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Out-Law News 2 min. read

UK government: "complex" same-sex survivor benefit issues require further consideration


It would cost the UK public sector around £2.9 billion and private sector £400 million to "reduce or eliminate" the remaining differences between survivor benefits for heterosexual married couples and those in same-sex civil partnerships, according to a government report.

The government said that it would need to "consider these costs and the potential impact on pension schemes, along with the wider consequences of making retrospective changes to scheme rules", before making a decision about whether the law should be changed to remove these differences.

However, the Trade Unions Congress (TUC) called on the government to act quickly to prevent more people from losing out when their partners pass away. Earlier this year, the employment appeal tribunal (EAT) ruled against a man who tried to challenge provisions in the Equality Act limiting survivor benefits for civil partners to those that accrued after the Civil Partnership Act was introduced in 2005.

"It is disgraceful that some widowers, surviving civil partners and same-sex spouses are losing out on thousands of pounds of retirement income, simply because of their gender or sexual orientation," said Frances O'Grady, the TUC's general secretary. "This discrimination is especially widespread in the private sector, where one in four defined benefit schemes discriminate against same-sex couples."

"Thankfully, the report shows that it doesn't cost much to put right the injustice. The £400m cost to their private sector schemes is equivalent to just 0.03% of pension liabilities. While the costs across public sector schemes are greater, the £2.9bn in extra liabilities that would be paid out over several decades is easily affordable," she said.

Under the current law, a surviving civil partner's entitlement to claim so-called 'death benefits' from his or her deceased partner's defined benefit (DB) occupational pension scheme can be restricted to rights the scheme member built up from 5 December 2005, the date that civil partnerships were introduced. The same rules apply to partners in same sex marriages, which were introduced in March this year.

Last year, during parliamentary debate on the Marriage (Same Sex Couples) Act, the government decided to carry out a review of pension rights and civil partnerships. Although some schemes have voluntarily decided to treat civil partnerships and same sex marriages in the same way as heterosexual marriages for the purposes of calculating entitlement to these benefits, there is currently no legal requirement to do so in respect to rights accrued before 2005.

According to the TUC, many widowers are also disadvantaged by current pension rules as gender equality in accruals only goes back to 1990 in the private sector, and 1988 in the public sector. In 2011, the widower of a GP unsuccessfully challenged these rules. He receives about £3,200 less per year than a widow would as his wife's pension scheme membership between 1982 and 1988 is discounted, it said.

In its report, the government said that it was committed to equal treatment between civil partners and same-sex married couples, and heterosexual married couples.

"That is why [we] have brought forward legislation to ensure that survivor benefits are now built up equally for all legal relationships," it said in its report.

"However, pensions are unique in that the consequences of actions that were taken in the past are crystallised today, and therefore reflect the inequalities of the past in today's pension outcomes. We know now that many schemes in the private sector have already equalised survivor benefits despite the cost. The review finds that reducing or eliminating the remaining differences in survivor benefits in the private sector would cost £0.4bn, but that this cost would be concentrated in a relatively small group of schemes. Furthermore, the cost to the public service schemes would be £2.9bn," it said.

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