Pension schemes must not treat the survivor of a same sex marriage or civil partnership differently from the survivor of a heterosexual marriage.
Pensions for survivors of civil partnerships (CPs) and same sex marriages must now be the same as for an opposite sex spouse.
The pension can no longer be restricted so that it is based only on the deceased's service from 5 December 2005, the Supreme Court has ruled in a unanimous decision.
UK equality legislation expressly allows this limitation (contracted out benefits aside) but the Supreme Court has now declared that it is incompatible with the EU Directive on equal treatment in employment and must be disapplied.
It was on 5 December 2005 that civil partnership was brought into UK law.
The case: Walker v Innospec
Mr Walker and his partner made a CP in 2006 and later married. Learning that his employer's scheme applied the restriction, Mr Walker challenged this as unlawful discrimination and has succeeded. His husband is now prospectively entitled to a pension based on all Mr Walker's service.
The case turned on general issues of how EU legislation applies to past and future events rather than on details of equality law.
From the equality perspective, the key point is that the Court decided the time for testing equality of treatment is when (and if) a survivor's pension falls to be paid. When and over what period the right to a survivor's pension can be said to have accrued was immaterial.
Schemes that already provide full equality for all survivors of marriage and CP will be unaffected.
Depending on their rules about survivors' pensions, some schemes may be less affected than others. For example, some rules say the formal relationship (CP or either form of marriage) had to have been formed before the member reached NRD or their actual date of retirement in order to count. Schemes should check their rules.
Schemes with rules that apply the temporal limitation:
- need to change their practice in future
- should amend their rules to remove the limitation but need not rush to do so
- should investigate whether the scheme has paid, or is paying, any restricted pensions and consider taking advice on any cases
- should consider revisiting any buy-in contracts
- need to adjust administrative procedures and any member literature that is affected
- in most cases, will experience little impact on scheme funding.
Although based on EU law, the ruling is unlikely to be affected by Brexit.
Schemes that were contracted out
The case gave no specific guidance on how to handle sex inequality over GMPs. Schemes should consider taking advice.
Other parts of UK equality law have temporal limitations on their application too. It could be that some of these come into question following the Walker decision.
The decision makes no difference to the position of cohabiting couples.