Back to news 15 May 2014

Benefits for same sex spouses

Introduction

The first marriages for same sex couples took place at the end of March 2014. For pension schemes this means that from now on, following the death of a member who was married under the Marriage (Same Sex Couples) Act 2003 )the "Act"), schemes will need to consider the level of survivor's benefit payable to the member's same sex spouse.

Benefits to be provided

The current legal position in the UK is that occupational pension schemes do not need to provide “civil partners” or “same sex spouses” with the same survivors’ pension benefits as “opposite sex spouses”. However, all pension schemes must as a minimum provide civil partners and same sex spouses with:

• contracted-out (state second pension) survivors' benefits relating to service on or after 6 April 1988 (the date on which contracted-out benefits for widowers were introduced); and
• all survivors' benefits relating to service on or after 5 December 2005 (the date on which it was possible for same sex couples to enter into civil partnerships).

Is the provision of unequal benefits unlawful discrimination?

There is already some European case law which indicates that civil partners should be provided with full survivors' benefits (over and above the statutory minimum described above) and some legal commentators hold the view that the current exemption in UK law permitting the provision of different pension benefits to civil partners and same sex spouses is incompatible with the EU Equal Treatment Directive. Although this view has been tested and rejected by the UK's Employment Appeal Tribunal (which confirmed that the UK's current position is not incompatible with European law), it seems unlikely that this will be the final word on the matter. In particular, the Government has announced that it is conducting a review with the report expected to be published before 1 July 2014. The Act provides that it does not alter the effect of any "private legal instrument" made before the Act came into effect and so any references to survivors' benefits payable to a "spouse" in pension scheme rules are unlikely automatically to include same sex spouses without further rule amendments.

What will the Fund do?

Although the law does not require civil partners to be treated in the same way as opposite sex spouses, under the Fund rules civil partners are already entitled to the same survivors' benefits as opposite sex spouses. Now that the Act had come into force, the Trustees and sponsoring employer of the Fund have decided to make further amendments to the Fund rules to ensure parity for same sex spouses as well.

The information contained in this article has been provided by the Trustee of the Fund for general information purposes only and is not intended to constitute legal advice. Nothing stated in this article should be treated as an authoritative statement of the law in any specific case and should not be relied upon by any members of the Fund.