Audience: This Notice will be of particular interest to:
- HR Managers and
- Pension leads
- To note the attached Questions and Answers
BackgroundThere has been press coverage that the Government has brought forward the date on which couples of the same sex may marry. The first marriages can take place on 29 March 2014. We are currently working to amend the pension scheme rules to allow the payment of benefits to survivors of marriages between same sex couples. We are also working with the Government Equalities Office, HM Treasury and MyCSP to design processes that enable us to implement the new arrangements. We will let you have more details once we have completed this work. This will include how to communicate to members the scheme provisions for survivors of marriages if same sex couples.
- In the meantime you may get questions from your employees about how the Civil Service pension arrangements will deal with marriages of same sex couples. At Annex A is a Question and Answer sheet covering frequently asked questions. The Question and Answer sheet should not be publicised on intranets.
Enquiries regarding content please refer to Scheme Management Executive SMEemployers@cabinet-office.gsi.gov.uk
IMPLEMENTATION OF THE MARRIAGE (SAME SEX COUPLES) ACT 2013
Q&A FOR USE BY CIVIL SERVICE PENSION EMPLOYERS
What are the Government’s plans for implementation of the Act?
- The first same sex weddings in England and Wales will be able to take place from Saturday 29 March 2014.
- Those couples wishing to be among the first to marry will need formally to give notice of their intention to marry on 13 March 2014.
What survivor benefits will be available to survivors of marriages between same sex couples in public service pension schemes?
- Survivor benefits for same sex married couples will generally be aligned with those of civil partners and widowers of a marriage between an opposite sex couple. In Civil Service arrangements this means that benefits will generally be based on service accrued since 1988.
Why do same sex married couples not get the same survivor benefits as opposite sex married couples?
- The pension system contains a number of differences in treatment as a result of changes in society and social attitudes over time. Removing these differences would impose significant retrospective costs on pension schemes and on the public purse.
- As a matter of principle successive governments have avoided imposing retrospective costs on pension schemes which have not been taken into consideration in their funding assumptions.
- Changes for one specific group could potentially lead to a wider range of discrimination claims against pension schemes.
- It would be irresponsible of any government to consider changing the law in this area without an understanding of the full implications and potential costs. The Government has therefore committed to carry out a review of the differences in survivor benefits between different groups, and the costs and effects of making any changes to reduce or eliminate them. The outcome of the review will be published before 1 July 2014.
What are the potential costs of providing equal survivor benefits?
- The purpose of the review is to explore what and the costs and effects would be of making any changes to reduce or eliminate differences in survivor benefits.
- In 2011 actuaries for the public service pension schemes calculated that the cost of equalising benefits for widows and widowers would be between £3bn- and £4bn. Equalising rights for those in civil partnerships and same sex married couples would add to these costs.
- This would put a significant burden on the public finances during a difficult economic period.
Why is the Government legislating now? Are they not pre-empting the review?
- No. The Government is determined to ensure that the unfairness preventing same sex couples being able to marry is removed as soon as possible.
- In response to concerns expressed during the passage of the Act that there will be a difference in treatment between same sex and opposite sex married couples, the Government committed to conduct a review of relevant differences in survivor benefits in occupational pension schemes.
- The review is looking at the costs and effects of making any changes to reduce or eliminate these differences.
- Work on the review is underway, and the Government will publish a report on the outcome before 1 July 2014.
How do I contribute to the review?
- The legislation requires that the review must include consultation with interested parties whom the Secretary of State considers appropriate
- As part of the review, next year HMT and DWP engaging with key stakeholders including pension trustees, industry bodies, trades unions and groups representing the lesbian and gay community.
Why can I not convert my civil partnership to a marriage now? Why do I have to wait?
- The Government is working hard to ensure that couples wishing to convert their civil partnerships into marriages, and married people wanting to change their legal gender while remaining married, will be able to do so as soon as possible. We aim to do this before the end of 2014.
- These aspects of implementation will take longer because they involve developing and implementing completely new procedures and processes. This contrasts with the work to make new marriages for same sex couples possible, where we have been able to build on existing processes so implementation is more straightforward.
- All this takes time and these are important matters for people so it is vital to get it right.
What will happen to survivor benefits where a scheme member changes legal gender?
- Under the Act people will be allowed to change their legal gender without having to end their marriage, where both spouses want the marriage to continue. This is an important development for transgender people, who currently have to choose between obtaining gender recognition or staying in their marriage
- The Act also makes an exception for the position of a spouse who is married to a scheme member of the same sex as a result of the scheme member changing legal gender. In such cases survivor benefit expectations will not be affected.
- So for instance, a woman whose husband is a pension scheme member and who changes legal gender and where the marriage continues, will retain an expectation of survivor benefits as if she continued to be married to a man.
But the measures in place enabling a legal gender change while preserving marriage will not be in place until later. What if I or my spouse wants to change legal gender now? What will this mean for survivor benefits?
- People wishing to change legal gender, to remain married and to benefit from the exception on survivor pensions will not be able to so immediately.
- This is because we need to make specific legislative changes to enable this and to set out the process for pension schemes.
- Enabling couples to change their legal gender without having to end their marriage also has wider impacts than public service pensions. It requires changes to areas which are the responsibility of several government departments and involves:
- significant changes to the application processes and procedures for the Gender Recognition Panel to ensure the wishes of both spouses are clear,
- changes to several IT systems,
- new guidance and training for staff,
- the development of new marriage certificates and
- comprehensive information for people affected.
- We need to take great care to ensure that the new processes ensure the right degree of confidentiality and sensitivity and do not inadvertently identify an individual who has obtained a gender recognition certificate.
- All these changes can only be made once the new arrangements for marriage of same sex couples and conversion of civil partnerships are in place.
- We therefore believe that aiming to complete this work by the end of 2014 is realistic and taking the time necessary to get this right is in the best interests of the people who will be affected.
Did not the Government say £3-4bn was the cost of survivor benefits for potential opposite sex civil partnerships? The Government has not been clear about this.
- This figure was assessed in 2011 by actuaries for the public service pension schemes to be the cost of equalising benefits for widows and widowers in the public service schemes.
- The review of survivor benefits in occupational pension schemes is also considering the costs and effects of removing existing differences in survivor benefits.
- This figure gives an indication of the scale of the costs involved once you start creating additional pension entitlements for different groups who did not previously have these entitlements, where pension scheme could not have planned for such costs.
- So clearly we would need to also look very carefully at any potential pension costs involved with the creation of opposite sex civil partnerships.