Pension Reform.

Equal Pension Rights for Same-Sex Spouses and Civil Partners.

A landmark Supreme Court judgment confirmed that same-sex spouses and civil partners must receive equal treatment when survivor benefits are calculated under an occupational pension scheme. The decision in Walker v Innospec Ltd removed an important area of pension discrimination and ensured that pension rights earned before same-sex relationships received legal recognition could not simply be excluded from a survivor's pension.

What Was the Walker v Innospec Case About?

Mr Walker worked for Innospec between 1980 and 2003 and paid into the company's occupational pension scheme. He had lived with his male partner since 1993. They entered into a civil partnership in 2006 and later married. Under the pension scheme's rules, Mr Walker's husband would have received a much smaller survivor's pension than a wife in an opposite-sex marriage would have received. The scheme argued that it was only required to take account of pensionable service completed after 5 December 2005, when civil partnerships became legally available. Had Mr Walker been married to a woman, his wife would have received a survivor's pension based on his full period of pensionable service.

What Did the Supreme Court Decide?

In July 2017, the Supreme Court unanimously ruled in Mr Walker's favour. The Court decided that his husband was entitled to a survivor's pension calculated on the same basis as the pension that would have been paid to a wife in an opposite-sex marriage. This meant that Mr Walker's pensionable service before December 2005 could not be excluded merely because his spouse was a man.

Why Was the Decision Important?

The judgment confirmed that paying a reduced survivor's pension because the scheme member was married to a person of the same sex amounted to unlawful discrimination. Before the judgment, some pension schemes relied on an exception within the Equality Act 2010 to restrict benefits for same-sex spouses and civil partners to pensionable service completed after December 2005. The Supreme Court held that this restriction was incompatible with the legal prohibition against discrimination on grounds of sexual orientation. The judgment affected other pension scheme members whose same-sex spouses or civil partners would otherwise have received reduced survivor benefits.

What Is a Survivor's Pension?

Some workplace pension schemes provide continuing payments to a member's spouse or civil partner after the member dies. These are generally known as survivors’, dependents’ or spouses’ pensions. The amount payable will depend on the pension scheme's rules, the member's pensionable service and the type of pension arrangement. The Walker judgment concerned an occupational defined-benefit pension scheme. It does not mean that every pension automatically provides identical death benefits, because entitlement will still depend on the particular scheme rules. However, a pension scheme should not calculate a same-sex spouse's or civil partner's benefit less favourably because of their sexual orientation.

Does the Ruling Apply to Earlier Pensionable Service?

Yes. The central issue in the Walker case was whether pensionable service completed before civil partnerships were legally recognised could be used when calculating a same-sex spouse's survivor benefits. The Supreme Court decided that the pension should be calculated using Mr Walker's full pensionable service, subject to the scheme's ordinary rules. The fact that same-sex marriage and civil partnerships were not legally available during part of his employment did not justify reducing his husband's future pension.

Did Brexit Reverse the Decision?

No. Brexit did not automatically overturn the Supreme Court's judgment or remove equal pension rights for same-sex spouses and civil partners. The decision remains part of UK law unless it is displaced by later legislation or overturned by a court with authority to do so. Pension schemes should therefore continue to administer survivor benefits consistently with the Walker judgment and the Equality Act.

Are Married Couples and Civil Partners Treated Equally?

Same-sex spouses and civil partners should generally receive equal treatment in relation to occupational pension survivor benefits. The exact entitlement can still vary according to:

• The type of pension scheme
• The scheme's governing rules
• The dates of the member's pensionable service
• Whether the pension is an occupational, personal or State Pension
• Whether the surviving person satisfies the scheme's definition of a dependant

Different rules can apply to unmarried partners. Some schemes provide benefits for a qualifying cohabiting partner, while others require a marriage, civil partnership, nomination or evidence of financial dependence.

Checking Your Pension Rights

Pension scheme members should check what benefits would be paid to their spouse, civil partner or dependant if they died. Useful questions include:

• Does the scheme provide a survivor's pension?
• How is the survivor’s pension calculated?
• Is all pensionable service included?
• Does the scheme require a nomination form?
• Are unmarried partners eligible?
• Will remarriage or a new civil partnership affect payments?

Members should keep nominations and personal details updated, particularly following marriage, civil partnership, divorce, dissolution or separation.

What If a Pension Scheme Offers a Reduced Benefit?

A surviving spouse or civil partner who believes that a pension has been calculated incorrectly should ask the scheme administrator for:

• A written explanation of the calculation
• The relevant scheme rules
• Details of the member's pensionable service
• An explanation of any service that has been excluded
• Information about the scheme's internal dispute procedure

Most occupational pension schemes have an internal dispute resolution procedure. A complaint may also be referred to the Pensions Ombudsman where the matter cannot be resolved directly. Strict time limits may apply to pension, discrimination, and employment-related claims, so advice should be sought promptly.

A Significant Step Towards Pension Equality

The Walker judgment established that historical discrimination could not be used to justify unequal pension benefits in the future. It also demonstrated the importance of examining the practical effect of pension rules. A rule may appear neutral, but it can still be discriminatory if it leaves a same-sex spouse or civil partner with substantially lower benefits. The decision remains an important protection for equal treatment within occupational pension schemes.

Getting Legal Advice

A solicitor specialising in pensions or discrimination law can advise where survivor benefits have been refused, restricted or calculated using only part of a pension scheme member's service. The Pensions Advisory Service's functions are now provided through MoneyHelper, which offers general guidance on workplace and private pensions.