ERF to recognize same-sex couples

Police and Fire Pension board stalemated, accused council members of having a political agenda

 
DAVID TAFFET  |  Senior Staff Writer
The boards of both the Dallas Police and Fire Pension and Employees’ Retirement Fund of the City of Dallas (ERF) this week came to different conclusions following discussions on how to equalize benefits to employees with same-sex partners: ERF found a solution, while Police and Fire stalemated.
Not only has the Dallas City Council instructed all city agencies to equalize benefits, but the Internal Revenue Service issued guidance to all 401 pension plans ordering them to recognize married same-sex couples. The deadline for such action, set by the IRS, was Jan. 1.
The IRS based its ruling on United States v Windsor, the case in which the U.S. Supreme Court struck down the part of the Defense of Marriage Act banning the federal government from recognizing same-sex marriages performed in jurisdictions where such marriages are legal. Failure to comply with the IRS rule would mean contributions to the pension plans would no longer be tax deferred and the plan itself would be subject to taxation.
Frances Pieters is one former employee affected by the ruling. Pieters worked in the Dallas city attorney’s office until she retired in 2009. She and her wife were married in Canada before she retired.
When Pieters retired, she applied for her pension and checked off the married box. Her application was rejected, because the Dallas pension funds don’t recognize same-sex marriage.
Pieters said if she were married to a man and she were to die first, her husband would receive half her pension payment for the rest of his life. Because she’s married to a woman, she can only designate her as a beneficiary. The pension funds guarantee 10 years of payments, so her wife would receive payments up to that point.
At the city pension fund board, which met on Tuesday, Feb. 10, former Dallas City Councilman Chris Luna, an attorney, read for the board portions of the IRS ruling that apply to federally chartered pension funds. In interpreting the Windsor decision, the IRS has determined that same-sex couples must be treated the same as opposite-sex couples for the purpose of pension fund benefits and distributions based on the law in the jurisdiction where the couples marry, rather than on the law in the jurisdiction where they live.
In its pension plan ruling, the IRS interpreted that to mean that it was unfair for an opposite-sex spouse to receive benefits beyond the employee’s death when an same-sex spouse wouldn’t.
Attorney Gary Lawson, who advises both pension funds, disagreed. He advised the board that neither Windsor nor the IRS guidance applied to the fund.
He insisted state law doesn’t allow the fund to recognize same-sex couples, despite the IRS statement that place of celebration should be honored for recognizing a marriage license, not place of residence.
The board agreed that the U.S. Supreme Court will likely rule in favor of marriage equality, but since neither the Supreme Court nor the Fifth Circuit Court of Appeal — which has heard appeals on marriage cases from Texas, Louisiana and Mississippi — has yet ruled on the issue, Lawson insisted that
Texas’ ban on legal recognition of same-sex marriage holds sway, even though that ban has been overturned by a federal district judge and the IRS has already issued rulings specifically stating otherwise.
Councilman Lee Kleinman, who sits on both boards, accused other board members of delaying benefits they know they will be providing before the end of the year.
After almost five hours of discussion, the two sides reached a compromise that they approved unanimously.
The resolution they passed asks the Dallas city attorney for a written opinion that same-sex couples should be covered by the pension. Once the board receives that opinion, benefits would immediately be offered to same-sex couples. The pension also will ask the IRS for an expedited clarification about whether they are required to offer those benefits to maintain 401a nonprofit status.
Finally, should the Supreme Court rule against marriage equality, an attempt will be made to recoup any benefits given to same-sex couples.
Once benefits begin, Pieters said she hopes the board will go one step further. The IRS guidance requires pensions to offer benefits retroactively to the 2013 Windsor decision. She retired in 2009, however, and noted the IRS ruling allows pensions to go back further.
John Rogers, a former assistant city attorney who retired last year, said he believes only a handful of people are in Pieters’ position and hopes the pension board will do the right thing and honor all employees who were married on their retirement date.
 
