Court fails to back equal pension benefits to civil partners

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Court fails to back equal pension benefits to civil partners

Pension funds will continue to be permitted to pay less to gay and lesbian widows or widowers, following a Court of Appeal ruling today (6 October).

It has dismissed John Walker’s appeal, with the effect of the ruling being that pension schemes do not need to provide civil partners of pension scheme members with benefits in respect of service before 5 December 2005.

Mr Walker had been a member of the occupational pension scheme run by his former employer, Innospec, since 1980 and had been receiving a pension from the scheme since his retirement in 2003.

He had been living with his male partner for some time before retirement and the two entered into a civil partnership “at almost the first opportunity” after the law changed, in January 2006.

Under the scheme rules, had he been married, his wife would have been entitled to a pension worth two thirds of his “considerable” annual benefits if she had survived him.

However, because his service with the company occurred entirely before the law changed, an Employment Appeals Tribunal ruled the most his partner could receive if he survived Walker was around £500 a year.

Mr Walker brought a claim that he had been unlawfully discriminated against on the grounds of his sexual orientation to the employment tribunal, which ruled that although the scheme rules were permitted under the Equality Act, the act itself was incompatible with European Union law.

Alastair Meeks, pensions partner at Pinsent Masons, said: “After the Employment Appeals Tribunal decision in 2014, the government carried out a review of same sex survivors’ benefits but failed to take steps in response: it merely pledged to consider the findings very carefully.

“While the secretary of state has the power to change the law for the purpose of eliminating or reducing the differences in survivors’ benefits, the outcome of the Innospec v Walker appeal may deter the government from taking any action now.

“The original Employment Appeals Tribunal decision was controversial, and many pension schemes had voluntarily chosen to treat civil partnerships in exactly the same way as opposite sex marriages.”

However, Mr Meeks said the cost to schemes of providing fully equalised benefits could be substantial – government estimates in excess of £3bn between private and public sector pension schemes have been reported.

TUC general secretary Frances O’Grady said today’s ruling was a real disappointment.

“Had the court ruled in favour of Mr Walker it would have removed one of the last remaining obstacles to true equality for gay and lesbian couples.

“It is now time for the government to act to end this injustice. It is over a year since its review reported on the ongoing discrimination in survivor pensions and ministers have done nothing in response.”

emma.hughes@ft.com