Opposite sex couples are now able to become civil partners. It has been estimated by the government that around 70,000 to 75,000 opposite sex civil partnerships will be registered per year, with those civil partners becoming entitled to death benefits under defined benefit (DB) pension schemes. Scheme rules may need to be amended in some cases to ensure death benefits can be paid to opposite sex civil partners.
Civil partnerships for same sex couples were introduced by the Civil Partnership Act 2004. From 2 December, the 2004 Act has been amended to allow opposite sex couples to register civil partnerships in England and Wales. It has also been amended so that certain opposite sex relationships formed in other countries, which are not marriages, can be recognised as civil partnerships in England and Wales.
What does it mean for pension schemes?
Opposite sex civil partners must be treated in the same way as same sex civil partners. This means that schemes must provide the same death benefits for opposite sex civil partners as they do for same sex civil partners. For the most part, they must also be the same as the death benefits provided to widows, widowers and same sex spouses.
However, there are a couple of exceptions to note:
- Some schemes provide for a widower’s pension only in respect of service after the date of the decision in the Barber case (17 May 1990). These schemes only need to pay death benefits to a female member’s widower, same sex spouse, same sex civil partner or opposite sex civil partner in respect of service after 17 May 1990.
- The contracting-out legislation provides that a widow is entitled to a guaranteed minimum pension (GMP) equal to one half of the GMP payable to the member, while a widower, surviving civil partner or surviving same sex spouse is only entitled to one half of that part of the member’s GMP which is attributable to service between 6 April 1988 and 5 April 1997. No change has been made to this legislation.
Is any action required?
Many schemes include a definition of “civil partner” which cross-refers to the definition of “civil partner” in the 2004 Act, without any reference to the same sex requirement. For those schemes, no amendment to the scheme rules will be required, as the regulations amend the definition of civil partner in the 2004 Act by removing the same sex requirement. However, some schemes may include an express reference to the same sex requirement in their rules. These schemes will need to amend their rules so that death benefits can be provided to opposite sex civil partners.
Member communications, such as scheme booklets, may also need to be updated.
Finally, trustees and employers should consider the impact of the introduction of opposite sex civil partnerships on the scheme’s funding position.