Defined benefit schemes: cessation of survivor's benefits on remarriage – is it unlawful?

As the title to this blog alludes, it was not uncommon in the past for survivors' benefits under UK defined benefit pension plans to cease on the remarriage of a surviving spouse or civil partner. Although in recent years there has been a shift towards survivors' benefits being payable "for life", it appears that there is some reluctance to retrospectively change provisions of older schemes to allow payment of survivors' benefits where a surviving spouse or civil partner has remarried. 

An emerging contention in the context of public service pensions at least appears to be that the practice is discriminatory, contrary to European human rights obligations and potentially unlawful. Further light may be shed on this issue by the outcome of a claim recently lodged by several police widows and widowers relating to the operation of such provisions under the Police Pension Scheme 1987 in England and Wales. The claimants allege that provisions in the scheme which require that their pension ceases on remarriage are unlawful under the Human Rights Act 1998, as they breach their human rights and are discriminatory.

If successful, the case could have major implications for public service pension schemes by creating pressure for change. In the case of the Police Pension Scheme 1987, it has been estimated by the Home Office and Government Actuary's Department that the cost of retaining benefits for all police survivors would increase the police scheme liabilities by around £144million (further increasing to around £198 million if reinstatement of pensions already surrendered was required). Of course, further investigation would be needed to ascertain the possible financial impact for other public service pension schemes.

The outcome of this challenge may not provide a straightforward answer for those in receipt of survivors' benefits from private sector schemes who stand to lose them if they get married again (bearing in mind that such individuals may be cohabiting and wish to remarry but simply feel they can't for financial reasons). As the challenge has been brought under the Human Rights Act 1998, a successful outcome would not be directly applicable to private sector schemes. It is, however, possible that any pressure for change generated in respect of public service schemes will be reflected in the private sector, with members of such schemes calling for trustees to ensure their scheme does not discriminate against those who choose to remarry after the death of a spouse or civil partner. However, regardless of the outcome of the challenge, given that this is such an emotive issue, it may be prudent for trustees of private sector defined benefit schemes to consider it further and add it to their risk register.

If you would like to discuss anything raised in this blog, please get in touch with your usual contact at Brodies.