Pensions  

Blow to gay rights as tribunal makes pensions ruling

The London appeals tribunal was ruling on the case of a former cavalry officer, Mr John Walker, who took his employer Innospec to Court after a 23-year career.

In a 29-page judgement, the three people presiding – the Hon. Mr Justice Langstaff, Mr A Harris and Mrs M McArthur – overturned a previous decision on Mr Walker’s pensions arrangements by a tribunal in November 2012.

Mr Walker had taken chemicals company Innospec to court after it refused to agree to pay his civil partner the equivalent of a full widower’s pension in the event of his death.

The case hinged on whether UK law contravened European law by allowing employers and pension scheme trustees to restrict the amount of benefits payable on the death of a member in a civil partnership.

Instead of paying the full rights that would be payable to a widow or widower, UK law allows pension schemes to take account only of the rights the scheme member had built up from 5 December 2005 (when the Civil Partnership Act came into force) in calculating benefits for a surviving civil partner.

The initial tribunal ruled that employers that used the exemption for civil partners were illegally discriminating against gay and lesbian members.

However, last week, the appeals tribunal ruled that the original tribunal had been wrong to think that the backstop breached European law. Sex equality law had not needed to be retrospective, so the law preventing discrimination on the grounds of sexuality similarly did not need to apply to the past.

Simon Tyler, pensions lawyer for Pinsent Masons, said: “This ruling may come as a relief to businesses who may have been concerned about an increase in pension scheme liabilities. However, it will also be seen as a blow to the rights of civil partners who do not have the same rights to death benefits under a pension scheme as married couples.”

The government has agreed to complete a review of the law by 1 July 2014.

Background:

According to law firm Herbert Smith Freehills, the Marriage (Same Sex Couples) Act 2013, key provisions of which are due to come into force on 13 March, will allow same-sex couples the right to a civil marriage in England and Wales from 29 March.

Same-sex couples already have a right to register as civil partners under the Civil Partnership Act 2004. The Act does not remove the availability of civil partnerships going forwards but does allow those in a civil partnership to convert that relationship into a marriage.

For the purposes of occupational and state pensions, same-sex married couples will be treated in the same way as civil partners are currently.

Adviser Comment

Corrine Parkes, co-founder of London-based advisory firm Finances4Divorce, said: “Same-sex couples going through a separation or divorce need to carefully consider their pension provision and whether they may be entitled to a share in their partner’s pension fund. The Family Courts will divide all assets, including pensions and individuals need to be mindful of their future pension prospects and not simply their immediate income and capital needs.”