But what happens to your pension if you died before retirement?
In the majority of schemes, there are provisions for lump sum or regular payments to be made to your beneficiaries, but a landmark decision yesterday by the Supreme Court has allowed some cohabitants an automatic right to benefit from their partner’s scheme as if they were married, should the worst happen.
Denise Brewer had lived with her partner for 10 years when they decided to get engaged. Tragically just 2 days later, on Boxing day 2009, her partner William McMullan (known as Lenny) suddenly passed away.
In attending to his finances following his death Miss Brewer was informed that, despite their long relationship, as she was not married to Mr McMullan and the company had not received a form nominating her as his beneficiary, she would not be able to make a claim under his pension.
When she looked into it she found out that on the other hand, regardless of how long they had been married, married couples (or those in a civil partnership) had no similar “opt in” requirement and could automatically claim .
Miss Brewer believed this difference in treatment was discrimatory and against European human rights legislation so took the local government pension provider to court.
Initially the High Court agreed with Miss Brewer, but this was overturned by the Court of Appeal on the basis that they believed it was justifiable to ascertain the longevity of the relationship and, in the absence of a marriage or civil partnership, have the scheme member’s express wishes of who he wanted as his beneficiary.
The case progressed to the Supreme Court in November last year and judgement was given yesterday.
In this potentially landmark decision, the Supreme Court decided that legislation already existed which ensured a cohabiting couple’s relationship was genuine, so there was nothing further to gain from having the additional requirement for the deceased to have expressly nominated or “opted in” their partner and this in essence amounted to discrimination which could not be justified.
Therefore they unanimously decided that even in the absence of a nomination form, Miss Brewer could receive her late partner’s pension under the scheme as she had shown to the court that they were living together as if they were married.
What impact will this decision have?
On the face of it this will be very welcome news to the thousands of couples working for public bodies as this should now be applied to all local government pensions.
Unfortunately, though, as this decision is specific to a local government pension it is unlikely that this will be applied across the board to similar private pension schemes. That said, it certainly sends signals to private pension providers that they would likely be open to a similar challenge in the future if they continue to treat cohabiting couples differently to those who are married.
It is important that you take specialist advice if you believe you have suffered discrimination or you are unsure of your rights in a cohabiting relationship. Our experienced and friendly solicitors are always willing to help.