Some tax provisions of a new law called the the Pension Protection Act of 2006 signed by President Bush on Thursday, August 17, provides welcome news for domestic partnership proponents, although the exact impact on Colorado’s three ballot issues concerning gay rights this year is unclear.
Historically, only spouses have been allowed to roll a decedent’s 401(k) into an individual retirement account for the surviving beneficiary tax free. Now, a wide variety of persons, including domestic partners, will be able to do so — although still not on terms as favorable as those that apply to a surviving spouse. It also allows non-spouse beneficiaries to make hardship distributions from a 401(k).The fact that the Act is a sign of increasing national acceptance for non-traditional families may bode well for a proposal to enact a statewide domestic partnership statute in Colorado, and a companion ballot measure designed to preserve domestic partnerships in the event that the voters provide seemingly inconsistent support for the two other domestic partnership/gay marriage issues on the ballot.
The fact that the Act retains distinctions between married and unmarried couples, could remind opponents to a ballot measure to put a one man, one woman definition of marriage into the state constitution, rather than statute, as it is now, of why they want to oppose it.
The bill’s main provisions deal with pension underfunding concerns in the private sector, similar to those that have been raised about various public pensions including PERA in Colorado.
A rider to the bill, concerning donor advised funds, such as those managed by the Denver Foundation, addressed topics closely related to issues currently being litigated in the Colorado Supreme Court between Wells Fargo and the Denver Foundation, a community foundation which provides administrative support and investment expertise to many subfunds in the Denver area.
