Pensions in focus briefing: same sex and transgender pensions issues
Published on 23rd Nov 2016
In recent years the law in relation to civil partnership, same sex marriage and gender change has developed significantly. Many European countries, including the UK, have introduced new legislation in these areas. In the pensions sphere these changes have created a variety of issues, and in this update we look at three recent decisions that demonstrate some of the difficulties arising. These decisions could impact on the Supreme Court decision in Walker v Innospec, a claim about same sex marriage pension survivor benefits in the UK, which is due to be heard in Spring 2017.
Workplace pension and civil partnership – Dr David L Parris v Trinity College Dublin & Ors
Dr David Parris was a member of the Trinity College Pension Scheme. The scheme provided a survivor’s pension to a member’s spouse or civil partner where the member married or entered a civil partnership before their 60th birthday. Dr Parris had lived with his same sex partner for more than 30 years and had entered into a civil partnership in the UK in 2009. However, he reached age 60 before legislation allowing same sex civil partnership had come into force in Ireland.
In 2010 Dr Parris made a formal application to Trinity College to have his partner’s right to a survivor’s pension recognised. His application was rejected on the grounds that he did not enter his civil partnership before his 60th birthday. The matter was appealed up to the Labour Court in Ireland, which referred various questions to the Court of Justice of the European Union (the CJEU).
In particular, the Court asked the CJEU to consider whether the age 60 restriction in the pension scheme was discrimination on grounds of sexual orientation or age. It asked this in the context of the fact that national legislation in Ireland had not allowed Dr Parris to enter a civil partnership before he reached the age of 60.
The Advocate General (AG) to the CJEU has now given her opinion in this case. She concluded that the age 60 restriction was indirect discrimination on the grounds of sexual orientation which could not be justified, and direct discrimination on the grounds of age, which again could not be justified. Significantly, the AG stated that the fact that Dr Parris’ pension entitlements were based almost entirely on periods of service prior to the entry into force of the EU Equal Treatment Directive did not mean that age and sexual orientation discrimination legislation would not apply.
The AG’s opinion is not legally binding, but the decision of the CJEU should follow within a few months, and it may affect the decision of the UK Supreme Court in Walker v Innospec.
State pension and same sex marriage – Aldeguer Tomas v Spain
Mr Tomas was born in 1955. He lived with his same sex partner from 1990 until his partner’s death in 2002. In 2003, Mr Tomas claimed a state dependant’s pension as a surviving spouse. His application was refused because he and his partner had not been married.
Mr Tomas brought a claim through the Spanish courts and on to the European Court of Human Rights (ECHR). Same sex marriage was only allowed in Spain from 2005. A historical issue in Spanish legislation added further complexity. Divorce was not possible in Spain until 1981. When the law changed, it extended the right to a survivor’s pension, with retroactive effect, to ‘stable cohabiting couples‘ in certain circumstances. In particular this applied where the couple had been unable to marry because one or both of them was still married to (and was unable to divorce) someone else, and one of the couple had then died before the legislation allowing divorce came into force.
Mr Tomas claimed that he should receive a survivor’s pension because he was in a similar position to those ‘stable cohabiting couples‘. The ECHR agreed that there were certain similarities. In both situations there was a legal obstacle to the couple marrying and getting access to a survivor’s pension. However, ultimately, the Court found there were fundamental differences between the two situations. In particular, it noted that Mr Tomas was unable to marry his partner at all at the relevant time, whereas the couples affected by the 1981 legislation were couples where one or both parties were unable to remarry.
The Court rejected Mr Tomas’ claim that he had been discriminated against on the grounds of his sexual orientation. In doing so it said that States enjoy a ‘margin of appreciation’ in the timing of legislative changes, and that it would be ‘completely inappropriate’ for the ECHR to require Spain to provide for a retroactive application of its 2005 legislation recognising same-sex marriage.
The approach to retroactive application is significantly different in this decision to the approach of the AG in her opinion on Dr Parris’ case above.
State pension and gender change – MB v Secretary of State for Work and Pensions
This case concerns a person who changed gender from male to female, and their claim to draw the UK state pension from the female state pension age of 60.
When the Gender Recognition Act 2004 (GRA) came into force in 2005 a person who changed gender could not obtain a full gender recognition certificate while they remained married, because same sex marriage was not then possible in the UK. A married applicant for a gender recognition certificate could obtain an interim certificate, which entitled them to have their marriage annulled. After the annulment, the applicant could apply for a full gender recognition certificate. Without a full gender recognition certificate, the acquired gender would not be recognised for state pension age (SPA) purposes.
MB was born in May 1948, registered as a man at birth, and married in September 1974. In 1991 she began to live as a woman and in 1995 underwent gender reassignment surgery. MB did not apply for a gender recognition certificate when the GRA came into force, because she and her wife wished to remain married, and not to go through the process of having their marriage annulled, for religious reasons. MB reached age 60 in 2008, and shortly afterwards applied for a state retirement pension backdated to her 60th birthday. 60 was the state pension age (SPA) for a woman with MB’s date of birth. However, the SPA for a man with MB’s date of birth was 65. MB’s application to draw the state pension from age 60 was rejected because she did not have a full gender recognition certificate showing her acquired gender as a woman.
This case has been appealed to the Supreme Court. The Supreme Court is divided on the issue and has asked the CJEU whether the EU Directive on Equal Treatment prevents national law from imposing a requirement that, in addition to satisfying the physical, social and psychological criteria for recognising a change in gender, a person who has changed gender must also be unmarried in order to qualify for a state retirement pension.
UK defined benefit pension schemes that restrict the provision of survivor’s benefits for survivors of civil partnerships or same sex marriages to the benefits accrued by the member on or after 5 December 2005 can continue to do so for now. Nevertheless the law in this area remains in flux and the Supreme Court decision in Walker v Innospec could change the position.
Each of these cases demonstrates the difficulties that arise in relation to pension benefits, which by their nature build up over time, when new discrimination law comes into force. If changes do not apply retroactively, then the protection afforded by the new law will often not apply to benefits that members accrued prior to the legal change, but draw after it. However, if changes do apply retroactively, states and companies may have to fund liabilities which they did not anticipate when they first started to offer a benefit, and which did not apply while the benefit was being accrued.
This is also an area where European legislation and caselaw significantly affects UK law. For the moment European law and caselaw decisions remain relevant and binding while the UK remains in the EU, but the UK’s departure at some point in the future has the potential to change the position.