I have been (and continue to be) critical of the unaffordable cost of public sector schemes and their need to wake up to reality and reform. The recent Supreme Court ruling on the payment of survivor benefits to unmarried partners will inevitably have cost implications but in this case, is a price worth paying. Nobody can seriously believe the ruling is anything other than a victory for fairness and common sense. Indeed, it begs the question how a dispute over the completion of a nomination form could end up in the Supreme Court.
However, I will not be surprised if happens again in connection with the payment of death benefits from a public sector scheme. Let’s not forget that a lump sum is payable on death, usually a multiple of salary if a contributing member, in addition to a survivor pension. The size of public sectors schemes means the administration must be process driven to the point of being mechanical. If the computer says no, it’s a no.
The reliance on a nomination form means the lack of discretion, and I use the word advisedly, leaves the process open to a potential legal challenge. It is no longer fit for purpose in the modern world for people who may be divorced or are married but separated. There may also be children from previous marriages/relationships of both partners to consider. It is unrealistic to expect everyone to have completed a nomination form much less keeping it up to date following a change in circumstances.
The model required is the one in private sector schemes (the well governed ones at least) that have a discretions committee. Here, the nomination form is only one part of information collected to establish the individual circumstances of the deceased. This is to ensure that as far as can be established, any payments are made to the right person and where there is more than one, in appropriate proportions. No process is perfect but the ruling has highlighted a clear need of reform that is long overdue if the schemes are going to be relevant for the 21st century