The Supreme Court has handed down an important decision in Walker v Innospec Limited which may require schemes to take immediate action in relation to survivor benefits.
Mr Walker, who had been employed by Innospec from 1980-2003 and was a member of its occupational pension scheme during that time, entered into a civil partnership in 2006 and subsequently married his partner in 2013.
The scheme provided lower pension benefits to civil partners and same sex spouses than to spouses of the opposite sex and Mr Walker claimed that this was discrimination on grounds of sexual orientation. Innospec relied on an exemption in the Equality Act 2010 which allowed employers to exclude civil partners and same sex spouses from survivor benefits in relation to scheme membership before December 2005 when the Civil Partnership Act came into force.
The Supreme Court overruled the exemption, stating that it is “incompatible with EU Law and must be disapplied”. For Mr Walker, the Supreme Court’s decision means that, in the event of his death, his husband could be entitled to an annual spouse’s pension of around £45,000 instead of around £1000.
The outcome is clearly significant for pension scheme members who have entered into civil partnerships or same sex marriages. Trustees and employers should review their relevant scheme provisions now that the legal position is certain.