Contact: Chief Pensions Officer [email protected]; 01962-847506

1 Introduction

1.1 Same-sex couples may register under the Civil Partnership Act from December 2005. The Act requires occupational pension schemes to pay pensions to surviving civil partners of scheme members, based on the scheme member's service from 6 April 1988, just as they must for surviving spouses.

1.2 The Office of the Deputy Prime Minister (ODPM) has asked interested parties about implementing this in the Local Government Pension Scheme (LGPS).

1.3 This report sets out ODPM's key proposals and the County Council's proposed response about further back-dating, for the Panel's consideration.

2. LGPS benefits

2.1 If a member of the LGPS dies and is survived by a registered civil partner then a "half-rate" pension would be payable for life to the surviving civil partner. A contributor, pensioner or deferred pensioner is a scheme member. In the event of a dissolution of a partnership, the scheme member's rights could be shared with the ex-partner if a court so directs, just as they can in divorce cases.

3. Compensation

3.1 If a scheme member was awarded compensatory added years upon redundancy or early retirement after 5 April 1988, then a surviving civil partner would get the same added years award giving a "half rate" pension paid by the employer.

4. Costs

4.1 The Government Actuary estimates the cost to LGPS employers in England and Wales at between £2.1m and £4.2m per year for future service, depending on take-up of civil partnerships. Past service costs would be £12m to £24m, which would be spread over many years, like other pension fund liabilities As a very rough guide, Hampshire's share could be about 2.5% of the total costs. Of this about half relates to the County Council and half to other employers.

5. Further back-dating

5.1 ODPM specifically asks whether a facility would be welcomed, going beyond the requirements of the Civil Partnership Act, to allow active members to count any period of membership which they had between 1 April 1972 and 5 April 1988 for the purposes of calculating a civil partner's benefit, providing the full cost for that period is met by the scheme member.

5.2 That facility was given to married women in 1992 for widowers' pensions. Only six took it up, probably because, for couples in average health, the husband had to be at least five years younger than his wife to outlive her, as was pointed out to all women at the time. That made the facility less attractive.

5.3 In 1997, LGPS employers were given the discretionary power to count such service in full for widowers' pensions, at no cost to the scheme members. This was adopted in Hampshire, with the approval of the Personnel Sub Committee and other employers concurred. The costs were included in the 1998 valuation.

5.4 Whilst it is acceptable to allow further back-dating at the member's cost it may lead to demands for such service to be granted at no cost to the members.

Recommendations

1 That the Panel notes that ODPM's proposals for amending the LGPS to pay pensions to civil partners will add to employers' costs and therefore takes the view that any further back-dating must be solely at the scheme members' cost.

Section 100 D - Local Government Act 1972 - background documents

The following documents discuss facts or matters on which this report, or an important part of it, is based and have been relied upon to a material extent in the preparation of this report.

NB the list excludes:

1. Published works.

2. Documents which disclose exempt or confidential information as defined in the Act.

None.