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Pension rights for unmarried partners

The Supreme Court has ruled this week that the Local Government Pension Scheme for Northern Ireland unfairly discriminated against an unmarried surviving partner of a Scheme member. What implications could this have for other pension schemes and what are the next steps to take?

The facts of the case

Ms Denise Brewster was engaged to Mr McMullen, who was an active member of the Scheme. They had been in a relationship for 15 years and owned a house together. Mr McMullen died suddenly in 2009 aged 42, just days after the couple were engaged to be married. The Northern Ireland Local Government Officers' Superannuation Committee, the statutory body responsible for administering the Scheme, denied Ms Brewster any spouse's or survivor's benefit from the Scheme on the basis that she was (a) not the spouse of the deceased and (b) because no nomination form had been completed in her favour.  Ms Brewster consequently brought an application for judicial review, which was heard by the Supreme Court.

The requirement for unmarried members to complete a nomination from in order for their partner to receive a survivor's pension the Scheme form was central to the Supreme Court's unanimous decision in Ms Brewster's favour. Married members do not have to do this – their surviving spouse would receive an equivalent spouse's pension automatically as of right.

The Supreme Court held that retaining this requirement amounted to an unwarranted difference of treatment for unmarried surviving partners compared with spouses and that there was no objective justification for this. The court ruled that Ms Brewster is now entitled to receive a survivor's pension from the Scheme.


Public sector schemes

Northern Irish regulations governing the Scheme will need to be amended to remove the requirement to submit a nomination form.  Changes will not be required to be made in relation to the applicable regulations governing the Local Government Pension Schemes in England, Wales and Scotland, as the requirement for the completion of nomination forms were abolished in 2014. 

However, the Supreme Court's ruling is likely to have wider ramifications for other pension schemes in both the public sector. For example, the NHS and Civil Service Pension Schemes each require a nomination form to be completed by unmarried members wishing to secure benefits for their partner. It seems likely that such public sector schemes will need to be updated.

Private sector schemes

The impact of the Supreme Court ruling on private sector pension schemes remains to be seen.

Many private sector pension schemes do not currently provide any survivor's pensions for unmarried surviving partners. Instead they require the survivor to be either married or in a registered civil partnership with the member as at the date of death. Schemes which provide for pensions to be payable to an unmarried survivor must ensure the relationship between the member and survivor meets certain strict criteria specified in the Finance Act 2004 to avoid the payment of punitive tax charges. 

It is worth noting that the practice of treating categories of survivor differently depending on their marital status is lawful. For example, schemes are permitted to provide limited survivor's pensions to surviving civil partners and same-sex spouses. Whilst some schemes provide the same benefits as for opposite sex spouses, not all do and this different treatment is both permitted in legislation and recently upheld by the Employment Appeal Tribunal judgment of Innospec v Walker. This position appears at odds with the Supreme Court ruling in Ms Brewster's case so it is not clear whether the recent ruling will have a future impact in this regard.

The Supreme Court decision does not have any application to the common practice of requesting scheme members to submit 'expression of wish' forms in relation to whom a lump sum death benefit should be payable. Most private and public sector schemes ask members to complete these forms and we do not consider that this practice will change, as:

  • the requirement to complete the forms applies to all members irrespective of marital status; and
  • such forms are normally non-binding upon trustees, who will normally have the discretion to determine which beneficiaries will receive the proceeds of any lump sum. 

Next steps 

We will monitor further developments closely in relation to this, which are likely to include amendments to the rules and administrative practices of a number of public sector pension schemes. 

Unison has reported that a fresh legal case is due to be heard upon similar facts as in the case of Ms Brewster, which will hopefully shed more light of the true extent of the Supreme Court's ruling.

In the meantime, this is a timely reminder for:

  • employers and trustees to be clear on the applicable benefit provisions in their schemes for different categories of members' survivors;
  • employers to review their scheme rules to ensure they provide for the intended level of benefits; some employers may consider revising their scheme rules to bring the benefits payable into line with the Supreme Court ruling; and 
  • trustees to review their administrative practices and assess whether any adjustments are required to be made. 

This publication is intended for general guidance and represents our understanding of the relevant law and practice as at February 2017. Specific advice should be sought for specific cases. For more information see our terms & conditions.

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