Walker v Innospec Ltd [2017] - Same-sex marriage and inequality in pensions – Schemes must now provide survivor benefits to same-sex spouses and civil partners on the same basis as opposite sex spouses

Posted by John Hamilton on
In the recent case of Walker v Innospec Limited [2017],  the Supreme Court ruled that a pension scheme must provide benefits for a surviving spouse in a same-sex marriage on the basis that it provides benefits for the surviving spouse in an opposite sex marriage.

Mr Walker had been in a relationship with his husband since 1993, entered into a civil partnership with him when this was allowed in 2005 and is now married to him. Had he married a woman, she would have been entitled to the full pension provided by his employer's pension scheme in the event of his death.

However, the Innospec Scheme limited any pension to the survivor of a same-sex spouse/civil partner so that it was only based on pensionable service after 5 April 2005. In Mr Walker's case, the difference in survivor benefits was stark. If only post 5 April 2005 pensionable service was included, his spouse would have received a pension of around £1,000 per annum. If pre 5 April 2005 service was included, the survivor pension would be around £45,700 per annum.

Mr Walker challenged the temporal limitation in the Equality Act 2010 which allowed employers to only take into account rights accrued since the Civil Partnership Act 2005 came into force on 5 December 2005 when providing survivor benefits for a civil partner or spouse of the same sex. Many employers have relied on this provision when giving effect to same-sex spouse/civil partner rights.

The Supreme Court held that the temporal limitation provision within the Equality Act was incompatible with the European equal treatment directive which prohibits unequal treatment on grounds of sexual orientation. As such, it therefore held that his husband should receive a full widow's pension should Mr Walker pre-decease him.

Schemes that have applied the temporal limitation will need to change their practices going forward. Employers and trustees should also investigate whether their scheme has paid, or is currently paying, any same sex civil partner/spouse benefits on an incorrect basis. This is particularly important given that the Walker decision will have retrospective effect.

The case gave no specific guidance on how to handle inequality over GMPs, which raise wider issues of gender inequality. However, within the next year or so we may have guidance from the court on this issue. In May, Lloyds Bank launched a joint legal bid with its pension trustees and unions to get a definitive ruling on:

  • whether there is an obligation for trustees to adjust benefits to ensure that GMP's are equal,
  • if there is a correct method for doing this, and
  • how the trustees should exercise their powers.

About the Author

John advises corporate and trustee clients on pensions law and is a director of Blake Morgan's Pension Trustees Limited, the firm’s independent trustee company.

John Hamilton
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