The Chair recognizes 273 COUNCIL OF THE WHOLE - BILL NO.'S 970745, 970749, 970750 Councilman Nutter.
Thank you, Mr. President. Mr. President, I would like to be able to ask these witnesses questions relative to the various bills, but I would like to be able to engage in discussion with them about the bills as they are proposed to be amended. So that at least for the record, with the government witnesses, we are not talking about something that is either not proposed or not relevant, should the bills be amended. So with that in mind, there is a proposed amendment to Bill No. 970745, and that reads: Re-number the new subsection of section 18 114.1 of the municipal retirement benefit plan 1987 ordinance that is added by Section 2 of the bill, comma, as follows. Strike the letter (d), replace with the letter (e), to then read any other person as designated by the employee. That is, Mr. President -- there was a technical drafting error, and the (e) should have been an (e), and it was printed as a (d). That is 274 COUNCIL OF THE WHOLE - BILL NO.'S 970745, 970749, 970750 the only proposed amendment for that bill. With that amendment being read into the record and put forward, Mr. Hayllar, I would like to ask you and the other Pension Board representatives a question with regard to the current pension system and provision for designation by public employees. Again, this amendment is correcting a drafting error. Presently, a public employee has the right to give their benefits to a certainly category of people; is that correct?
And does that the category generally include either a spouse, dependent children, other children that may become dependent, or any other person that they are related to by blood or marriage?
Yes. Including an extremely distant cousin if documents can be produced showing that there is a relationship.
And under the current pension ordinance, is that employee required -- 275 COUNCIL OF THE WHOLE - BILL NO.'S 970745, 970749, 970750
Excuse me, Councilman. I notice that a couple of Councilmembers are looking for this amendment -- frantically looking for the amendment.
The memos were distributed around about the 1 o'clock break. There's a cover sheet on them that says from myself to the Council President and all Members, amendments to Bills No. 970745, 970749, and 970750, dated April 22, 1998, with a very brief explanation of the individual amendments. They could also be found attached to the City Solicitor's opinion that was distributed yesterday, and we can get additional copies.
I was ably assisted so that now, I am on the right page.
Councilwoman Clark, look at Bill No. 970745, turn to the very last page. And on that page, you will see, at the top of the page, a (d) in parentheses. That (d), by this amendment, would be changed to (e) because it was a typographical -- 276 COUNCIL OF THE WHOLE - BILL NO.'S 970745, 970749, 970750
Yeah. When the bill 7 was printed, there were two (d)'s, and one of them should have been an (e). It has now been called to your attention. Now the Councilman wishes to ask questions of the Pension Board representatives about this bill. But, in all fairness, he wanted to call to your attention that there was an amendment, no matter how insignificant, it's still an amendment.
Well, just to be technically correct, Mr. President, I didn't solely call it to the Members' attention to correct the misprinting of the (e) by way of the (d). The amendment is the underlying language that any other person is designated by the employee is the new (e).
Yes. And that's 277 COUNCIL OF THE WHOLE - BILL NO.'S 970745, 970749, 970750 what I want to talk about.
It is there. Mr. Hayllar, I think I was going to ask you, under the current pension ordinance, given the list of people that the public employee can give his or her pension to presently, is the public employee required to give the pension to any particular individual on the list of people that they can give the pension to today?
No. It has to be a blood relative or a relative by marriage.
They are not required to leave to any particular individual on the list.
And by this bill, the employee would have a larger universe of people that he or she could give their pension to that they earn. Is that correct? 278 COUNCIL OF THE WHOLE - BILL NO.'S 970745, 970749, 970750
And do you know presently or have any information or does Mr. Kidwell have information regarding the current or historical practice of who public employees generally designate as their survivor?
The majority of pension survivors are the spouse of the participant.
Do you have any information as to what the numbers may be on there?
No, we don't. Mr. Kidwell informs me, since he works with this on a day-to-day basis, that it's well within the 90 percent of all pensions, the spouse is the survivor.
So upwards of 90 percent of current public employees choose to leave their pension to their surviving spouse, even though they are not required to?
And do you have any reason to believe that that practice would 279 COUNCIL OF THE WHOLE - BILL NO.'S 970745, 970749, 970750 significantly change as a result of this particular amendment to the Code?
