PA Judge Declares LGBT Surviving Spouse Entitled to Pension Death Benefit

 PA Judge Declares LGBT Surviving Spouse Entitled to Pension Death Benefit

Bob Dylan sang 'the times they are a changing.'  Now is definitely one of those times.  Since the United States Supreme Court issued its decision in Windsor (holding that the Defense of Marriage Act violates the equal protection clause of the Constitution and is unconstitutional) there has been change afoot to provide federal rights to LGBT individuals regardless of where they reside.

 
On July 29, 2013 a federal district court in Pennsylvania issued a decision that the same sex spouse legally married to a deceased employee qualified as a 'surviving spouse' and was entitled to the pension benefits.  This is the first reported decision on the topic of ERISA benefits since Windsor was decided and the facts are very important!  ERISA is the Employee Retirement Income Security Act. ERISA:

· Protects pension funds of employees of private businesses

· Sets standards for an employee participating in a plan as well as whether a spouse has a right to part of the pension upon the employee's death.

When a plan complies with ERISA it receives tax preferences such as deferred income taxation while the plan assets grow.

Ms. Farley worked for a law firm in Pennsylvania, a non-recognition state. She and her wife married in Canada in 2006. Ms. Farley passed away in 2010.  Ms. Farley participated in a profit sharing plan at the law firm.  The plan provided a survivor annuity upon the employee’s demise.  The plan permitted naming a beneficiary who is not the spouse, with the spouses consent, and if no beneficiary was named, benefits were awarded to the spouse. The pension plan document stated it was to be interpreted based on ERISA law and the laws of Pennsylvania.

The parents of the deceased employee submitted to the court a notarized Designation of Beneficiary form, naming them beneficiary, allegedly signed by their daughter the day prior to her demise.  The Court questioned the authenticity of the form.  Regardless, the wife had never waived her right to be the beneficiary.  Both the parents and the wife claimed they were each entitled to the death benefits.

Because of the Windsor decision, the word spouse is no longer limited to meaning a person of the opposite gender and includes same-sex spouses in a valid legal marriage. For that reason, the Court decided that the plan complied with federal law. It was to be interpreted under federal, not state law and Ms. Tobits qualified as the surviving spouse and is to be awarded pension benefits of $41,000. Click here to view Court document.

Tip: Obtain a valid marriage license and complete, date and sign a designation of beneficiary form for all your pension plans. Provide the completed form and a copy of your marriage license to your employer.

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I had the pleasure of meeting and speaking with many individuals and couples about how the Windsor decision impacts them, when I spoke at The Richardson House at an event hosted by the Fort Lauderdale Gay Chamber of Commerce last week. Click here to see GFLGLCC event on Steve Rothhaus’ blog: Gay South Florida.

 

A couple shared with me their experience of changing the new spouse's surname to that of her wife. She was told to apply for a name change through the local circuit court (which would necessitate the payment of a filing fee).  Instead, she went to the local Social Security Administration office with her marriage license from Massachusetts and her passport and was able to apply for a new social security card that would use her wife's surname.

The application was processed and she was advised to expect to receive a new card in 7-10 business days.  Once she receives the new social security card she intends to take it to the Department of Motor Vehicles to apply for a new license with the new surname, and obtain an updated passport with the new surname. I will keep you posted on their progress as they pursue name changes on their documents.