Pension scheme forced to payout to unmarried partner

Pension scheme forced to payout to unmarried partner

A Local Government Pension Scheme has been told it must pay a survivor's pension to the unmarried partner of a dead member, more than seven years after his death.

The Northern Ireland Local Government Officers’ Superannuation Committee scheme had refused to pay the survivor's pension on the grounds that the member had not nominated his partner as the beneficiary - something it required for unmarried couples.

But in a ruling today (8 February), the Supreme Court ordered that this provision be "disapplied" and that the pension scheme pay the full survivor's pension - a move that was welcomed by many in the industry.

Article continues after advert

In 2009, the LGPS regulations stipulated that unmarried co-habiting partners must be nominated by their partner in order to be eligible for a survivor's pension.

The survivor also had to show that he or she had been a cohabitant for at least two years before the date on which the member had both sent the nomination and died.

There were no such requirements for married couples.

In the case in question, the woman, named Denise Brewster, initially won a High Court case against the scheme. However, the High Court decision was overturned in the Court of Appeal.

However, between the High Court decision and the Court of Appeal decision, the LGPS regulations in England, Scotland and Wale changed, scrapping the special requirements for unmarried partners. 

But since the scheme in question was based in Northern Ireland, this rule change did not apply.

Justice Kerr ruled that "the appellant is entitled to receive a survivor’s pension under the scheme".

Steve Webb, director of policy at Royal London, and former pensions minister, welcomed the ruling, saying it was "totally unacceptable for cohabiting couples to be treated as second class citizens".   

"With more than six million people living together as couples and the numbers rising every year, this is an issue that needs to be addressed as a matter of urgency.  

"We need pension scheme rules which reflect the world we live in today, and not the world of fifty years ago," he said.

The ruling was also welcomed by union Unison, with general secretary Dave Prentis saying: "The last thing a recently bereaved person needs is to have to fight for a pension that’s rightfully theirs. This thankfully will no longer be necessary."

Old Mutual Wealth's Jon Greer, meanwhile, said the ruling served as a wake-up call.

"For individuals that hold a defined benefit pension, the message is clearly that they should not make any assumption about who will inherit the pension if they pass away," he said, urging members to check the scheme provisions.

"While it is fairly standard for a spouse to benefit automatically on the member’s death, other family members may not and could be left short-changed if they work on the assumption that they will receive benefits.

"There are lots of example where this could be damaging, not only in a financial sense, but also to the relationships between surviving family members," he said.​