Secretary of State v GS

For a contracted-out occupational pension scheme, the amended definition of pensionable age preserves age 60 for a woman’s entitlement to a guaranteed minimum pension. That entitlement may therefore engage a reduction of the additional element of a widow’s pension under section 46 of the Pension Schemes Act 1993.

However, section 48 creates a limited deemed-entitlement rule for qualifying pre-6 April 1997 payments. For calculating the section 46 reduction, a guaranteed minimum pension attributable to such payments is treated as arising only when the woman reaches her state-pension age. The Secretary of State must identify and exclude that component when calculating the deduction before that date.

The respondent was a retired teacher receiving an occupational pension and a widow’s pension. She turned 60 in July 2011 but, under the transitional provisions of the Pensions Act 1995, did not become entitled to a state pension until November 2012.

The Secretary of State reduced the additional pension within her widow’s pension from her 60th birthday, on the basis that she was entitled to a guaranteed minimum pension. The First-tier Tribunal allowed her appeal, holding that a reduction could begin only when she became entitled to a state pension.

The Secretary of State appealed. The central issue was whether section 48 of the Pension Schemes Act 1993 affected the calculation of the deduction before the respondent reached her state-pension age.

1. Appeal allowed. The First-tier Tribunal’s decision involved an error of law. It was set aside and the case was remitted for rehearing.

2. Under section 13 of the Pension Schemes Act 1993, a contracted-out scheme had to provide a woman with a guaranteed minimum pension when she attained pensionable age. The amended section 181 preserved age 60 as pensionable age for provisions relating to guaranteed minimum pensions, other than sections 46 to 48. The respondent was accordingly entitled to her guaranteed minimum pension from age 60. The tribunal had wrongly treated her entitlement as beginning only on 6 November 2012.

3. Section 46 required a reduction in the additional element of the widow’s pension during a period when the respondent was entitled both to that benefit and to a guaranteed minimum pension. But section 48 had a distinct and limited function. For qualifying minimum payments made before 6 April 1997, it required the Secretary of State, when making the section 46 calculation, to treat the relevant guaranteed minimum pension as arising only when the respondent reached her state-pension age under Schedule 4 to the Pensions Act 1995.

4. The Secretary of State therefore had to determine what part, if any, of the occupational pension was attributable to qualifying payments within section 48 and disregard that part when calculating the deduction before 6 November 2012. The available facts did not permit that determination. The case was remitted to the First-tier Tribunal for evidence and findings on that issue.

• Upper Tribunal (Administrative Appeals Chamber): the Secretary of State’s appeal was allowed. The First-tier Tribunal decision was set aside and the case remitted for rehearing.

• First-tier Tribunal: allowed the respondent’s appeal against the reduction of her widow’s pension, holding that deductions could begin only when she became entitled to a state pension.