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28th January 2013

Pension Rights for Civil Partners

A recent tribunal decision in Walker v Innospec Limited and others has questioned the position of pension rights for civil partners in occupational pension schemes.

It was thought that civil partners had to be treated the same as spouses on the death of a member of a pension scheme in relation to completed pensionable service on or after 5 December 2005 and not before, a position still reflected in many pension schemes.

This decision represents a significant variation and it is understood that the case has been listed for appeal at the Employment Appeal Tribunal.

In this case, the company’s occupational pension scheme had been amended in accordance with the Civil Partnership Act 2004 (the “CPA”), to comply with the legislative requirements to provide equal pension benefits to civil partners.

The Equality Act 2010 (the “EqA”) provides in paragraph 18 of Schedule 9 that the requirement to treat civil partners the same as spouses is not contravened by the prevention or restriction of a benefit accruing before 5 December 2005, which is the date the CPA came in to force.

However, the Claimant in this case, Mr Walker, claimed that the restriction towards his civil partner to any eventual pension, by limiting pensionable service from 5 December 2005 was discriminatory and contrary to the Equal Treatment Framework Directive, which created a general structure for equal treatment and non-discrimination in the European Union.  In financial terms, limiting the Claimant’s pensionable service to 5 December 2005 onwards had the affect of reducing his spouse’s pension from around £41,000 a year (had he been married to a woman at the time of his death) to approximately £500 per year.

The tribunal found for the Claimant and concluded that Mr Walker had suffered both direct and indirect discrimination on the grounds of his sexual orientation.  In formulating the decision, the judge held that paragraph 18 of Schedule 9 to the EqA exempting service before 5 December 2005 did contravene the above Equal Treatment Framework Directive. Despite this formulation, the judge concluded that this was not a departure from the EqA, as the fundamental intention of Parliament was to prohibit discrimination and there was nothing to suggest a contrary intension.

As outlined above, we expect the decision to be appealed by the Respondent in this case and, therefore, we await clarification of this point.

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