apply to surviving same sex spouses.
The Marriage (Same Sex Couples) Act 2013 (Consequential Provisions) Order 2014 allows trustees to modify scheme rules by resolution to provide benefits paid to an opposite sex spouse also to be paid to a same sex spouse. Where such benefits exceed those already paid to surviving civil partners, employer consent will be required.
The Act provides that references in existing legislation to “marriage” now include same sex marriage. Legislative references to “husband”, “wife”, “spouse”, “widow” or “widower” also include same sex spouses.
However, this extension of interpretation does not apply to existing pension scheme documentation, so schemes can still rely on the exemption in the Equality Act 2010 (the Exemption) to restrict benefits relating to pre-5 December 2005 to surviving same sex spouses, as to surviving civil partners.
Where schemes wish to provide to same sex spouses benefits identical to those received by opposite sex spouses, a rule amendment will be needed, specifying the date from which the change applies. This may be achieved by trustee resolution, but where this confers greater rights (for example, by providing benefits relating to pre-5 December 2005 service), employer consent is required.
On 18 February 2014, the Employment Appeal Tribunal (EAT) overturned the previous tribunal’s decision inWalker v Innospec Ltd that the employer had directly discriminated against Mr Walker, by refusing to provide a pension (in the event of his future death) to his surviving civil partner in respect of pre-5 December 2005 service. The original tribunal held that it was unlawful for a scheme to provide anything other than a full spouse’s pension for surviving civil partners, and that the Exemption was incompatible with the Equal Treatment Directive.
The EAT stated:
“[The Exemption] does not prevent a pension scheme adopting the equalisation of benefit for all time past and future as between the spouse and the civil partner, and we are told some have done so: but it permits those who consider they should not do so from being obliged.”
To interpret the Exemption as incompatible with EU law, the EAT concluded that it would be asked to “legislate rather than interpret” and that such an approach was not possible.
Schemes will need to decide whether same sex spouses are to receive the same (non-contracted-out) benefits as opposite sex spouses for pre-5 December 2005 service.
The contracting-out changes are not overriding and schemes may need to amend their contracting-out provisions, depending on how they are expressed.
For the avoidance of doubt, deeds of amendment effective after 12 March 2014 should specifically disapply the interpretation provisions under the Act, unless the intention is for these terms in the scheme’s documentation to refer equally to same sex spouses.
Scheme booklets should also be checked for accuracy.