David Brooks, Technical Director at Broadstone commented: “A great cheer should go up in the world of pensions today as the Supreme Court has ruled that same-sex married couples can receive the same pension entitlement in pension schemes as opposite sex married couples.
“This long awaited ruling means that any schemes paying the statutory minimum will now have to pay out the same benefits for all spouses and we no longer have to differentiate between the sexuality of beneficiaries. This may result in a marginal increase in funding levels of schemes (both private and public sectors alike) but it is a small price to pay for equality.
“The Government discussed this a number of times and it will be interesting to see if their reaction results in the predicted domino effect on to other pension inequalities, for instance around survivor benefits where GMP is involved.”
Stuart Price, Partner and Actuary at pensions specialist Quantum Advisory, says: “The ruling means that pension schemes in the UK can now no longer exclude same-sex partners and civil partnerships from a spouse's pension accrued before December 2005. They will now be required to calculate a spouse's pension for same-sex marriages and civil partnerships in exactly the same way as for heterosexual marriages. This not only impacts pensions coming into payment after the ruling, but schemes could also face claims from those same-sex survivors of members who have already died.
“The number of these cases that will need to be retrospectively addressed is likely to be small in the grand context of UK pensions, however, estimates are that the cost of doing so is likely to be in the region of £100m for private occupational schemes and £20m for Public Sector schemes.
“Whilst this change is long overdue, the end result will be, that if impacted, UK pension schemes will yet again have additional liability they were not expecting and this will ultimately have to be paid for by the scheme’s sponsoring employer.”
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