James Keith looks at yesterday’s judgment from the Supreme Court that that full survivors’ pension benefits must be applied to civil partnerships and same-sex marriages.
The Supreme Court has ruled that occupational pension schemes must provide equal survivors’ benefits to those who are married or in a civil partnership regardless of sexual orientation.
Mr Walker has faced a long battle to ensure that his husband’s survivor’s pension rights would be the same as if he was married to a woman. He has made claims for discrimination in the Employment Tribunal, the Employment Appeals Tribunal, the Court of Appeal and finally to the Supreme Court in the case of Walker (Appellant) v Innospec Limited and others (Respondents)  UKSC 47.
When civil partnerships and same-sex marriages were introduced in the UK, it was lawful under paragraph 18 of Schedule 9 to the Equality Act 2010 (as restated) to discriminate against an employee and a member of a pension scheme who was in a civil partnership or same-sex marriage by preventing or restricting them from having access to pension benefits which accrued before 5 December 2005 or which is payable in respect of periods of service before that date. Innospec as his former employer, and the pension scheme which it sponsored, relied on that exemption.
In Mr Walker’s case, the difference in treatment was as stark as you are likely to see. If Mr Walker was married to a woman (or indeed if he married a woman in the future) his ‘wife’ would have been entitled on his death to a ‘spouse’s pension’ of about £45,700 per annum. In comparison, Mr Walker’s ‘husband’ would have been entitled to a pension of about £1,000 per annum.
Along the way Mr Walker has received sympathy for his predicament. In the Court of Appeal Lord Justice Underhill said:
“I can understand that Mr Walker and his husband will find this conclusion hard to accept. But changes in social attitudes, and the legislation which embodies those changes, cannot fully undo the effects of the past.”
What did the Supreme Court say?
In short, until today pension schemes were acting lawfully in restricting same sex survivors’ benefits to service after 5 December 2005. The Supreme Court has now held that (i) paragraph 18 of Schedule 9 to the Equality Act 2010 is incompatible with EU law and must be disapplied (what about Brexit you say?) and (ii) Mr Walker’s husband is entitled on his death to a spouse’s pension, provided they remain married.
What does the UK government say?
A joint report from the Department of Work and Pensions (DWP) and HM Treasury has already been issued on this matter, but the government has yet to formally respond. We strongly suspect, taking into account the continuing changes in social attitudes, that this will be issued quickly and that the Supreme Court’s decision will settle matters regardless of the outcomes of Brexit and will become incorporated into UK law.
What should pension schemes do?
As a matter of urgency trustees and employers should review their pension scheme rules to see whether their scheme provides same sex marriages and civil partners with ‘restricted benefits’ after December 2005 and obtain an estimate of the potential additional cost of providing them. Similar to how the ‘equalisation of normal retirement ages’ for men and women has been applied and corrected in respect of any potential historic claims, we recommend that trustees and employers take appropriate legal advice.
- James Keith is a senior associate at MacRoberts