Local Government Pension Scheme in England and Wales - Access and Fairness

Background

A survivor pension is an annual pension, paid monthly to an eligible survivor of a scheme member. Over time, survivors of opposite-sex marriages, survivors of same-sex civil partnerships (SSCPs), survivors of cohabiting couples, survivors of same-sex marriages, and survivors of opposite-sex civil partnerships (OSCPs), have all been given eligibility to receive survivor pensions. 

The Equality Act 2010 replaced and consolidated a series of previous pieces of anti-discrimination legislation. This meant that, for the first time, discrimination on the grounds of sexual orientation was prohibited. However, the Act also included an exception, in that it was not deemed discriminatory to disregard pensionable service prior to 5 December 2005 when calculating pension entitlement for survivors of same-sex partnerships i.e., the differing treatment of people in same-sex relationships compared to people in opposite-sex relationships was permitted. 

In Walker v Innospec, 2017, a male member brought a case against his private defined benefit scheme, claiming that his male spouse should be entitled to the same survivor benefits which would be paid to a member who predeceased a wife in an opposite-sex marriage. The court found that the spouse’s survivor pension should be calculated on the whole period of the member’s service (provided they were married at the time of death), as opposed to the period since 5 December 2005. Accordingly, in 2018 the LGPS (Transitional Provisions, Savings and Amendment) Regulations 2014 (‘the 2014 Regulations’) were amended to equalise the final salary survivor benefit entitlements of surviving same-sex spouses and civil partners with those received by widows of opposite-sex marriages. 

The 2014 Regulations rules on survivor benefits were further amended when OSCPs were introduced in 2019. These amendments specified that for male and female opposite-sex civil partners, the survivor pension should be calculated in the same way as it was for widowers and widows respectively. After this point, the calculation of survivor pension entitlement has been dependent on a number of factors, including whether the 1995, 1998 or 2008 Scheme rules applied, the date the marriage or civil partnership took place, and the specific circumstances in which additional periods of service could be taken into account. The cumulative effect has been that: 

1. Survivors of same-sex marriages, survivors of SSCPs, and female survivors of opposite-sex marriages have had their survivor pension calculated based on the relevant member’s service since 1978. 

2. Male survivors of opposite-sex marriages have had their survivor pension calculated based on the relevant member’s service since 1988.

In Goodwin v Secretary of State for Education, 2020 a female member of the TPS successfully argued that the TPS unlawfully discriminated against women in opposite-sex marriages or civil partnerships, when compared to women in SSCPs . This case highlighted that pensionable service was only considered from 1988 when calculating the survivor pension of an opposite-sex survivor of a woman, whilst service would be considered from 1978 when calculating the survivor pension of a same-sex survivor of a woman. The TPS rules were changed accordingly to provide male survivors of an opposite-sex marriage or civil partnership with a member with the same entitlement as all other survivors of a marriage or civil partnership with a member. 

The LGPS in England and Wales has similar rules to survivor eligibility as the TPS, but has not changed its approach to calculating survivor benefits since the Goodwin case. The LGPS in Scotland (‘the LGPS Scotland’) and the LGPS in Northern Ireland (‘the LGPS NI’) have changed their approaches following the case, backdating those changes to the point at which the relevant regulations came into force. In both the LGPS Scotland and the LGPS NI the changes were backdated to 1 April 2015. This is the date on which the LGPS (Transitional Provisions and Savings) (Scotland) Regulations 2014 and the LGPS (Amendment and Transitional Provisions) (Northern Ireland) Regulations 2014 came into force (and the date on which the career average revalued earnings (CARE) schemes were introduced in Scotland and Northern Ireland). The amendments were made so that the changes applied in relation to the death of any member after 5 December 2005, the date that SSCPs were first introduced. The changes being proposed here are intended to have the same effect, that they will in effect be backdated to cover any death of a member after the date that the relevant relationship type was first introduced. 

Proposal

The government proposes to amend the survivor benefit rules of the LGPS, to ensure that all survivors are treated equally with regards to entitlement to survivor pensions, regardless of the sex of either the eligible member or their survivor. This uplift would include addressing the point highlighted in Goodwin, of the male spouse or civil partner of a female member being treated less favourably than the female spouse or civil partner of a female member. 

The government has identified that in the majority of cases, the most generous benefit entitlement is that due to survivors of SSCPs. In a small number of cases there is no comparable benefit entitlement due to survivors of SSCPs (because the point of comparison comes from before the introduction of SSCPs), in which case the most generous benefit entitlement due is to female survivors of opposite-sex marriages. 

As a remedy, the government proposes to amend the 2014 Regulations to ensure that all survivor benefits are calculated by uplifting the entitlement of all groups to either the entitlement due to survivors of SSCPs, or when that is not applicable, to the benefit entitlement due to female survivors of opposite-sex marriages. This would go further than uplifting the entitlement of male survivors of an opposite-sex marriage or civil partnership. 

The government proposes that the survivor benefits due to eligible members should also be backdated, to the point at which the underlying relationship types were recognised in UK law:  

1. For widows of opposite-sex marriages and widowers of opposite-sex marriages, backdating for deaths that occurred from 5th December 2005. 

2. For widows of same-sex marriages and widowers of same-sex marriages, backdating for deaths that occurred from 13th March 2014. 

3. For survivors of opposite-sex civil partnerships, backdating for deaths that occurred from 31st December 2019