Financial advisors warn of 'legal minefield' in changes to marriage law

The Association of Christian Financial Advisers is warning of a legal minefield ahead for advisers if the government changes marriage laws – and massive confusion and costs for pension schemes.

Some press reports say the cost to pension schemes of gay marriage could reach £4 billion. "These figures seem little more than guesswork, but what is certain is that high costs and great legal confusion lie ahead’" says Arwyn Bailey, of the Association of Christian Financial Advisers.

"ACFA is calling on the government to consider the significant financial implications of extending marriage beyond its traditional boundaries, based on principles of Judeo-Christian law."

A pension, in its simplest terms, is a trust, and trusts are enshrined in laws that extend back into antiquity. Those laws are ill-adapted to deal with today’s increasingly complex array of relationships. As the law stands, entitlements to pension benefits are less for those in civil partnerships than for married couples. Some are calling for the law to be equalised by allowing same sex couples to marry. But equality cuts both ways, so heterosexual couples would also need to be permitted the choice to enter into civil partnerships.

And therein lies a problem. To change the law and apply it equally for all could create a serious conundrum for trustees of pension schemes.

It may be hard to imagine why a couple considering lifelong commitment would consider a civil partnership that would result in a loss of potential pension benefits, but relationships – and laws dealing with those relationships – are becoming increasingly complex.

For example, take a same-sex couple in civil partnership who now wish to marry. If one, let’s call him Stephen, has an ex-spouse, would he have to annul his civil partnership before remarrying? What if Stephen had young children, who are being looked after by his ex-spouse who is paid maintenance? What happens when Stephen or his ex-spouse dies? Who would stand to inherit? Stephen’s ex-spouse, his children, or his civil partner?

As with most ancient laws there will be no easy answer. "We are now potentially entering a scenario with marriage for all; civil partnerships for all and civil marriages for all; possibly with children in the mix, leaving pension trustees scratching their heads," says Arwyn Bailey. "Professionals who advise on pensions and draft wills are about to plunge into a legal minefield."

ACFA is calling on the government to give weight to the practical, legal and cost implications of extending the definition of marriage, which could give rise to issues and disputes entrenched in laws dating back to the Middle Ages and beyond.

ACFA is the UK network of Christian financial advisers and related professionals. It aims to be the voice of Christian financial advice and champions best practice in the UK. The ACFA website offers links to Christian financial advisers across the UK. For more information see: www.christianfinancialadvisers.org.uk