Dallas pension board butts heads with staff over equitable treatment

Posted on 11 Apr 2014 at 8:55am

Board’s vice chair calls changes important, but attorney seems skeptical of every avenue to treat same-sex spouses equally

City

BACK AND FORTH | John Jenkins, left, vice chair of the Employees’ Retirement Fund board of trustees, said changing the pension plan was important for LGBT employees. But the fund’s staff attorney, Gary Lawson, right, seemed to refute the board’s suggestions for making the plan equal for same-sex spouses.

 

ANNA WAUGH  |  News Editor

The board of trustees for the city’s Employees’ Retirement Fund explored several avenues this week for making the city’s pension plan equal for same-sex spouses, ranging from changing definitions’ to putting the issue before voters.

After an hour of discussion Tuesday, half of which was spent in closed session discussing legal concerns, the seven-member board agreed to examine several options in the coming months.

Those include a joint venture with the city to request an opinion from the Texas attorney general, study new definitions for beneficiary, develop a study for property rights in the state, receive a definition of the IRS regulations, examine increased liability from legal challenges and consider the cost and efficiency of putting the issue to Dallas voters.

Under the current plan, opposite-sex spouses receive lifetime benefits when their spouse dies. But same-sex spouses are treated as designees, and their benefits run out after 10 years.

The Dallas City Council passed a comprehensive equality resolution last month directing the city manager to evaluate areas in city employment where disparities for LGBT employees existed. Among them, were the pension plans.

A timeline wasn’t established for the research to be presented to the board, but representatives with the city manager’s office are expected to make the first quarterly report to the council’s Budget, Finance and Audit Committee in June, so the pension board should have a recommended action plan by then.

John Jenkins, the board’s vice chair, said he wants staff to examine all the possible options for changing the policy to be more inclusive, which, based on the resolution, city staff and council members want to see happen.

“I just want us to look at all the options to keep this process moving forward,” Jenkins said. “I know there are some legal hurdles. … It’s obvious that this is important that we extend these rights to the lesbian and gay community.”

In addition to discussing the resolution, the board was briefed by staff on the state’s constitutional marriage amendment and the Texas Family Code, both of which prevent the state from recognizing same-sex marriages or unions.

The board also was brought up to speed on the recent ruling by a federal San Antonio judge in February, who declared the state’s marriage amendment unconstitutional in DeLeon v. Perry. The case is now headed to the 5th Circuit Court of Appeals.

The U.S. Supreme Court’s ruling last year found Section 3 of the federal Defense of Marriage Act unconstitutional, requiring the federal government to recognize same-sex marriages. But the high court didn’t rule on Section 2, which deals with state government recognition.

The board was presented with three options for moving the issue forward: wait until the courts issue a final ruling, change the language in the policy for the council and city voters to approve or change the policy under IRS standards.

According to the Dallas City Code retirement chapter, beneficiary is defined as “ a person who is entitled to payment of benefits under this chapter upon the death of a member, inactive member, or retiree.” Spouse is defined as a “the husband or wife of a member, inactive member, or retiree” and designee is “an estate, a person, or an entity” selected to receive funds.

Theresa O’Donnell, openly gay interim assistant city manager, said LGBT employees have argued that no change is necessary since the definitions don’t mention that spouses must be legally married under state law.

“I have read the entire plan very carefully and discussed it with my colleagues,” O’Donnell said. “The language and definitions are broad and very general in nature.  Our position is that no change is necessary, other than the attitudes and beliefs of the pension staff.

“The trustees clearly have the desire to do the right thing. However, the staff seems intent on finding impediments to make this as difficult as possible and protect the status quo.”

Whether the board would need to bring the item to the council and leave it up to city voters is questionable. The equality resolution directed the pension board “to take action as necessary to address the disparate treatment.”

“The board has the authority to “make a final determination of the eligibility of a member, inactive member, retiree or beneficiary,” according to the Dallas City Code.

Gary Lawson, the board’s attorney, said the option to amend the policy to IRS standards isn’t possible, as the regulations aren’t for government pensions. The city code has a section about complying with federal laws regarding benefit limits. However, the section of the IRS code mentions spouse, which was determined in August to apply to same-sex spouses of legally married couples.

Lawson said waiting for the courts would take longer than some people want to wait, adding that it’d be “terrific if the state Legislature would address this sooner.”

He also brought up the risk of lawsuits from people “who disagree with this as matter of philosophy or religion.” He mentioned that anyone can request an opinion from the Texas Attorney General’s office on the matter, and the opinion would ultimately side with state law.

But according to the attorney general’s website, that office is “prohibited by statute from giving a written opinion to anyone other than an authorized requestor.” Those who qualify as an authorized requestor are: the governor, the head of a department of state government, the head or board of a penal institution, the head or board of a charitable organization, the head of a state board, a regent or trustee of a state educational institution, a committee of a house of the Texas Legislature, a county auditor authorized by law, the chairman of the governing board of a river authority and a district or county attorney.

The attorney general’s office came out against domestic partner benefits last year, but the decision was not legally binding. Some governmental agencies then amended their healthcare plans to include a plus-one option.

The option of changing the definition of a beneficiary also was discussed by board members. Lawson suggested that could help prevent redefining a spouse or marriage, but he cautioned that things like not having the option of divorcing in the state needed to be considered and raise “really sound family law reasons that this becomes difficult.” The Texas Supreme Court heard two same-sex divorces cases last fall, but justices have yet to release their ruling.

O’Donnell said the discussion this week was disappointing when the change seems to simply be to treat same-sex spouses equally.

“I’m disappointed that both the ERF staff and attorney focused only on obstacles and unreasonable approaches that would continue the current discrimination against LGBT employees,” O’Donnell said. “It saddens me to know that today, on the 50th anniversary of the country’s Civil Rights legislation, we are still fighting for equal treatment.

“I applaud the board’s leadership and willingness to challenge the staff to explore viable options for eliminating the disparate treatment of legally married same-sex couples,” she added.

This article appeared in the Dallas Voice print edition April 11, 2014.

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