One in four defined benefit pension schemes in the private sector discriminate against same-sex couples

Commenting on a report published today (Thursday) by the government – which estimates that more than one in four defined benefit schemes in the private sector discriminate against same-sex couples – TUC General Secretary Frances O’Grady said:

“It is disgraceful that some widowers, surviving civil partners and same-sex spouses are losing out on thousands of pounds of retirement income, simply because of their gender or sexual orientation.

“This discrimination is especially widespread in the private sector, where one in four defined benefit schemes discriminate against same-sex couples.

“Thankfully, the report published today shows that it doesn’t cost much to put right the injustice. The £400m cost to their private sector schemes is equivalent to just 0.03 per cent of pension liabilities. While the costs across public sector schemes are greater, the £2.7bn in extra liabilities that would be paid out over several decades is easily affordable.

“The government must now do the right thing and change the rules on defined benefit pensions so that everyone is entitled to a full survivor pension when their spouse or civil partner dies.”

Under the current law, many widowers, surviving civil partners and same-sex spouses are currently losing out or may miss out on retirement income because of ongoing discrimination in the pensions system.

When the Civil Partnership Act was introduced in 2005 it ensured that defined benefit pension schemes had to provide the same survivor benefits to civil partners as they did to married partners.

However, this legal right to equality only applied from 2005 onwards. Earlier this year, an employment appeal tribunal ruled against a man who tried to challenge this. Mr Walker had 23 years’ service in his defined benefit pension scheme. If he had been married to a woman she would have been entitled to his full pension (worth £41,000) a year when he died, but currently his civil partner would only get a survivor pension worth around £500 a year because most of Mr Walker’s service is pre-2005.

When equal marriage legislation was introduced last year, the government decided to treat married same-sex spouses the same as civil partners, so only service after 2005 counts for them too.

Women with long career service may also be unable to accrue full survivor pension rights for their partners as gender equality in pension accruals only goes back to 1990 in the private sector, and to 1988 in the public sector. In 2011, the widower of a GP unsuccessfully challenged the inequality between widows’ and widowers’ pensions in the courts. He receives about £3,200 less per year than a widow would as his wife’s service between 1982 and 1988 does not count.

The TUC is urging people to sign a petition calling on the government to stop widowers and same-sex couples losing out by requiring equal rights to survivor pensions to be fully backdated. The petition is available at http://act.goingtowork.org.uk/page/s/end-discrimination-in-survivors-pe…;

NOTES TO EDITORS:
- The government report is available at www.gov.uk/government/publications/occupational-pension-schemes-review-…
- The government estimates that 27 per cent of private sector defined benefit schemes have a difference in the way that survivor benefits between surviving opposite sex spouses and surviving civil partners are calculated. Two-thirds of these schemes only took into account accruals after 2005 in those calculations (page 5 of the government’s report).
- A TUC guide to survivor pensions is available at www.tuc.org.uk/sites/default/files/Survivor%20pensions.pdf
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