Survivor Pension Benefits

Guy Opperman Excerpts

Thursday 4th July 2019 Written Statements

[The Parliamentary Under-Secretary of State for Work and Pensions (Guy Opperman)]

I would like to make the following statement on behalf of myself and the Chief Secretary to the Treasury, my right hon. Friend the Member for South West Norfolk (Elizabeth Truss).

Supreme Court judgment in Walker v. Innospec and others

The case concerned a challenge in the Supreme Court to paragraph 18 of schedule 9 to the Equality Act 2010, which allows defined-benefit occupational pension schemes to restrict access to survivors’ benefits for survivors of a civil partnership or same-sex marriage to benefits based on accruals from December 2005 onwards. The Secretary of State was joined as an interested party. The challenge was made under EU directive 2000/78/EC (Directive establishing a general framework for equal treatment in employment and occupation).

The judgment was issued on 12 July, with Mr Walker winning his appeal. The Supreme Court decided that the exception in schedule 9 should be dis-applied and that Mr Walker’s husband is entitled on Mr Walker’s death to a spouse’s pension for the whole of Mr Walker’s service, provided they remain married (Mr Walker had accrued a pension from 1980 until 2003).

The Government respect the decision of the Supreme Court. It is now clear that same-sex civil partners or spouses are entitled to survivor benefits in the same way as opposite-sex spouses.

Impact of the judgment on public service pension schemes

Following the Court ruling, the Government have decided that in public service schemes, surviving male same-sex and female same-sex spouses and civil partners of public service pension scheme members will, in the majority of cases, receive benefits equivalent to those received by widows of opposite-sex marriages. The exception to this may be in specific schemes where, in the past, improvements in female members’ survivor benefits have led to increased contributions. Departments will consult on and take forward changes as soon as possible. Schemes will notify their members of changes and any actions they need to take.

All same-sex survivors of a public service pension scheme member will benefit from this change. How much they benefit by will be determined by a combination of factors, including when the deceased was employed, their pensionable earnings, the length of any pensionable service and the specific benefits of the scheme to which the deceased belonged.

Impact of the judgment on private pension schemes

While the Government are responsible for public service pension schemes, private sector schemes are individually responsible for ensuring that they are compliant with the judgment.

It is therefore not for the Government to direct private sector schemes in this instance, and any action taken by the Government in respect of public service pension schemes should not be interpreted as the minimum requirement for private pension schemes in considering how they respond to this judgment. These schemes will need to take their own advice to ensure that they are legally compliant with the judgment going forward.

The Government’s response to the review of survivor benefits in occupational pension schemes

During passage of the Marriage (Same Sex Couples) Act 2013 the Government committed to undertake a review of differences in survivor benefits in occupational pension schemes. A duty to conduct this review was duly enacted in section 16 of the Act.

The review was conducted jointly by the Department for Work and Pensions (DWP) and HM Treasury (HMT), which are the Departments with policy responsibility for private and public service pension schemes respectively, and was published on 26 June 2014.

The review considered the differences in survivor benefits in occupational pension schemes between different categories of member and the costs and other effects of eliminating those differences by the equalisation of survivor benefits. The review investigated the differences between:

same-sex survivor benefits and opposite-sex survivor benefits provided to widows;

same sex-survivor benefits and opposite-sex survivor benefits provided to widowers; and

opposite-sex survivor benefits provided to widows and opposite-sex survivor benefits provided to widowers.

The review considered the extent to which same-sex survivor benefits are provided in reliance on paragraph 18 of schedule 9 to the Equality Act 2010 and the extent to which same sex survivor benefits and opposite sex survivor benefits are calculated by reference to different periods of pensionable service.

The review further considered survivor benefits provided to same-sex civil partners and those provided to same-sex married couples. The law treats same-sex civil partners equally to same-sex married couples for the purposes of survivor benefits in pension schemes because these relationships provide comparable rights and responsibilities. There is no significant difference between them. As such, any differences in the benefits provided to survivors of same-sex civil partners when compared to same-sex spouses would be difficult to justify. The review therefore gave no further consideration to differences between these two groups.

The review demonstrated that there are a variety of differences in treatment in survivor benefits in occupational schemes in respect of rights built up in the past. These differences reflect the change in social attitudes over the last 60 years and the subsequent introduction of new forms of legal relationships. As new groups have been brought into survivor benefit provision, changes have generally been applied prospectively to benefits built up from the point of that change.

The Government support equal treatment of survivors of all legal relationships, and Parliament provided that survivor benefits must be built up equally for all these groups on accruals from 5 December 2005 (when the Civil Partnership Act 2005 came into force).

The Walker judgment has clearly changed the legal position relating to survivor benefits in respect of same-sex unions, and the Government have acted; public service pension schemes will now implement changes to provide that survivors of registered same-sex civil partnerships or same-sex marriage will be provided with benefits that replicate those provided to widows of opposite-sex marriages, with the exception of specific schemes where survivor benefits depend on making the correct contributions. As was made clear earlier in this statement, private pension schemes must take advice and act accordingly in complying with the judgment.

Following careful consideration of the review’s findings, the Government have concluded that, aside from those changes brought about by the Supreme Court judgment, they will not make any further retrospective changes to the existing provisions in respect of occupational pension schemes to equalise survivor benefits. While this means that the differences in survivor benefits for accruals in past periods will remain for some, these will work their way out of the system in time.

[HCWS1690]