The Marriage (Same Sex Couples) Act 2013
This note highlights how The Marriage (Same Sex Couples) Act 2013 may affect occupational pension schemes and any actions which may need to be taken. The Act is expected to come into force in Summer 2014.
The Act provides that same sex married couples will have the same legal rights as couples of the opposite sex. However, there is an exception for occupational pension schemes that reflects the position which currently applies to civil partners. It will be possible for trustees and employers to choose to limit the non contracted out element of a spouse's pension which would otherwise be payable to a surviving same sex spouse to that accrued for service on or after 5 December 2005 only.
Despite the clarity in the Act, there is uncertainty about the legitimacy of the treatment of same sex married couples and civil partners from that of opposite sex married couples. The Secretary of State is currently considering this point and it is expected that he will provide a review of the situation in summer next year. Such review may conclude that equivalent benefits have to be provided for all service, not just that on or after 5 December 2005.
So what does this mean for trustees?
Subject to the review by the Secretary of State, the trustees of an occupational pension scheme will need to decide whether to restrict the pensions payable to same sex spouses to only that referable to pensionable service on or after 5 December 2005. Presumably trustees will wish to replicate the provisions that otherwise apply to civil partners.
Whatever the outcome of the review, the trustees will need to arrange for an assessment of the scheme rules to ensure that terms such as "married", "husband", "wife", "spouse", "widow" and "widower" are updated if necessary to reflect any agreed position.
If the trustees are willing to provide same sex married couples (and civil partners) with the same rights as opposite sex married couples, scheme amendments can be progressed now. Otherwise, we would recommend that the trustees place this issue on their agenda with a view to making a final decision after the Secretary of State has finalised his review.
If you have any queries about the impact of the Act please do not hesitate to contact the Pensions team at Wrigleys on 0113 244 6100