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The Civil Partnership Act 2004 (“the Act”) came into force on 5 December 2005. The Act is designed to provide a system of registration for same-sex relationships and does not apply to heterosexual couples.
The Act gives members’ surviving civil partners certain rights under occupational pension schemes, but not all the rights that a surviving spouse would have to pension benefits arising on a member’s death.
Schemes must provide civil partners with the following as a minimum:
- (if applicable) contracted-out survivors’ benefits relating to service on or after 6 April 1988 (the date that contracted-out benefits for widowers were introduced); and
- all other survivors’ benefits relating to service on or after 5 December 2005.
It is open for the trustees of a pension scheme (in conjunction with the sponsoring employer, as there may be cost implications) to provide benefits for civil partners in excess of what is required. For example,
- treat the civil partner as if he / she had been a surviving spouse for all pensionable service, so that he / she would be entitled to exactly the same benefits that a spouse would have been entitled to in respect of both contracted-out and non-contracted-out benefits;
- provide benefits based on contracted-out and non-contracted-out pensionable service since 6 April 1988. Some trustees regard the separation of contracted-out rights and non-contracted-out rights as an administrative nuisance and prefer the cost of the larger benefit to the cost of an administrative split.
The changes (other than the contracting-out changes) are overriding so amendments may be made at any time. However, in the meantime, trustees must of course operate the scheme in accordance with the Act.
Contracted-out schemes should have amended their rules to accomodate civil partners.
Changes which provide that, after a member's death, a civil partner will be treated in the same way as a widow or widower, are not subject to section 67 of the Pensions Act 1995 (Modification of schemes).
Right to full spouse benefits?
As noted above, civil partners don't get the full benefits a spouse would be entitled to. This limitation was first called into question by the 2008 European Court of Justice decision in Tadao Maruko. That decision suggested that the limitations imposed by UK legislation might be unlawful. Now, members of a UK pension scheme are challenging the limitations in a case which is due to be heard before the Employment Tribunal in 2012. The company in question has already agreed to amend the pension scheme to give civil partners the same benefits as spouses but maintains that the old terms were not unlawful. It intends to defend the claim of discrimination as grounds of sexual orientation.
Author: Caroline Legg