Civil Partners and Same Sex Spouses Entitled to Equal Survivors’ Benefits

The Supreme Court has ruled that a restriction which limited a civil partner’s (and latterly, same sex spouse’s) pension rights to pension benefits earned after 5 December 2005 was unlawful and contrary to EU law. John Walker had been in a relationship with his husband since 1993 and subsequently entered into a civil partnership in 2006. The Court noted that the salary paid to Mr Walker throughout his working life with the chemicals company Innospec was the same as would have been paid to a heterosexual man, and there was therefore no basis to deny his partner access to a spouse’s pension in the event of his death, despite the fact that some of his pension benefits had accrued before the Civil Partnership Act came into force on 5 December 2005.  

The basis for the decision was a European ruling that if national legislation allows a status equivalent to marriage, then it is contrary to EU law to treat a same sex partner any less favourably than an opposite sex spouse, as this would constitute discrimination on the grounds of sexual orientation. The Court also disagreed with the argument that changes in law do not apply retrospectively, holding that the question of entitlement to a spouse’s pension had to be determined at the time it fell due, not at the time when it accrued.

Interestingly, the Court also took the view that there would not be unacceptable economic or social consequences arising from allowing same sex couples to enjoy full pension rights – the point here being that schemes would have been funded on the basis of a potential future entitlement to spouse’s pensions for members. Of course, in practice, many pension schemes will already be treating civil partners as equal to heterosexual spouses for the purposes of all benefits under the scheme – however, to the extent that defined benefit schemes are currently relying on the restriction in relation to the date the Civil Partnership Act came into force, they will need to review their benefit structure, consider any consequential funding issues, and, if needed, communicate the change in entitlement to affected members.

If you have any questions about the decision in Walker v Innospec and how it might be relevant for your pension arrangements, then please contact Andrew Campbell in the first instance.