Police and Fire
The Police and Fire Pension board, on the other hand, did not come to an amicable decision at its Thursday, Feb. 12 meeting. Elected trustees accused the four city councilmen who sided with expanding coverage to include same-sex couples of having a political agenda.
Councilman Scott Griggs tried to make the issue as simple as possible: “They risk their lives for us every day. It’s unfair to make them wait another day.”
Kleinman made at least five motions to resolve the issue, starting with the compromise passed by ERF.
When that motion and an amended version of the motion both failed, Kleinman made a motion to send the issue to members of the pension for a vote.
But board Chair George Tomasovic and Vice Chair Dan Wojcik made it clear they wanted separate elections for that issue and for the trustee election coming up in April. Both trustees are up for re-election at that time, and they both accused supporters of equal benefits of having a political agenda.
Wojcik’s preferred solution was to wait until the Supreme Court rules on the marriage equality cases before it, probably in June.
Following the meeting Tomasovic sent the following written statement to Dallas Voice:
“It has long been the consensus of the Dallas Police and Fire Pension System (DPFP) board of directors that the same-sex spouses of our members should be eligible for survivor benefits. That has never been a question. The only concern the board has on this issue is the legality of providing those benefits since Texas law does not recogniz same-sex marriages. Fortunately, the legal landscape on this issue appears to be changing and these changes open up new options for DPFP to consider in providing benefits to same-sex spouses.
“The debate on this issue at today’s board meeting was emotional and heated. But it also led board members to reach a compromise that balances the needs of our members with the necessity to protect the pension system from the very real legal liabilities it could face in providing same-sex benefits.
“The board recognizes that its decision today did not make everyone happy, but its actions today provide a realistic path and timeline we believe will allow us to resolve this issue soon and clear the way to providing the benefits that all of our city’s police officers and fire fighters deserve.”
Both the council members who sit on the board and police officers who attended the meeting made it clear they were out of patience with the other board members’ delay tactics.
Officer Monica Cordova has a 14-year-old son and a six-month-old daughter and was married last year. She said she only wants to protect her children.
The board assured the officers that should the Supreme Court overturn the Texas anti-marriage equality law, all benefits would be retroactive.
But Police Major Barbara Hobbs reminded board members that if something were to happen, “By then, [spouses depending on benefits] could lose [their] home.”
When she suggested board members put pension benefits for their own wives on hold until the Supreme Court rules, Kleinman jumped on the idea.
“I’ll make that a motion,” he said.
“Second,” both councilmen Tennell Atkins and Griggs said.
But the motion was voted down by the same 5-7 margin as Kleinman’s previous resolutions. Only Joe Schutz, the board’s newest and youngest member, voted with the four councilmen.
When accused of having a political agenda a second and third time, Councilman Philip Kingston said, “Gotta drag you into the 21st century one way or the other.”
The board voted on other options, including waiting until the Supreme Court rules. Every other option failed by a tie vote.
After the meeting, Kleinman said that if the 5th Circuit Court of Appeals rules on the pending marriage case it heard in January and the Supreme Court refuses to place a stay on the ruling, as it refused to do this week in Alabama and last month in Florida, Texas will become a marriage equality state and he’ll call a special session of the board.
He said he’ll call for the pension to begin offering benefits immediately.
Kleinman said the city attorney’s favorable opinion on ERF will be read at the Feb. 18 council meeting. The council will vote to equalize benefits. Benefits should begin next week.
But Police and Fire Pension retirees will have to wait.
Metro Task Force Officer Bronda Davis left the meeting frustrated.
“We’re not asking for anything special,” she said. “Just the same benefits anyone else gets.”
Meanwhile Resource Center Communications and Advocacy Manager Rafael McDonnell, who attended the meeting, has started the process of filing a complaint with the IRS Office of Employee Plans based in Cincinnati on behalf of Resource Center.
“The plan is out of compliance,” McDonnell said. “It’s up to the IRS to decide what the next step is.”
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More couples eligible for Medicare
Social Security is now processing some Medicare enrollments for same-sex couples that were previously being denied, Fairness Fort Worth President David Mack Henderson noted this week.
Implementing the U.S. Supreme Court’s 2013 United States v Windsor decision, the Centers for Medicare and Medicaid Services has addressed policies related to Medicare entitlement and enrollment to Part A and Part B of the program.
“It’s extremely significant for our community members, especially those who are seniors,” said Henderson said.
The ruling became effective Feb. 9 and applies to appeals and enrollment determinations made on or after June 26, 2013.
Enrollments for free hospital insurance, known as Medicare Part A, are open to uninsured spouses age 65 or older based on the work history of a current or former spouse, according to Medicare.gov.
Spouses may also be entitled to reductions in Part A premiums based on the work history of a current or former spouse, requests for special enrollment periods based on group health plan coverage from current employment of a same-sex spouse and reductions in late-enrollment penalties based on group health plan coverage from current employment of a same-sex spouse.
Another benefit is for people with End Stage Renal Disease based on the work history of a current or former spouse.
These benefits that were offered to opposite-sex married spouses were previously denied same-sex couples.
Retroactive to June 26, 2013, a same-sex spouse may apply for Medicare based on the Medicare taxes paid by the spouse to get premium-free Part A.
Medicare Part B, which is medical insurance, is available to a same-sex spouse with a premium, if eligible.
This article appeared in the Dallas Voice print edition February 13, 2015.