ITEM PF25
PENSION FUND COMMITTEE - 28 MAY 2008
NOMINATED COHABITING PARTNERS
Report by Assistant Chief Executive & Chief Financial Officer
Introduction
1. Changes to the Local Government Pension Scheme from 1 April 2008 introduce the ‘partner’s pensions’ into the scheme for the first time. This report informs the Committee about the new category of beneficiary and asks the Committee for guidance concerning the acceptable information to confirm the partner’s co-dependent financial status.
Entitlement
2. The establishment of nominated cohabiting partners mean that opposite sex or same sex couples can now provide a pension for their partner after their death.
3. A future benefit will only be paid to a partner of a member who was active in the scheme after 31 March 2008, signed the declaration and subsequently dies.
4. The future benefit can be based on the membership from 6 April 1988. This matches the level of benefit previously afforded to civil partners.
5. Civil partners and married couples have a legal certificate to confirm their partnership status; the regulations ask that for nominated cohabiting partners a declaration is signed by both parties and made to the administering authority.
Definition of Cohabiting Partner
6. The declaration form has to be signed by both partners and asks them both to declare that for a period of at least two years including the day the declaration is signed that:- · they are able and free either to marry or enter into a civil partnership with each other, and · they have been living together as if they were a husband and wife or as if they were civil partners, and · either the partner is financially dependent on the member of the scheme or that they are both financially interdependent.
7. As the new regulation becomes more widely known we expect to start to issue the declaration form. This will be followed by a further request for a confirmation of status at the time a benefit becomes payable. However guidance is requested from the Committee on what to accept as forms of evidence about compliance with the criteria, and in particular the financial dependency or inter-dependency, or whether the signed statement by both partners will be satisfactory.
Evidence Required
8. Whilst it is likely that some couples will have joint bank accounts or mortgages it will not always be the case. Names on the electoral roll at the same address will not be a guarantee that they are a couple living as husband and wife or civil partners.
9. Although it is appreciated that unlawful payments of benefits will be a cost to the pension fund the administrators are not equipped to police and investigate every relationship. The risk of the overpayment needs to be balanced against the potential hardship that bereaved partners could face if unable to produce the correct paperwork to prove their status.
10. For a cohabiting partner to be recognised for a benefit the nomination has to be in place at the date of death and all conditions applicable for at least two years. The nomination will be invalid should either partner marry someone else or enter into a civil partnership or the partner dies or another nomination is made.
11. A draft of the proposed declaration is attached at Annex 1 (download as .doc file). In addition to the declaration, the Committee may consider that it requires reaffirmation at the point a benefit may be payable.
RECOMMENDATION
12. The Committee is RECOMMENDED to:
(a) endorse the draft declaration form (Annex 1)
(b) agree not to seek additional documentary evidence under usual circumstances.
SUE SCANE Assistant Chief Executive and Chief Finance Officer
Background papers: Draft format for the initial declaration form
Contact Officer: Jenny Wylie Tel: 01865 797116
May 2008
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