Man wins equal pension rights for husband at supreme court

Gay Wedding - Exchanging Rings

Aegon's thoughts

As you will read in The Guardian article below, yesterday’s court ruling set a precedent for same-sex couples to secure equal pension benefits. 

Aegon's Head of Pensions, Kate Smith commented."This week’s ruling is a significant step forward in terms of pensions equality and will help ensure that all same-sex partners are treated fairly. The ruling related to a defined benefit scheme and it will increase the cost of these schemes for their employers, but this is surely a small price to pay for fairness and equality.

Increasingly, couples cohabit rather than get married or enter a civil partnership. But should the unthinkable happen and their partner dies, it’s important they take steps to make sure they receive any survivors’ pension and any death in service lump sums payable, even if they aren’t financially dependent on their partner. A little bit of planning will make the process less stressful, allowing payments to be made in a timely way."

Protect your loved ones

For those in defined contribution pension schemes, who want to ensure their loved ones benefit from their pension, there are a few considerations to think about. 

Nominate your beneficiaries

The simplest way to make sure your partner or loved one is entitled to benefits is to name them as a beneficiary. When people initially join a pension, they will usually be asked to sign a form stating what they wish to happen to their pension in the event of their death. For some schemes, if you aren’t married or in a civil partnership, the survivor’s pension is payable at the discretion of the trustee, but making your wishes known will increase your partner’s chances. Of course, if you join a pension at a young age, you may not yet have a beneficiary in mind so it’s important to come back to the form at a later date and make sure the paper work is in order. It’s possible to update your nomination at any time by contacting your scheme or pension provider

Ask about the scheme rules

To find out whether there are any pension scheme rules limiting who the survivor’s pension can be paid to. Some schemes may set out a specified time for cohabiting couples to be entitled to a survivor’s pension.  

 Pension freedoms

The introduction of the pension freedoms in 2015 have led to a significant change in the way defined contribution pensions can be passed on in the event of your death. Prior to the freedoms, the majority of people bought annuities and on death, there were no further payments unless the annuitant had purchased a built-in spouse’s or dependant’s pension. However, with more people now leaving their pension invested through drawdown, any assets can be passed on tax free more flexibly to any nominee if death occurs before age 75 and at the nominee’s nominal tax rate beyond 75. It’s important to nominate who you would like to receive any unused pension funds.

Make a will

A will ensures there’s a process in place for dividing your estate in the event of your death.   Although pensions don’t generally form part of your estate, without a will, your estate is governed by the rules of intestacy which can be very prescriptive, causing significant settlement delays and may lead to your property being allocated to someone you may not have intended to receive it. Cohabiting couples don’t currently benefit from the intestate rules so it’s important that both partners make a will, naming each other as a beneficiary.  

Read the article from The Guardian 

A gay former cavalry officer has won a legal battle to provide his husband with equal pension rights in a landmark discrimination case at the supreme court.

The unanimous judgment, which could benefit thousands of couples, will ensure that should John Walker die first, his partner will have access to an income of about £45,000 a year for life. It may also impose unexpected liabilities on pension funds.

Lawyers for the human rights organisation Liberty, which represented Walker, argued that a same-sex husband should enjoy the same pension rights as a widow. Under current law, Walker’s husband would receive only about £1,000 a year.

Walker, 65, has been with his husband, a former computer executive who is 52, since 1993. The Civil Partnership Act 2004 came into force in December 2005. They entered into a civil partnership in January 2006, which was later converted into marriage.

Delivering the judgment, Lord Kerr said: “The salary paid to Mr Walker throughout his working life was precisely the same as that which would have been paid to a heterosexual man. There was no reason for the company to anticipate that it would not become liable to pay a survivor’s pension to his lawful spouse.”

To deny his partner access to the funds would amount to discrimination on the grounds of sexual orientation, he added, even though the pension rights were earned before the Civil Partnership Act came into force.

Kerr said: “Mr Walker’s husband is entitled to a spouse’s pension calculated on all the years of his service with Innospec [the chemicals company where he worked], provided that at the date of Mr Walker’s death, they remain married.”

The judges’ decision was based on an EU framework directive from 2000 guaranteeing gender equality under employment law. An employment appeal tribunal and the court of appeal had previously declared that the 2010 Equality Act permitted firms to restrict benefits generated by periods of service before 2005.

Welcoming the decision, Walker said: “I am absolutely thrilled at today’s ruling, which is a victory for basic fairness and decency. Finally this absurd injustice has been consigned to the history books – and my husband and I can now get on with enjoying the rest of our lives together.

“But it is to our government’s great shame that it has taken so many years, huge amounts of taxpayers’ money and the UK’s highest court to drag them into the 21st century. In the years since we started this legal challenge, how many people have spent their final days uncertain about whether their loved one would be looked after? How many people have been left unprovided for, having already suffered the loss of their partner?

“What I would like from Theresa May and her ministers today is a formal commitment that this change will stay on the statute books after Brexit.”

Emma Norton, Liberty’s lawyer who acted for Walker, said: “We are delighted the supreme court recognised this pernicious little provision for what it was – discrimination against gay people, pure and simple.

“But this ruling was made under EU law and is a direct consequence of the rights protection the EU gives us. We now risk losing that protection. The government must promise that there will be no rollback on LGBT rights after Brexit – and commit to fully protecting them in UK law.

“How else can John be sure he and others like him have achieved lasting justice today?”

The Department for Work and Pensions has warned that giving retrospective effect to the EU framework directive would impose costs on pension schemes.

A government spokesperson said: “We are reviewing the implications of this judgment in detail and will respond in due course.

“The rights of same-sex couples have been transformed for the better since 2010, including the introduction of same-sex marriage and legislation to ensure that pensions are built up equally for all legal partnerships.”

This article was written by Owen Bowcott Legal affairs correspondent from The Guardian and was legally licensed through the NewsCred publisher network. Please direct all licensing questions to legal@newscred.com.

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