Pensions And Same Sex Relationships: The Marriage (Same Sex Couples) Act 2013 And EAT Decision In Innospec v Walker

The majority of the provisions of the Marriage (Same Sex Couples) Act 2013 ('the Act') come into force on 13 March 2014, extending marriage to same sex couples.

For occupational pensions schemes, the effect of the Act and the Equality Act 2010 is to give surviving same-sex spouses similar occupational rights to civil partners:

Contracted-out survivors' benefits relating to service on or after 6 April 1988 All other survivors' benefits relating to service on or after 5 December 2005 However, the decision to treat same-sex spouses in the same way as civil partners has been controversial; so the government agreed to include a provision in the Act requiring a review of the differential treatment between opposite-sex survivor benefits and same-sex survivor benefits. The review is now underway and the Secretary of State is required to report by 1 July 2014. So although the Employment Appeal Tribunal has allowed the appeal in Innospec v Walker - and upheld the Equality Act provisions regarding surviving civil partners - we may still soon find that civil partners/same sex marriages are to be treated the same as opposite sex marriages for all pensionable service.

Occupational pension scheme rules existing before 13 March 2014

The effect of the Act is that marriage is extended to same sex couples. This includes the interpretation of existing legislation with references to "marriage" to be read as including a same sex marriage.

"Private legal instruments" - which will include a pension scheme's trust deed and rules - will not be affected if the instruments were entered into before the change of law. This means that references to "marriage" or "spouse" will be interpreted as meaning an opposite sex relationship only.

The Equality Act 2010 though imposes an overriding non-discrimination rule on occupational pension schemes. So trustees will have to treat survivors of same-sex marriages in the same way as a survivor of an opposite sex marriage, but only for pensionable service from 5 December 2005 (when the civil partnership legislation came into force), and to contracted-out rights accruing post 5 April 1988.

What do trustees and employers need to consider?

Although the non-discrimination rule is overriding, trustees should consider updating scheme documentation in due course. Trustees are given a power under the Act to amend rules by resolution, but cannot go further than the minimum requirements of the Act without employer agreement Trustees and...