On 1 April 2008, the European Court ruled that in some circumstances same-sex partners have a right to the other's pension in the case of death. However, the ruling in the Maruko case applies only in member states where same sex partnerships are legally recognised and are in a comparable relationship to marriage.

Mr Maruko is German. He entered into a life partnership with a male designer of theatrical costumes in 2001. Mr Maruko's life partner was a member of an industry-wide pension arrangement set up for those employed in the theatre in Germany. Mr Maruko's life partner died on 12 January 2005. Mr Maruko sought payment of a widower's pension from the scheme, but was refused. He took proceedings in the German courts, which referred the matter to the European Court.

The main point at issue was whether or not EU Directive 2000/78/EC requires pension schemes to provide survivor's benefits to same-sex partners who have registered their union as a civil partnership. Under German law, those in life partnerships are entitled to the same social security pension entitlements as married persons.

The European Court's judgment focused on the interpretation of some aspects of the 2000 Directive, which establishes a general framework for equal treatment in employment and non-state pension arrangements. It is one of the main planks of European legal principles which underpin employment equality legislation. The European Court held that if the referring German court considered that a German life partner is in a comparable situation to that of a spouse entitled to survivor's benefits under the German pension scheme, then a breach of law arose due to direct discrimination on grounds of sexual orientation.

The full implications of the judgment for Ireland are not entirely clear. It seems to imply that when the civil partnership laws are passed here - legislation is due imminently - those in same-sex registered relationships must be treated as if they were married as far as pension scheme entitlements are concerned. It will be for Irish courts to decide whether or not a civil partner's rights are tantamount to those of a spouse, in which case entitlement to spouses' pension rights will ensue.

The legislators will presumably shortcut any requirement for judicial pronouncement in this area and, instead, will provide that the civil partnership legislation will be overriding so that trustees and employers will be obliged to provide same-sex civil partners with those benefits that married people enjoy. Employers and trustees need to take note and plan for this.

Two headline changes are being introduced. These were brought in on the back of the Pensions Board's report on trusteeship, which was published last year. They are designed to put in place arrangements to improve how pension schemes are run and managed.

Trustee Training

Most trustees appointed after the relevant part of the 2008 Act is brought into force will be required to undergo professional training within six months of being appointed a trustee and at least once every two years thereafter.

Trustees appointed before these provisions are operative will only need to undergo training every two years. The new rules do not apply to professional trustees or pensioner trustees. So trustees and employers take note and plan your forthcoming attendance at a training session and time off from work.

Trustees to Appoint Registered Administrators

The 2008 Act introduces the concept of 'registered administrators'. This change is to ensure pension schemes are properly run.

Trustees must make sure that their pension scheme is administered by a registered provider by 1 November 2008. From that date scheme trustees must ensure that a registered administrator provides 'core administration services' to the scheme. These are the preparation of annual reports and benefit statements and the maintenance of adequate record-keeping.

A registered administrator who fails to carry out these core services within the time limits specified in the legislation commits an offence and is liable to be prosecuted. The sanctions that may be imposed include a fine of up to €25,000 and two years imprisonment if the offence is very serious or a fine of up to €5,000 and imprisonment of up to 12 months if the offence is less serious. In the latter case the Pensions Board may prosecute in which case it may impose an on the spot fine of €2,000 instead of bringing proceedings provided the alleged offence has been remedied to the Pensions Board's satisfaction. (It appears that in most cases the Board prefers to impose fines rather than issue proceedings).

This new regime effectively imposes a much higher level of responsibility on a professional administrator and should ease the burden on unpaid non-professional trustees.

Most pension schemes probably already appoint a third party administrator. These must register with the Pensions Board before 1 November 2008 in order to carry out the functions of a registered administrator.

An annual review of their registration is also required. The Pensions Board has indicated that it will be publishing draft registration forms early in May. It will be responsible for auditing registered administrators. Failure by trustees to comply with either of these changes will be an offence carrying the sanctions outlined above.

For further information please contact Fiona Thornton.