Okay, thank you very much. I don't have any more questions on the pension bill, Mr. President. If you'll just allow me to go -- thank you. The second proposed amendment, and I'd like to be able to ask questions in this area, has to do with Bill No. 970749, the real estate transfer tax bill. It has been proposed that the bill be amended to read: Delete the last sentence of Section 19-1405, No. 6, of The Philadelphia Code, as amended by Section 1 of the bill, and add a new last sentence to read as follows: For purposes of this paragraph, comma, the term, quote/unquote, life partner shall mean a member of a life partnership that is verified pursuant to Section 22 9-1106, No. 2. Miss Kammerdiener, in your testimony, is it also correct that in addition to the individuals that were listed as being exempt from 280 COUNCIL OF THE WHOLE - BILL NO.'S 970745, 970749, 970750 the real estate transfer tax, does that also include brother-in-law and sister-in-law?
Yes, it does. Right now the relationships by marriage are also included. I just didn't include them in the litany of the related-party transactions that are currently exempted from the tax.
So just again for the record, an individual can have a property transfer or a sale of property to his or her brother-in-law, and would that transaction be exempt from the real estate transfer tax?
And was it your testimony earlier that in any of those transactions, the Department of Revenue, nor the Department of Records requires or seeks any particular documentation as to the nature of the relationship between any of the parties who choose to sign the form and check the box, under penalty of perjury, that they are in fact eligible for the exemption of the real estate transfer tax based on those transactions. 281 COUNCIL OF THE WHOLE - BILL NO.'S 970745, 970749, 970750
The actual forms are filed with records, and -- so I don't have day-to-day oversight of that. But it's my understanding that they accept the information that is on the form. My staff does a review of forms and a spot-check audit and review. But, once again, they are looking primarily for other problems and other types of issues primarily related to the exclusions from tax that are not related-party transactions. There's some economic-development- related transactions or situations where there would be a -- two transfers.
And they're primarily commercial transactions as opposed to the residential.
And so under the proposed amendment, is it your understanding that if there were an application for an exemption by 282 COUNCIL OF THE WHOLE - BILL NO.'S 970745, 970749, 970750 life partners, they would, in fact, have to provide -- or there would actually be documentation available for either the Department of Records or the Department of Revenue to, in fact, check to verify the nature of the relationship between those two particular parties in that transaction.
If this proposed amendment were approved and the ordinance, as amended, were approved, that is correct. There would be more of a cross-check or an easier ability to check it because there would be on file 14 with the Human Relations Commission a life partnership certification, so there would be an easier cross-check. That doesn't mean that if we had a question about a related-party transaction now that we wouldn't or couldn't ask for that, but it's just not done on a case-by-case basis. And I would suspect that if someone signed the certification form, indicating that they had the life partnership certificate on file 24 with the Commission, we, in most cases, would not be going to the Commission case by case and 283 COUNCIL OF THE WHOLE - BILL NO.'S 970745, 970749, 970750 checking that. We would be accepting their statement.
I understand. But under these circumstances, you would virtually have almost instantaneous ability to verify what it is that these two individuals are claiming in terms of a tax exemption versus any of the other non-arm's-length transactions.
Correct. We would have an easier situation for verification.
