Legislation allowing opposite-sex couples to register as civil partners is unlikely to have a significant impact on pension scheme liabilities, industry experts say.
Yesterday (2 October), prime minister Theresa May said that heterosexual couples in England and Wales that want legal recognition for their relationship without getting married would be able to enter into a civil partnership.
The government will now consult on how the legal, tax and pension implications of the legislation will be managed.
Commenting on the potential impact, Spence & Partners director Hugh Nolan said the legislation is not likely to change "calculated liabilities" of schemes.
He said: "It will naturally increase the cost for schemes because every time you pay out to one person, you have increased cost. But I think what you will find that most schemes have already made a very prudent assessment of how many people are married.
"Pension schemes are providing enough dependents' benefits, that they will be able to include civil partners without having to incur an extra cost. A lot of schemes will be paying out on a discretionary basis anyway so the reality is there will have a fairly limited impact."
Meanwhile, Aon partner and Society of Pension Professionals president Paul McGlone agreed. He said: "The legislation is unlikely to result in many schemes changing their assumptions about the proportion of members who will receive a spouse's pension. Overall it will clearly result in more benefits being paid out than otherwise, but the uncertainties mean it's hard to tell how much."
However, he further noted that if the changes mean that an additional 1% of members can access a dependent's pension then "across DB pensions industry as a whole that could add a few billion pounds to liabilities".
Pensions and Lifetime Savings Association head of DB, LGPS and standards Joe Dabrowski said it was important the law was introduced carefully.
He said: "It is now important that the rules relating to opposite sex civil partnerships are introduced in a way that provides clarity for pension scheme members and schemes, in particular if there is any chance it will apply retrospectively.
"In most cases private pension schemes already treat same sex spouses and civil partners in the same way they treat opposite sex spouses, in some instances as a result of trustees choosing to be more generous than the law has previously required. Therefore the impact on the majority of schemes is likely to minimal.''
Earlier this year, a Lane Clark & Peacock and Royal London analysis demonstrated that introducing opposite-sex civil partnerships could add billions to the liabilities of defined benefit schemes.
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