For Immediate Release:
Thursday, Aug. 17, 2006
PENSION LAW INCLUDES IMPORTANT PROTECTIONS FOR SAME-SEX COUPLES UNDER FEDERAL LAW
Human Rights Campaign Helps Secure Key Provisions to Assist GLBT and Other Americans
WASHINGTON — The Federal Pension Protection Act passed by Congress and signed into law today by President George W. Bush contains two key provisions that will extend important financial protections to same-sex couples and other Americans who leave their retirement savings to non-spouse beneficiaries. The bipartisan provisions in the bill are a step forward in equality and stem from a continuous effort led by the Human Rights Campaign.
“There is a large group of Americans that are left behind in traditional pension benefit models. We need to do better to keep these groups from falling through the cracks,” said Sen. Gordon Smith, R-Ore. “I am pleased that the pension reform legislation takes an important step to fill this gap by equalizing treatment in retirement savings vehicles for non-spouse beneficiaries.”
“We need to address the economic and legal barriers that affect many American families — from providing equal access to family law, to equal opportunities in the workplace. All families need to be able to plan and save for their future,” said Rep. Benjamin L. Cardin, D-Md.
“For gay couples and all Americans with non-spouse beneficiaries, death and taxes weren’t only certain, but also times of great and unequal financial difficulty. Today marks an important day for fairness under the law in America,” said Human Rights Campaign President Joe Solmonese. “For four years, the Human Rights Campaign worked closely with members of Congress to secure these provisions and carefully guide them through the political process. In a challenging political climate, we persevered and helped to secure critical federal protections that will make difficult times for domestic partners a little easier.”
The first provision allows the transfer of an individual’s retirement plan benefits to a domestic partner or other non-spouse beneficiary (sibling, parent, child, etc.) when the individual dies. Specifically, the surviving partner (or other non-spouse beneficiary) will now be able to transfer his or her deceased partner’s retirement funds into an Individual Retirement Account and either draw down the benefits over a five-year period, or over his or her own life expectancy. In the past, surviving same-sex partners or other non-spouse beneficiaries in similar situations were typically forced to withdraw the entire amount as a lump sum and incur immediate tax charges. In addition, this action often bumped the survivor into a higher tax bracket because the withdrawal was counted as taxable income to the beneficiary.
The second provision, which addresses retirement plan hardship distributions, allows gay couples (and others with non-spouse, non-dependent beneficiaries — siblings, parents, children, etc.) similar access to laws that permit people to draw on their retirement funds in the case of a qualifying medical or financial emergency. In the past, the federal law covered only the spouses or dependents of employees when it came to accessing retirement funds during an emergency.
“This bill provides much-needed support for non-spousal beneficiaries and will have meaningful impact,” said David Ratcliffe, national co-leader of Merrill Lynch’s LGBT Professional Network and director of the firm’s Center for Philanthropy and Nonprofit Management. “Specifically, passing these provisions means that when families are at their most vulnerable, they will have new options under the law that should alleviate some of the stresses that come in to play with the loss of a loved one.”
A fact sheet on the difference this measure makes in the lives of gay, lesbian, bisexual and transgender Americans can be found at www.hrc.org/pensionbill.
The pension reform legislation, H.R. 2830/S. 1783, was introduced in the U.S. House of Representatives on June 9, 2005, and passed Dec. 15, 2005, by a 294 to 132 vote. It was introduced in the Senate on Sept. 28, 2005, and passed Nov. 16, 2005, by a 97 to 2 vote. Following passage in both houses, several months were spent negotiating differences between the two bills. Final congressional action was taken Aug. 3, 2006, when the Senate passed by a 93 to 5 vote an amended version of the House legislation. President Bush signed the measure into law on Aug. 17, 2006, at the White House.
The Human Rights Campaign is the largest national gay, lesbian, bisexual and transgender political organization with members throughout the country. It effectively lobbies Congress, provides campaign support and educates the public to ensure that GLBT Americans can be open, honest and safe at home, at work and in the community.
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Originally Posted by A_DeAngelo
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