Survivor benefits – in the news (again)

Jason Shaw

The Supreme Court recently unanimously declared that the unmarried partner of a deceased member should be paid a survivor benefit to which she was not entitled under the scheme rules (the existing rule being unlawfully discriminatory): In the matter of an application by Denise Brewster for Judicial Review (Northern Ireland). Trustees and sponsors of private sector schemes who have been awaiting the outcome of the high-profile Supreme Court case on same-sex survivor benefits in Walker v Innospec might be wondering what, if anything, this new case means for them.

Mostly, they should not panic – for a variety of reasons (given below) the case is unlikely to directly affect private sector schemes. However, the case has received a lot of attention, so schemes should be prepared to field some queries about the survivor benefits they provide.

What was the case about?

  • The claimant (Ms Brewster) was the unmarried, cohabiting survivor of the deceased member. The rules of the public sector pension scheme in question provided that in order for a cohabiting surviving partner to be eligible for a survivor pension, they had to:

          1) be nominated by the member AND

          2) satisfy other substantive criteria about the relationship (including financial dependence/inter-dependence).

  • This type of requirement is different to what is commonly seen in private sector schemes. Ordinarily, members of such schemes will only make nominations/expressions of wish in relation to the discretionary award of lump sum survivor benefits; however, it would be very rare for this to be an eligibility requirement, as it was in the Brewster case.
  • It was not in dispute that Ms Brewster, as an unmarried, cohabiting survivor, was covered by the protection against discrimination in the European Convention on Human Rights – the issue in the case was whether the nomination requirement (which did not apply to spouses or civil partners) could be objectively justified. The ECHR is different to the Equality Act, so the type of claim here (brought in relation to a public sector scheme) is different to a claim that a private sector scheme might see under the Equality Act – being unmarried is not currently a protected characteristic under the Equality Act.
  • The court decided that the nomination requirement was not objectively justified. In fact, it was quite critical about the reasons relied upon.

What, if anything, do private sector schemes need to do?

For the reasons mentioned above, the case is unlikely to directly affect most private sector schemes. However, given the high-profile media coverage of the case and potential confusion about the relevance of nomination forms, trustees may wish to remind members of:

  • the survivor benefits provided by their scheme (including the eligibility criteria), and
  • the importance of keeping expression of wish/nomination forms up to date. Out-dated nominations/expressions of wish are a frequent cause for complaint, including to the Pensions Ombudsman – the Death benefits page on our Pensions in Dispute website looks at this issue in more detail.

Schemes should also be prepared for any follow-up queries about the survivor benefits they provide, especially if there is any perception by members that the rules are unfair.

Jason Shaw is a senior associate at Allen & Overy LLP.

 

Comments published on Pensions Talk do not necessarily reflect the views of Allen & Overy or its clients.

Read comments below or add a comment

Leave a comment

Your email address will not be published. Required fields are marked *