Case law: Lower pension benefits for members' surviving civil partners and same-gender spouses are lawful
Trustees and employers will welcome a Court of Appeal ruling that pension schemes can lawfully provide lower pension benefits for surviving civil partners and same-gender spouses of scheme members.
This update was published in Legal Alert - November 2015
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An employee and member of a company pension scheme worked for his employer from 1980 to 2003, during which time he entered into a civil partnership. The pension scheme provided for continued payment of a pension to a member's spouse after the member died, but payments to surviving civil partners were calculated only by reference to the period after civil partnerships were legally recognised, in December 2005. Civil partners therefore received only a very small pension compared to spouses in the same circumstances. The employee claimed direct discrimination.
An Employment Tribunal ruled that it was direct discrimination. It said that direct discrimination was prohibited by EU law, and relevant UK law should therefore be read as if it was compatible with EU law. This meant the scheme should be read as if the December 2005 cut-off did not apply.
The Court of Appeal disagreed and found that it was not possible to ignore the December 2005 cut-off if that went against the 'express legislative intention' of the UK law. The discriminatory treatment of civil partners was therefore lawful as the law is currently.
The 2013 law introducing same-sex marriages included an equivalent December 2005 cut-off for same-sex spouses' pensions.
- Employers should review whether their pension schemes provide equal benefits for civil partners and same-sex spouses and, if not, whether they wish to change them or not.
Case ref: O'Brien v Ministry of Justice, and Walker v Innospec  EWCA Civ 1000
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