Sunday, February 22, 2009

Domestic Partners eligible for Accidental Death Benefits

In 2000 the NYS legislature expanded the list of eligible beneficiaries for benefits payable in the event of an accidental death of a member of the pension system. There are only a few accidental deaths that occur each year, usual less than five. There was, however, intense political pressure to provide this benefit to domestic partners, especially to members and their partners who were not eligible to marry.

An accidental death, as opposed to an ordinary death, is one which is caused by an "accident" on the job. The term "accident" has a legal definition.

For example, an event where a member dies on the job due to heart attack with no unusual circumstances, would not qualify as a accidental death. It would of course be considered an ordinary death for benefit purposes. If a sanitation worker is hit and killed by a car while collecting garbage, his/her beneficiaries, however, would be eligible for a accidental death benefit.

This change to the law was broadly written. It added a new final class of beneficiaries to the list of eligible accidental death beneficiaries. This class was defined as the group of beneficiaries chosen by the member to receive his/her ordinary death benefit. There are no restrictions on who a member may designate as his/her beneficiaries for the ordinary death benefit. For example, a member could designate everyone on his church bowling team.

The historical policy idea behind the accidental death benefit is to provide for the family of the deceased member, first the spouse, then the children, then the dependent parents, and now the domestic partners.

In accord with an old fashion sense of order, the spouse is the primary eligible beneficiary but only as long as he/she does not remarry. Upon remarriage the minor children (Tier 1&2: age 18 --Tier 4: age 25) become the eligible beneficiaries until they come of age. Then a surviving dependent father or mother of the deceased member becomes eligible. Interestingly spouses of deceased police officers, firefighters, and sanitation workers (Tier 1&2) may remarry without losing the accidental death benefit.

The wording in the new law, however, created a significant expansion of the benefit structure of the accidental death benefit. The operation of the list of eligible beneficiaries under the accidental death benefit is a cascading sequence of beneficiaries as the previous class becomes ineligible.

Now, when the proceeding beneficiary classes are exhausted, this new class of beneficiaries become eligible for this benefit. The class consists of the beneficiary or beneficiaries designated by the member to receive the benefit payable upon an non-accidental death of the member. These beneficiaries are now eligible for the accidental death benefit for the rest of their lives.

This change in the law makes any ordinary death beneficiary of any age eligible for the accidental death benefit, not just domestic partners. A members should factor this into his/her decision to designate beneficiaries for the ordinary death benefit. The member is now, in effect, able to also designate beneficiaries for his/her accidental death benefit.

This is a real change in the accidental death benefit. The payout window now expands from an average of 35 years to 70 years assuming that a member has designated his/her children as beneficiaries. It also makes spouses eligible for the benefit after remarriage, if the member had designated the spouse as a beneficiary. The spouse would continue to receive the benefit or again receive the benefit after the eligible children come of age. Of course the children, as ordinary death beneficiaries, could also become partial beneficiaries for the rest of their lives. Individual benefit payments would change as beneficiaries in this class die.

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