Okay, all right. Thank you. Lastly, on Bill No. 970750, there are three proposed amendments, and I would just like to read them into the record. Amend Section 1 of the bill by inserting the following amendment to Section 19 9-11039, letter B of the Philadelphia Code immediately after the amendment to Section 9-1103, letter A, number 5. B. Exceptions. 'S 970745, 970749, 970750 seniority system or any bona fide employee benefit plan such as retirement, comma, pension, comma, or insurance plan, comma, which is not a subterfuge to evade the purposes of this Chapter, comma, except that no such employee benefit plan shall excuse the failure to hire any individual, comma, and no such seniority system or employee benefit plan shall require or permit the involuntary retirement of any individual because of the age of such individual, comma, and no such employee benefit plan shall excuse the failure to provide to the life partner of any employee any benefit that is provided to the dependent of any employee, period. The second proposed amendment to Bill 17 No. 970750 reads as follows: One, delete Section 9-1102, letter P, of The Philadelphia Code, as added by Section 1 of the bill, and add a new subsection, Section 9-1102 P to read as follows: Letter P. Life partner. A member of a life partnership that is verified pursuant to Section 9-11062, period. 'S 970745, 970749, 970750 the bill, add the following amendment to Section 3 9-1106 of the Philadelphia Code. Section 9-1106 of the Philadelphia Code. Section 9-1106, period. Administration and enforcement. Number 2, life partnerships, small letter a, definition. For the purposes of this chapter, comma, life partnership shall mean a long-term committed relationship between two unmarried individuals of the same gender who, small letter i, are at least years old and 12 competent to contract, semicolon, two small letter 13 i's, are not related to the other life partner by 14 blood in any way which would prohibit marriage in 15 the Commonwealth of Pennsylvania, semicolon. 16 Three small letter i, or the sole life partner of 17 the other person, semicolon. 18 Small Roman numeral iv, have not been a member of a different life partnership for the past 12 months, parentheses, unless the prior life partnership ended as a result of the death of the other life partner, close parentheses, semicolon. 'S 970745, 970749, 970750 semicolon Small Roman numeral vi, share at least one residence with the other life partner, semicolon. And small Roman numeral vii, agree under penalty of law to notify the Commission of any change in the status of the life partnership. Letter B, verification. No life partnership shall be recognized as such under this Chapter unless the members of the life partnership have verified the life partnership by, colon. Small 1, filing with the Commission a verification statement, comma, in the form and manner required the Commission, which states, comma, on penalty of perjury, comma, that the life partnership meets all of the provisions of Section 18 9-1106, parenthesis 2 parenthesis, small a, semicolon. And small double letter i, filing with the Commission proof that the life partnership has been interdependent for at least six months prior to the date the verification statement is filed, comma, such proof to include at least three of the following. 6 assignment of a durable power of attorney or health-care power of attorney, period. Letter C, termination. Either life partner may terminate the life partnership by filing a sworn termination statement with the Commission, comma, in the form and manner required by the Commission, comma, stating that the life partnership is to be terminated, period . 'S 970745, 970749, 970750 is signed by both life partners, period.
If it is not signed by both life-partners, comma, the termination statement shall become effective 60, parenthesis, 60, parenthesis, date from the date proof as filed with the Commission that a copy of the termination statement was served, comma, either personally by certified or registered mail, comma, on the other life partner, period. The last amendment, number 3 to bill 11 970750. Number 1, amend section 1 of the bill by inserting following new subsection, Section 13 9-1103, letter C of The Philadelphia Code immediately after the amendment to Section 9-1103 letter A, parentheses 5. Letter C. Employee benefit. Nothing in this section shall apply with respect to employee benefits offered by an employer whose employee benefits plan is governed by the Employee Retirement Income Security Act of 1974, parentheses, quotations, ERISA, parentheses, comma, including, comma, but not limited to, comma, employ benefits that are part of a, quote/unquote, employee benefits plan as defined by ERISA. 'S 970745, 970749, 970750 Miss Seyda, the City of Philadelphia currently has, by Executive Order, a domestic partnership program; is that correct?
And are you the administrator or a participant in the administration of that program?
How many public employees are covered by the current Executive Order?
And just again for the record, do you know how many employees signed up for those benefits?
Yes. Eight employees signed up for the benefits. Of that eight, six also applied for health benefits, medical benefits, under the Executive Order.
How is the matter of unmarried heterosexual single employees handled with regard to health benefits in the City of Philadelphia? 290 COUNCIL OF THE WHOLE - BILL NO.'S 970745, 970749, 970750
Under the City's health plans for heterosexual couples who are in a common-law marriage, they are eligible for coverage, and we do cover them.
They must file a notarized affidavit. They file it with us, we maintain it in our files, and we also provide it to the health-care provider.
So two unmarried heterosexual employees, if one is -- or if one unmarried heterosexual employee decides that they would like their cohabitating opposite-sex person to get health benefits, they come in, and both people agree to sign an affidavit. And at that point in time, the non-City employee cohabitating person is then granted health benefits; is that correct?
If they give us an affidavit and provide appropriate documentation that they are in a common-law marriage. We also advise them at that time that they will not be eligible to sign up another spouse unless they 291 COUNCIL OF THE WHOLE - BILL NO.'S 970745, 970749, 970750 provide with us documentation of a divorce. We recognize it as a formal marriage.
Is it your understanding that as a result of -- or should the bill be amended with the amendments, as read, that the extension of life-partner health benefits will only be for public employees?
That is my understanding based upon the City Solicitor's opinion that was provided to Council today -- or yesterday.
