New Pension Law to Benefit Same-Sex Partners

The following description of the new law and its impact is from Jonathan Peterson, Pension Overhaul Boon to Domestic Partners, Los Angeles Times, Aug. 17, 2006:

Partners in same-sex relationships would be among those who save money — often tens of thousands of dollars -under a little-noticed tax provision in the new pension law signed by President Bush today.

In a change lauded by gay activists, the new law will allow heirs other than spouses who inherit retirement savings to escape a costly tax hit by rolling the savings nest eggs into individual retirement accounts. The change would apply to anyone who is not a spouse and inherits a workplace retirement account, such as a 401(k) plan.

While the measure was not written specifically for same-sex couples, gay advocates and others observers said the change represents a significant shift in how federal tax law treats domestic partners who are not married.

Special thanks to Prof. Joel C. Dobris of the University of California– Davis for bringing this article to my attention.