Retirement Issues For Domestic Partners

By Dianna Doreen
Writer, mPower

Employers vying for qualified employees have increasingly recognized unmarried domestic partners in their employee compensation packages. Whether taking advantage of these benefits or still waiting for the trend to hit their companies, unmarried domestic partners should keep certain things in mind when planning for retirement.

Courting with benefits

In its 1999 report, The State of the Workplace, The Human Rights Campaign Foundation (HRC) released statistics that show how the number of employers offering domestic partner benefits has risen steadily since the 1980s.

Daryl Herrschaft, research coordinator at HRC, noted that the percentage of companies offering domestic partners benefits ranges from 13% to 18%, depending on who does the study.

The definition of domestic partners and what benefits are awarded varies from company policy to company policy, but most employers, including municipalities and universities, qualify domestic partnerships based on the cohabitation of two adults involved in a marriage-equivalent relationship. Some companies may only recognize same-gender domestic partnerships when doling out benefits.

Employers might offer both "hard" and "soft" benefits to domestic partners of their employees; for example, medical insurance as well as a gym membership, while others might only provide low-cost benefits that exclude health coverage.

The Employee Benefit Research Institute (EBRI), in its February 2000 Fact Sheet Domestic Partner Benefits, defines domestic partner benefits as "benefits that an employer voluntarily chooses to offer to an employee's unmarried partner, whether of the same or opposite sex."

EBRI says the trend toward offering these benefits results from a competitive labor market. " …Designing a benefits package that appeals to a diverse work force enables an employer to maintain a recruitment edge and communicates that the employer values a diverse workforce."

If you are part of a domestic partnership and are wondering whether your partner may be covered by your benefits, whom should you ask? Karen Altfest, CFA, a certified financial planner in New York City, recommends that unmarried couples should "simply go into the employer's human relations department together and ask what paperwork the company requires."

Indeed, there is no nationally recognized system in place that defines benefits guidelines for domestic partners, or even defines a domestic partnership. "Companies establish their own guidelines and policies, locally," said Jeremy Hendel, of the American Compensation Association, an organization that helps companies create domestic partnership policies.

The ACA is due to publish a document in April outlining methods employers can use to recognize domestic partnerships in compensation packages.

Where are you registered?

A newer option for unmarried couples that is cropping up in some urban areas is domestic partnership registries. Will this type of formalized announcement mean anything financially for domestic partners? According to the American Civil Liberties Union,"Registration systems have two purposes … they give a form of official status to the relationship ... (and) also create a mechanism for institutions that want to voluntarily adopt benefit systems or recognition systems."

Indeed, some companies may require you to register as domestic partners before they will extend benefits to your "other half".

To find out whether your city has a domestic partnership registry, phone the city government. The ACLU web site has a list you can check. To find out whether your employer requires you to register with the city, contact your human resources department.

Domestic partnerships are registered (declarations are amended as well) at the city clerk's office for a small filing fee. To register, you may not be registered as a domestic partner to anyone else, or married, or under age 18. The registry is signed by both partners and notarized by a witness, who does not have to be notary.

Next: Steps domestic partners should take for long-term financial health

The information provided here is intended to help you understand the general issue and does not constitute any tax, investment or legal advice. Consult your financial, tax or legal advisor regarding your own unique situation and your company's benefits representative for rules specific to your plan.

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