by Eric Resnick

Washington, D.C.--Two provisions of a large pension reform bill will help gay and lesbian couples with nest egg planning.

President Bush signed the Federal Pension Protection Act of 2006 into law on August 17.

The bipartisan measure contains two parts that expand the opportunity for non-spousal beneficiaries of private retirement funds to defer tax liability.

The financial services community and advocates of gay, lesbian, bisexual and transgender rights, including the Human Rights Campaign, have been working toward these reforms since 2002.

They were adopted for the final versions of the bill by the House Ways and Means Committee and the two Senate committees on Health, Education, Labor, and Pensions and Finance.

Neither was considered to be controversial.

According to HRC president Joe Solmonese, former Ohio Republican representative Rob Portman of Cincinnatiwas among the measures? original proponents. He is currently the U.S. Trade Representative.

The rule changes allow private retirement plans that put unmarried couples closer to legally married ones in tax advantages when they access the money in the accounts.

The new law does not create any new status or recognition of unmarried couples.

According to Solmonese, legally married spouses still have ?more rights and unique additional advantages? including a longer tax deferral period and the opportunity to create joint accounts.

However, roughly a third of the 45 million Americans covered by private retirement plans are unmarried, including all LGBT people under federal law. They can take advantage of the new rules.

??There is a large group of Americans that are left behind in traditional pension benefit models,? said Oregon Republican Gordon Smith, a Senate Finance subcommittee chair. ?I am pleased that the pension reform legislation takes an important step to fill this gap by equalizing treatment in retirement savings vehicles for non-spouse beneficiaries.?

?We helped to secure critical federal protections that will make difficult times that will make difficult times for domestic partners a little easier,? said Solmonese.

The first provision changes the rules for transferring an individual?s retirement plan benefits to a domestic partner when the individual dies.

Formerly, the surviving partner was required to withdraw the entire amount as a lump sum. This was taxable income, and often meant a large immediate tax burden to the surviving partner.

The new rules allow the surviving beneficiary to transfer the funds into an individual retirement account of their own and draw on the money over a five-year period, or based on their life expectancy. That allows it to remain untaxed longer, and lets the beneficiary avoid the lump sum tax.

The second provision allows same-sex couples and families to access their money in a way similar to married couples in the event of a qualifying medical or financial hardship.

Under the old rules, this access was denied to unmarried couples.

?This bill provides much needed support for non-spousal beneficiaries and will have meaningful impact,? said David Ratcliffe, co-leader of Merrill Lynch?s LGBT professional network, which lobbied for the provisions.

?Specifically,? Ratcliffe concluded, ?passing these provisions means that when families are at their most vulnerable, they will have new options under the law that should alleviate some of the stresses that come into play with the loss of a loved one.?