The Supreme Court, this week, handed down a landmark judgment which could ensure equal pension rights for gay married couples. It held that if Mr Walker dies, his husband is entitled to a spouse’s pension, provided they remain married.
Mr Walker retired from his employment with Innospec Ltd in March 2003, having worked for the company since 1980. He paid into the firm’s pension scheme throughout his employment.
Mr Walker is gay and has lived with his partner since 1993. They applied for a civil partnership in December 2005, and this was registered on 23 January 2006. They are now married.
Following the registration of the civil partnership, Mr Walker sought confirmation from Innospec that in the event of his death, they would pay the spouse’s pension to his civil partner. They refused, relying on an exemption in the Equality Act 2010 which provides that it is lawful to prevent or restrict access to a benefit:
- Where the right to that benefit accrued before 5 December 2005; or
- Which is payable in respect of periods of service before that date.
Accordingly, Innospec argued that the benefits would not include all the contributions Mr Walker had made into the pension scheme prior to 2005. If Mr Walker had married a woman, the spouse’s pension she would be entitled to would amount to approximately £45,000 per year. In comparison, prior to yesterday’s judgment, Mr Walker’s husband would be entitled to approximately £1,000 per year (the statutory guaranteed minimum).
The Supreme Court ruling
In 2011, Mr Walker lodged a claim to the Employment Tribunal alleging that Innospec had discriminated against him on the ground of his sexual orientation. After a long-fought battle through the Employment Appeals Tribunal, and the Court of Appeal, this claim eventually reached the Supreme Court.
The Supreme Court unanimously held that Mr Walker’s husband will be entitled to a spouse’s pension calculated on all the years of his service with Innospec, provided that at the date of Mr Walker’s death they remain married. It also held that in so far as it restricts payment of benefits based on a period of service before December 2005, that provision of the Equality Act 2010 is incompatible with European law, and must be dis-applied.
This ruling could have far-reaching implications for pensions’ providers, who will be required to make provision for same-sex couples on the same basis as heterosexual married couples in the future. Many commentators have warned that this change could cost both private and public sector pension schemes millions of pounds. It also has the potential to escalate if other groups now claim that they are also being discriminated against in relation to pension payments.
Hugh James provides a variety of advice in relation to pension schemes. Should you be involved in a pensions dispute then please contact Abigail Flanagan of our Pension Disputes Team on 02920 660 589; if you require advice on your pension scheme then Louise Price of our Employment & Pensions Team can be contacted on 02920 391 022 or alternatively, if you require any independent financial advice regarding your pension then please contact Suzanne Browne on 02920 660 565.