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Gay Times Law by Clive Sanders LLB

7 : Pensions

Summary of Pensions Law

Occupational Pension

If you have an occupational pension depending on the precise terms of the scheme you may find that your partner will not receive the same benefits that they would have received had your partner instead been a spouse (ie married to you).

You should check the wording of each scheme but don’t be surpised if it is discriminatory. At present there is no specific protection against being discriminated against on the grounds of sexual orientation. However there are two new European Directives (Council Directive 2000/43/EC of 29 June 2000 and the Employment Directive: Council Directive 2000/78/EC of 27 November 2000) which state amongst other things that unfair discrimination on the grounds of sexual orientation, religion and belief must be outlawed by December 2003.

This means the Government must introduce new anti-discrimination legislation in the near future and I anticipate in future you will be able to challenge discriminatory provision of pension benefits.

Private Pensions

Most private pensions are effectively a fund that you purchase over time and you therefore have some control over that fund.

All schemes allow you nominate someone as your “Death Benefit Nominee” which means the pension fund will pay out to whoever you nominate. If you have not nominated anybody the fund will fall to your estate and where the pension then goes to depends on the provisions of your will or if you have no will then the usual intestacy rules apply.

Inheritance tax

The general rule is that if you nominate someone to receive your pension if you die and that nomination is binding on the trustees then the fund will be treated as part of your estate and taxable for IHT.

If the trustees of the pension have a discretion as to who receives your pension in the event of your death then it will not be taxable. Many large companies therefore ask their employees to sign a form indicating who they want the pension to go to but declaring it not be binding on the trustees.


If your occupational pension rules do not treat unmarried couples the same as married couples then I would recommend you challenge the rules within your company or through your Trade Union.

Your company may have an equal opportunities and/or equal treatment policy and subtle pressure may result in their changing the rules.

Also if your company operates a scheme allowing you to indicate your wish as to who the pension goes to that you are able to sign the form so your partner gets the tax benefit.

If you have private pensions make sure that you nominate your partner or make sure you have a Will so the benefits goes to who you want it to. If you failed to nominate your partner and you don’t have a will then those benefits would go to your parents. This may not be what you want. Don't overlook this issue; history has shown that parents distressed at the loss of a son may not always reflect their sons wishes in terms of treatment of a partner left behind.