Survivors’ pensions – Age limit of 62 in “late marriage clauses”
Besides old-age and disability insurance benefits for their employees, the retirement schemes of many companies also provide for survivors’ pensions. In this regard, there are frequently rules that make survivors’ pensions subject to a particular maximum age by which time a marriage or registered partnership will have to have taken place (the so-called “late marriage clause”). The Federal Labour Court (Bundesarbeitsgericht, BAG) has now issued recent rulings on the topic of the age limit of 62 years that should be viewed in the context of the previous rules.
The respective clauses will be reviewed with reference to the German General Equal Treatment Act, in particular, in order to determine whether or not they constitute age discrimination clauses. In such a case, the clause would basically be invalid and the pension would have to be granted to the employee or the survivor or adjusted “upwards – a legal consequence with serious economic burdens for the respective company.
Previous outcomes from important BAG rulings on the “late marriage clause”
(1) Discrimination on the basis of an age limit of “60” – The starting point was a case brought before the BAG, in 2015, where the court had to rule on a late marriage clause that provided as a condition for claiming a widow’s pension that the employee who was entitled to the pension would have to have got married before he reached the age of 60 years. The BAG rejected this clause as being invalid because it was “age-discriminatory” (ruling from 4.8.2015, case reference: 3 AZR 137/13).
(2) No discrimination on the basis of an age limit of “65” – By contrast, in 2017, the BAG held that a late marriage clause, according to which no entitlement to a survivor’s pension would arise if the deceased employee had been 65 years or older when he had married, was indeed valid (ruling from 14.11.2017, case reference: 3 AZR 781/16).
New BAG ruling on discrimination in the case of a link to a fixed age limit of “62”
In two recent decisions on late marriage clauses, where an employee would only be assured a survivor’s pension for his spouse if the marriage had taken place before the employee had reached the age of 62, the BAG ruled as follows.
(1) In the BAG ruling from 22.1.2019 (case reference: 3 AZR 560/17) the court decided that the clause (age limit of 62) did not violate the ban on age discrimination if reaching 62 years constituted a fixed age limit for the pension scheme; the age limit denoted when the pension benefit could be expected to be drawn.
(2) Then again, in a second case (BAG ruling on the age limit of 62 from 19.2.2019, case reference: 3 AZR 215/18; see also the BAG ruling from 19.2.2019, case reference: 3 AZR 198/18, with an age limit of “63“), the court decided that the clause would unduly discriminate against the employee because of his age if the fixed age limit did not comply with any structural principle under the occupational pension regulations. In reaching a fixed age limit this could be the occurrence of the event giving rise to retirement benefits, or the termination of employment.
Please note: There is a clearly identifiable trend in both recent BAG rulings, namely, that a late marriage clause is not discriminatory in cases where the age limit complies with a “structural principle” related to the company pension and, thus, does not appear to be arbitrary.
Recommendation: If, due to the requirements of the court ruling, a need arises for adjustments to existing pension schemes there would have to be clarification as to whether or not an adjustment can be made to the rules of the existing pension scheme and by what means. In any case, future pension commitments should use the current standards in the supreme court rulings as a guide.