New Law That Bush Signed Protects Retirement Savings For Same Sex Partners
WASHINGTON – The Human Rights Campaign today hailed the passage of a law that protects partners who inherit retirement savings. The Worker, Retiree and Employer Recovery Act of 2008 (WRERA), signed by President Bush today, contains technical corrections to the Pension Protection Act of 2006 (PPA). PPA made it possible for employers to allow any nonspouse beneficiary of an employee’s retirement plan—including an employee’s same-sex partner—to roll inherited retirement benefits directly to an individual retirement account (IRA) and avoid immediate taxation. WRERA requires that all employers provide this rollover opportunity to nonspouse beneficiaries.
“This legislation secures much-needed protection for lesbian and gay couples,” said Human Rights Campaign President Joe Solmonese. “Our community faces unique challenges in preparing for retirement because we are denied Social Security spousal and survivor benefits. Protecting our hard-earned retirement savings is even more crucial to us, and until now, the tax code made it that much harder.”
Before 2007, partners who inherited retirement plan savings typically faced immediate taxation on inherited benefits, unlike different-sex spouses, who could roll savings over to an individual retirement account (IRA) with no tax penalty. Under the PPA, as of January 1, 2007, qualifying plans could permit any nonspouse beneficiary—including a domestic partner, parent or sibling—to roll over inherited retirement benefits paid as a lump sum directly to an IRA. Qualifying plans include defined benefit plans (pensions), 401(k) plans, employee stock ownership plans (ESOPs), profit-sharing plans, money purchase plans, 403(b) plans and governmental 457(b) plans.
Unfortunately, this provision of the PPA was subsequently interpreted to be optional for employers, meaning each company had to affirmatively adopt this protection for partners under each qualifying plan. Under the WRERA, all qualifying plans that pay lump sum benefits to nonspouse beneficiaries are required to provide the rollover opportunity as of January 1, 2010.
“This is progress toward eliminating the more than 1,000 inequities that our families face under federal law,” continued Solmonese. “U.S. employers should make the rollover provision available as quickly as possible—before the 2010 deadline—and LGBT workers should ensure their partners and children are designated as beneficiaries.”
http://www.hrc.org/11821.htm
It actually makes you wonder if Goober knew what he was doing when he signed this bill.
Regards,
Lee
