Breaking up is hard to do
Here's a new Oregon court case at the intersection of two hot-button topics: same-sex couples and public employee pensions. If a retired state employee who's in a gay domestic partnership designates his or her partner to receive a continuing retirement annuity after the employee dies, and then the couple breaks up, can the retired employee cut the "ex" out of the contingent future annuity and thereby increase the employee's own monthly benefit? Apparently, hetero- married employees get this option, but the state retirement board says it can't allow the same option for gay ex-domestic partners without risking running afoul of the federal tax code. (Federal law does not recognize same-sex marriage.)
Last week, a state appeals court ruled that the board couldn't deny the option simply because it might screw up the tax treatment of state pensions -- the board would have to find that it would definitely do so. And so round and round the legal wheels spin.
Although this narrow case may be resolved within a few years, the underlying legal mess regarding the rights of gay couples probably won't get straightened out for another few decades -- at least.
| Posted at 5:47 PM | Permalink |
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Comments (4)
Well the feds don't like it when non-married folks cover their partners and their partners kids on their company health insurance but their rules just say that the company must declare their part of the contributions as taxable income and that the portion contributed by the partner is taxable income(while a married couple would have the spouse's contribution not be considered taxable and the company's contribution would not be taxed). Now there's some special rights.
I suspect that if PERS asked the feds how this situation should work, there'd be an answer that would not include keeping ex's on the dole forever.
Posted by LucsAdvo | September 8, 2009 8:18 AM
IF PERS asked the Feds is the operational part of the sentence. The fact is that PERS consistently asserts that its tax status would be jeopardized if they do x, y, or z, without ever showing evidence that this is the case. Here we have a set of judges who've finally called PERS up short on this point and have said, "show me the proof" that this is true. Otherwise, just do it. PERS has never sought a tax court ruling or a private ruling to clarify the tax situation for the plan in these kinds of cases. They are so busy spending member money and taxpayer money to bully members into litigation, it is nice for a change to see a court say, "whoa, wait a minute here". Let PERS get a tax ruling before saying yea or nay.
Posted by mrfearless47 | September 8, 2009 10:26 AM
I get that many governmental agencies think that they actually make law and policy rather than implement it. But that's because the executive branch of government is out of control and the legislative branch is spineless worrying about re-election.
Posted by LucsAdvo | September 8, 2009 3:27 PM
Too true! Do we actually have an executive branch in Oregon?
Posted by mrfearless47 | September 9, 2009 8:49 AM