Difference in Pension Death Benefits for Same Sex and Opposite Sex Couples

Following the Marriage (Same Sex Couples) Act 2013 the Government are were obliged to review survivor benefits in occupational pension schemes. The review looked at differences in occupational pension schemes, namely:
same sex widows and opposite sex widows
same sex widowers and opposite sex widowers
opposite sex widows and opposite sex widowers
It doesn’t make any distinction between civil partners or married couples because there shouldn’t be any difference in benefits available.
HMT liaised with relevant parties both inside and outside of Government to obtain details of any differences applicable. GAD was also commissioned by HMT and DWP to estimate the costs of removing these differences.
Key findings of the review include:
The capitalised cost of removing differences in survivor benefits between opposite sex surviving spouses, same sex surviving spouses and surviving civil partners in the public service pension schemes is estimated at around £2.9 billion.
Of this around £1 billion would be payable immediately in respect of benefits due before 1 April 2015. It is estimated there would then be ongoing costs across public service schemes of around £0.1 billion per annum into the 2020s, reducing thereafter.
The estimated cost to the private sector schemes of removing these differences is around £0.4 billion.
Removing differences in the survivor benefits provided to surviving same sex spouses and civil partners on the one hand and those provided to opposite sex widows on the other is estimated to have a capitalised cost of around £0.08 billion to the public service schemes
The estimated cost to private sector schemes of removing these differences is around £0.1 billion.
If private sector schemes were to provide benefits to same sex couples on the same basis as opposite sex widowers, as most public service schemes do, this is estimated to cost £0.1 billion.
Public service schemes exceed the statutory minimum requirement which permits occupational pensions schemes to provide survivor benefits for same sex couples only taking account of service since 2005. However, the majority of public service schemes only take into account service from 1988 when calculating same sex survivor benefits, and so rely on paragraph 18 of Schedule 9 of the Equality Act.
Of the 27 per cent of private pension schemes that were found to have a difference in the way survivor benefits between surviving opposite sex spouses and surviving civil partners were calculated, around two-thirds only took into account accruals after 2005 in those calculations.