President Bush signed the Federal Pension Protection Act into law yesterday, which includes two provisions that will greatly benefit same-sex couples and other non-spouse beneficiaries. The first provision allows the transferal of a deceased person’s retirement plan benefits into her or his domestic partner’s Individual Retirement Account without incurring taxes. Previously, the partner of the deceased had to withdraw the entire amount of the benefits in one lump sum and claim this amount as part of her or his taxable income. This often brought the survivor into the next tax bracket, forcing the survivor to pay higher taxes on the rest of her or his taxable income.
The second provision allows same-sex couples to draw on their retirement funds when faced with a medical or financial emergency. Married couples previously had this emergency access to each other’s retirement benefits.
Human Rights Campaign President Joe Solmonese commented yesterday on the importance of the legislation: “Today marks an important day for fairness under the law in AmericaÉ 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.”
These provisions also include other non-dependent, non-spouse beneficiaries, including siblings, parents, and children.
