The Supreme Court has ruled that an exemption in the Equality Act 2010, which allows schemes to exclude same-sex partners or spouses from a spouse's pension accrued before December 2005, is discriminatory and breaches EU equality laws.
The unanimous ruling means the provision in the Equality Act is immediately disapplied - and any schemes taking advantage of the exemption will be breaking the law.
Unless the rules of your scheme are more generous than the law has required, your scheme will now be required to calculate a spouse's pension for same-sex marriages and civil partnerships in exactly the same way as for heterosexual marriages. This could mean potential additional pension liabilities for your scheme. In the Walker case this could result in possibly an additional £45,000 annual pension for his husband, if they remain married.
This not only affects pensions coming into payment after the judgment; your scheme could also face claims from those same-sex survivors of members who have already died.
You should check your scheme rules to see what they say about same sex spouses. If, as they will in most cases, they limit spouse's and civil partners' pensions to post-December 2005 accrual, they will need amending. Your scheme will be non-compliant in the meantime, and in the event of the death of a member with a same-sex spouse or civil partner before you have changed the rules, you will need to augment the survivor's benefits in order to stay legal.
You should also check your scheme history to see whether there are any potential claimants for additional benefit.
You may also wish to contact your scheme actuary to find out if the case has a material impact on your scheme liabilities.
Let us know if you would like us to check your rules for you. We can quickly let you know the position, and if an amendment is needed, draw up the necessary document.
This publication is intended for general guidance and represents our understanding of the relevant law and practice as at July 2017. Specific advice should be sought for specific cases. For more information see our terms & conditions.