14 May 2013
Equal pension rights for civil partners
As the law currently stands, employers and pension funds are permitted to exclude civil partners from spousal benefits under a pension scheme the rights to which accrued prior to 5 December 2005, which is when Section 1 of the Civil Partnership Act 2004 (CPA) came into force.
This exemption, which is now contained in paragraph 18(1) of Schedule 9 of the Equality Act 2010, was recently challenged in a case brought by Liberty on behalf of a member of the Innospec pension scheme.
John Walker worked for the Cheshire-based chemicals group for more than 20 years and has been in a relationship with his civil partner for most of that time. The couple entered into a civil partnership in 2006. It was Mr Walker’s expectation that, upon his death, his partner would receive the same benefits under the company’s pension scheme as would a surviving spouse.
Innospec, however, relied on the exemption and refused to treat Mr Walker’s civil partner as a ‘spouse’.
By Mr Walker’s reckoning, were he to die, his partner would receive a pension of £500 per annum. Were he married, however, his widow would receive more than £40,000 per annum.
The Employment Tribunal (ET) found that although the Innospec pension scheme complied with domestic legislation, it was in breach of the EU Equal Treatment Directive. In the ET’s view, civil partners should receive benefits based on the deceased’s full length of service, not just from the date on which the CPA was introduced.
The case is now subject to appeal.
Pension schemes can often present opportunities for a challenge under human rights legislation. Our experienced employment law team can review your scheme rules and employment policies generally and suggest appropriate changes to limit the risk of a legal challenge.