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Sweeping changes?

What lies ahead for pension rights for same-sex partners? Last week, I moved my “sex and pension schemes” discussion on to the rights of homosexuals to receive a surviving “spouse&#39s” pension on the death of their partner.

The lead case in this respect is Lisa Grant v South West Trains. Lisa is an employee of SWT, which refused to grant concessionary rail travel to Lisa&#39s lesbian partner – leading to a successful claim for sex discrimination.

Under appeal to the European Court of Justice, the tribunal&#39s original decision was overturned and Lisa lost. In fact, she was bound to lose. The ECJ ruled that article 119 of the Treaty of Rome, though certainly making sex discrimination illegal, only prohibited sex discrimination between men and women, not between heterosexuals and homo-sexuals – which was the basis of Lisa&#39s claim.

South West Trains, while admitting it would not consider granting concessionary rail travel to lesbian partners of its employees, pointed out that it also refuses to grant such a benefit to male homosexual partners of employees. Thus they were not discriminating between men and women, they were discriminating between heterosexuals and homosexuals. This practice is perfectly legal under both UK and European law, regardless of whether individuals might find it unethical.

The term sexuality discrimination has been coined to describe this discrimination, which does not contravene either Article 119 of the Treaty of Rome, nor any other articles or legislation within the European Community -or for that matter any legislation in the UK. Thus, Lisa Grant&#39s claim for sex discrimination could not, and ultimately did not, succeed. That remains the situation.

The decision, as I briefly hinted last week, was a great relief to pension schemes. They feared that if Lisa had won her case relating to concessionary rail travel, the same principles would have been used to legally force pension schemes to pay surviving spouse&#39s pensions to homosexual partners of deceased scheme members.

Currently, although it is perfectly legal for pension schemes to pay pensions to such claimants (subject, at least in theory, to the claimant being able to demonstrate financial dependence on the deceased), it is not mandatory that they should do so.

Not least, pension schemes were (and still are) concerned about the effects of being forced to offer this benefit to an extended range of potential beneficiaries.

The question would regularly arise as to whether a claimant was indeed a partner of the deceased scheme member to the extent required to qualify them for benefits under the pension scheme. For example, just how long should the two people have been living together to appropriately call the survivor a “partner”?

There is no legal definition of a common-law spouse and therefore no defined period of time of cohabitation for which such a phrase could be justified. The same issue arises with same-sex partners. The potential problems for pension schemes were, and still are, huge.

Accordingly, the case was referred to the ECJ which considered the claim for sex discrimination under Article 119 of the Treaty of Rome.

This court overturned the decision by the English tribunal and found in favour of South West Trains.

Pension schemes breathed a huge sigh of relief.

It was therefore confirmed at the time that it was perfectly acceptable in law to discriminate between homo- sexuals and heterosexuals in the provision of any benefits by an employer – in partic-ular, for the purposes of this series of articles, pension scheme benefits.

However, late in 1999, an attempt was made to outlaw sexuality discrimination in respect of employee benefits, as a proposed amendment to the then Welfare Reform Bill (now an Act, of course). The amendment was voted down, however, much to the disappointment and annoyance of homosexual pressure groups.

Earlier this year, though, the Government made an announcement which has – unfortunately for many employers – so far gone almost completely unnoticed. They have issued an edict which “requires” employers to grant to a homosexual partner of an employee the same benefits that employer grants to a legally married partner ofan employee.

As an example relevant to financial advisers, where an employer grants private medical cover to an employee and spouse (as is quite commonly the case), then a homosexual partner of an employee must also be granted the same benefit. Where an employee is provided with a company car, with spouse also insured to drive, then insurance cover must also be granted to homosexual partners.

Before moving back on to pensions, it is worth pausing to look at the enormity of this “requirement”.

If an employer does not conform, then a homosexual partner of an employee who requires hospital treatment could seek a judgement ruling that the employer – if private medical cover has been denied homosexual partners where it is granted to spouses – must pay for the private medical treatment. All employers granting such benefits should now review their insurance policies.

The problem employers and insurers face, even when they become aware of this requirement, is the definition of a same-sex partner – a problem this Government edict did not address.

As I have questioned acouple of times in this series, just how long must the couple have been living together to be deemed partners? Maybe an employer should accepta named nomination by such employees – a nomination which, of course, could change from time to time.

But why have I used the word requirement? Well, the Government shied away from introducing legislation and instead resorted to issuing this as a “guidance” or “requirement”. A bit wishy-washy you might think, until you realise that the Government has announced that any employers not complying will find, if taken to an industrial tribunal on this issue, that there will be Government pressure on that tribunal to find against the employer.

If that pressure fails to succeed, the Government edict goes on to say, legislation will follow. In other words, the guidance or requirement, although not technically having the force of law, should be adhered to by employers.

It is worth noting that pension benefits have been specifically excluded from this guidance. The denial of survivors&#39 pension benefits to same-sex partners remains perfectly legal.

Cynics may speculate that the exclusion could have something to do with the Government which, as the country&#39s biggest employer, almost invariably denies pension benefits to such partners. The cost of reversing this practice would be enormous.

It is also worthy of note that – perversely, in the eyes of the author – although the Government edict relates to benefits for same-sex partners, it does not require the employer to grant benefits to unmarried partners of the opposite sex. This is surely discrimination against heterosexuals (and one wonders which members of the cabinet voted to agree with such an apparent anomaly).

Pensions advisers should be aware, though, that the pressure from homosexual pressure groups continues and you should watch this space for any important dev-elopments.

Finally, I have mentioned that all this could become an election issue. It already has. Homosexuals may not get married in this country but many apparently want to. The main political parties (including, of course, Labour) have now announced plans to introduce some form of legal marriage for such couples, should that party be elected.

Jack Straw has announced that he will not introduce the ability of homosexuals to become legally married. Nice wording. But could we see the introduction of the Scottish concept of “married by habit and repute” copied around the rest of the UK, this time to include same-sex partners?

Next week I continue the theme of sex and pensions when I look at other issues which could profitably affect hundreds of thousands ofpeople but only if they receive advice and guidance.


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