Supreme Court upholds co-habitant’s rights to a survivor’s pension
The requirement in the Northern Ireland Local Government Pension Scheme that the survivor of a co-habiting couple must be nominated by the pension holder to receive pension benefits after the pension holder’s death was recently successfully challenged in the Supreme Court. We look at the case and consider its implications.
The background
Denise Brewster and Lenny McMullan had lived together for ten years. On Christmas Eve 2009 they became engaged to marry and two days later Mr McMullan tragically and suddenly died. At the time of his death Mr McMullan was employed by Translink, the company that provides the Northern Ireland public transport system.
Under the terms of the Northern Ireland Local Government Pension Scheme (NILGPS), of which Mr McMullan was a member, surviving co-habitants were eligible for benefits such as a survivor’s pension. However, under the rules of the scheme the scheme member was required to nominate their cohabiting partner in order that they could receive benefits. There was no evidence that Mr McMullan had complied with this procedure and following his death the NILGPS denied Ms Brewster any benefits.
Ms Brewster successfully applied for judicial review of this decision on the ground that the nomination requirement was unlawful discrimination contrary to the European Convention on Human Rights (“ECHR”) but, following the NILGPS’s successful appeal, the case came before the Supreme Court.
The court’s decision
The court reviewed the background in this area of the law noting that the Civil Service Pension Scheme was the first to grant pension scheme benefits to cohabitants in 2002. A Law Commission report on cohabitation had subsequently recommended reform to the applicable law and had determined that a system where cohabitants had to opt out of certain legal rights was preferable to one that required an opt in as this was considered to be fairer to the economically weaker partner.
The NILGPS rules provided that as well as submitting a nomination, a number of other requirements had to be satisfied. The couple were required to be in a relationship that required a degree of financial dependence or interdependence and to have been living together as husband and wife (or as partners in a civil partnership) for at least two years. These requirements had to be satisfied both at the time of the nomination and at the time the benefits became payable. This compares with the position in the local government schemes in Scotland and England and Wales where no nomination is now required, although other requirements do need to be satisfied.
Ms Brewster argued that given the need to satisfy other requirements (including the necessity of living together as husband and wife for at least two years) the freestanding nomination added nothing to the process and had no intrinsic value. For its part NILGPS could not provide any explanation for including the nomination condition in the pension scheme rules.
The court found that there was no need for further proof of the relationship’s nature other than that imposed by the requirements to prove the financial dependence/interdependence and length of the relationship, and it was agreed that the nomination added nothing of value.
In the court’s view, Ms Brewster’s right to property under the terms of the ECHR extended to a survivor’s pension and there was no objective justification for denying this right. In addition, the court held that discrimination between Ms Brewster’s position as a cohabitant and the position of a member of a married couple (or couple in a civil partnership) could not be objectively justified. Thus the court upheld her right to a survivor’s pension, notwithstanding the absence of a nomination.
Implications of this decision
No doubt those pension schemes in the public sector that currently require a nomination for cohabitants to benefit will be reviewing what changes need to be made to the scheme rules (as indeed did the English and Scottish local government pension schemes after Ms Brewster’s initial successful application for judicial review). A recent Commons Briefing Paper estimated the number of members in such schemes as 12 million, including the NHS and Teachers scheme.
Private pension schemes (because they are private schemes) cannot be subject to judicial review and benefits are normally payable at the discretion of the scheme’s trustees, albeit that the member may have the ability to nominate a person who would receive the benefits after their death. . The vast majority of private schemes include an unmarried partner as a person to whom the scheme trustees can provide benefits.
Ms Brewster’s dispute should therefore not arise in this way in private schemes, although challenges to the manner and outcome of the exercise of the trustees’ discretion within the ambit of the pension scheme rules are possible.
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