A Brief Introduction to the Equity for Surviving Spouses Act

Abstract

In New York, surviving spouses are protected by the right of election. But there is an unjust and avoidable flaw in those protections for the surviving spouses of New York public sector retirees: they may be left with no survivor benefits whatsoever, because the default benefit is an annuity during the life of the retiree. The Retirement Equity Act of 1984 (REACT) provides a tried-and-true approach that corrects this flaw. This approach has been in place for forty years and now protects the spouses of 100 million active private sector employees from such tragedies. Under REACT, the surviving spouse is entitled to a survivor benefit at least equal to that of a joint and 50% survivor benefit form of the retiree’s benefit. This article describes the proposed Equity for Surviving Spouses Act (ESSA) which would remedy this flaw by following the REACT approach.

Keywords: Retirement plan, profit-sharing plan, pension plan, savings plan, retirees, equity, ERISA, REACT, surviving spouses, survivor benefits, death benefits, New York, right of election, marital rights, family protections, domestic relations, tax

JEL Classification: I18, I31, J26, J32, J33, K34, K36