New Study Released During National Save for Retirement Week Documents How Lack of Federal Recognition for Same-Sex Couples Reduces Their Retirement Income and Survivor Benefits
(LOS ANGELES) A new study released yesterday details the inequalities faced by same-sex couples in employer-sponsored retirement plans. Without legal recognition of their relationships under federal law, the report concludes, lesbians and gay men have less retirement income and are disadvantaged in their ability to pass on savings to their families after their death.
The study, "The Impact of Inequality for Same-Sex Partners in Employer-Sponsored Retirement Plans," provides the first detailed demographic portrait of older same-sex couples. It was released by the Williams Institute at the UCLA School of Law with funding support from Merrill Lynch in conjunction with National Save for Retirement Week.
"The findings show that, in particular, female same-sex couples have far less retirement income than different-sex married couples," says study author Naomi Goldberg. Key findings of the report include:
-- Female same-sex couples over 65 have almost 20% less income than
different-sex married couples.
-- Only 50% of female same-sex couples have at least one member eligible
for an employer-sponsored retirement plan. That compares to 56% of
different-sex married couples and 79% of male same-sex couples.
-- Older female and male same-sex couples receive less income from
traditional retirement sources--retirement, survivor, and disability
pensions--than older different-sex married couples.
-- Men in same-sex couples earn less than their heterosexual
counterparts, but appear to work for more years.
The study also analyzes the ways in which elderly lesbians and gay men are disadvantaged when their partner or spouse dies. Upon death, unlike married different-sex couples, 401k balances and remaining assets cannot be passed tax-free to the surviving same-sex spouse or partner. In particular, these studies conclude:
-- Even in states where same sex couples can marry, private employers can
discriminate against same-sex married couples for the purpose of
welfare and pension plans because of the reach of the federal Defense
of Marriage Act (DOMA); thus, same-sex couples typically cannot avail
themselves of pension survivor benefits.
-- Surviving same-sex spouses or partners are unable to access social
security spousal or survivor benefits. As a result, they lose out on
an estimated $5,700 each year in benefits.
-- Because same-sex surviving spouses cannot have the balance of their
dead spouse's 401k transferred directly to them, they must begin
making withdrawals immediately- often resulting in a higher tax rate
and missing out on potential earnings and the ability to withdraw when
they are really needed.
"The bulk of these inequalities are a direct result of the Defense of Marriage Act, which forces the federal government to treat same-sex couples differently than married couples when it comes to retirement savings or estate taxes after death," said Goldberg.
"Even without repealing DOMA, Congress could address these inequalities similar to the way it allowed same-sex partners to rollover the balance of their dead spouse's 401ks in 2006. While not perfect, the Pension Protection Act has at least moved same-sex couples closer to equality in the treatment of their retirement assets."
The full report is available at http://www.law.ucla.edu/williamsinstitute/home.html.