Tomorrow, the U.S. Supreme Court will hear oral arguments in the first of two cases that may change the retirement landscape for millions of Americans: Hollingsworth v. Perry (the second case, U.S. v Windsor, will be heard on Wednesday). What do these cases, both dealing with same-sex marriage, have to do with retirement security, you wonder? Heterosexual spouses of workers participating in employer-sponsored retirement plans have rights that same-sex spouses do not. And that is an inequity that needs to be fixed.1
For example, in the event of a spouse’s death, a pension or retirement savings plan can be a much-needed lifeline for the surviving spouse. However, in the case of same-sex married couples, workers participating in pension plans can only name their same-sex spouse as a beneficiary if their plan allows it.
And even if a plan allows same-sex spouses to designate their spouse as their retirement plan beneficiary, there is no law requiring same-sex spouses to notify one another when making changes to their beneficiary designation. This is a basic spousal protection that has been afforded to heterosexual couples since 1984. The fact that same-sex spouses can change their beneficiary designations without spousal consent could result in a same-sex spouse being unknowingly disinherited after years of marriage.
Another concern is the Social Security survivor benefit. Because the federal government does not recognize same-sex marriage, these couples are ineligible to receive Social Security survivor benefits in the event of one spouse’s death.
These are just a few of the reasons why same-sex couples should be afforded the same legal protections that are provided to heterosexual couples in retirement plans. To provide for equal benefits to all Americans, the law needs to be changed. The Supreme Court’s decisions in these two cases have the potential to affect the retirement security of millions of Americans.
1 Even though my focus is on the impact these laws have on the ability of same-sex married couples to share retirement benefits with their spouses, it is important to point out that the laws regarding same-sex marriage vary from state to state, which results in married same-sex couples living in what this CNN article calls “50 Americas.”