I asked Miss Seyda it was her understanding that if the bills are amended as the amendments were read that the provision of health benefits as a result of any changes in the Fair Practices Act would only require the City of Philadelphia to provide health benefits to life partners, as opposed to private employers.
I believe that was addressed in the City Solicitor's' opinion. And I believe that, in that opinion, she opined that the benefit would only apply to City employees. 292 COUNCIL OF THE WHOLE - BILL NO.'S 970745, 970749, 970750
And is that primarily because, one, if a company has a defined benefit program, they are covered by ERISA, and the City of Philadelphia has no ability to override the ERISA provisions of any private employer?
Councilman may I interrupt you on that point? 'Cause I think that there may be a misunderstanding. It is my understanding that the City of Philadelphia or local governments are preempted only insofar as the benefits are covered by ERISA. If an employee decided to give benefits -- that are above and beyond anything covered by ERISA, then under the ordinance, that employer would be required to make those benefits available to life partners.
That would be correct. In my answer, I was addressing the medical benefits that we had mentioned.
Right. So to the extent that the employer's plan covers those things that are covered by ERISA, then there's 293 COUNCIL OF THE WHOLE - BILL NO.'S 970745, 970749, 970750 nothing that this Council can do by ordinance to interfere with that because we're preempted. But if, for example, an employer had eight or nine other benefits that it gave, then those benefits would be required under this ordinance to life partners.
That -- I would defer to the City Solicitor to respond to that.
Mr. President, a point of order, if I can provide any clarification. The amendment, as drafted, with the assistance of the Law Department was drafted in order to cover the non-ERISA-provided benefits that a company may provide. And that is the reason for the language at the end of the third amendment, letter C, employee benefits that reads including but not limited to employee benefits that are not part of an employee benefits plan as defined by ERISA.
So it's the intent of this amendment to limit any requirement that those benefits be extended be to the ERISA-covered benefits?
I need you to 294 COUNCIL OF THE WHOLE - BILL NO.'S 970745, 970749, 970750 restate the question.
I just want to make sure I understand that it the intent of this amendment --
The purpose of the amendment is to, one, recognize that the City cannot impose anything on private companies that have an ERISA plan.
But it is further amended to acknowledge that we do not want to impact on non-ERISA-covered benefits.
Also that the company would not have to provide those either. So this amendment takes away the concern the private employer may have about providing economic benefits, whether covered by ERISA or not.
I think I understand. 295 COUNCIL OF THE WHOLE - BILL NO.'S 970745, 970749, 970750
Councilman, I'd just like to interrupt the hearing. I would like to have my staff notify the City Solicitor that we will need her here for questions after the break. Please proceed.
I think, Mr. President, for the individuals who are at the table -- the only other person I might potentially -- excuse me -- at least at the moment have additional questions for could be the City Solicitor, although any of my colleagues' questions might generate additional questions for these current witnesses. Thank you.
Thank you very much, Mr. President. I just want to go over one issue that Councilman Nutter has raised with the Personnel Director. And I want to make sure that the record's clear and that we have an expanded discussion about this issue. 296 COUNCIL OF THE WHOLE - BILL NO.'S 970745, 970749, 970750 Heterosexual -- non-married heterosexual couples who are City employees now, my understanding from your testimony and from what I have been able to gather, have basically three options in an effort to get their spouses or significant others medical benefits that are afforded to them by virtue of their bargaining under their contract as City employees. The first is going basically through a traditional marriage, where two individuals go into a synagogue, a church, or any other type of religious institution, with a license from the City and perform a marriage ceremony with a Justice-of-the-Peace or something like that. The second is simply getting a marriage certificate or a marriage license without ceremony. The third, as I understand your testimony, a simple declaration, without ceremony and without license, still affords the partner -- or now the spouse, the common-law spouse of the City employee full range of benefits that any other married couple would have. Is that accurate? 297 COUNCIL OF THE WHOLE - BILL NO.'S 970745, 970749, 970750
That is accurate. I mean, the state of Pennsylvania recognizes common-law marriage so that we do provide benefits for employees who give us an affidavit that they are in a common-law marriage. It is a legally-binding marriage.
Based on their affirmation and notarization of that affirmation.
Are there any other elements that need to be provided similar to what's outlined on the amendments that have been offered about joint ownership of property or joint ownership of automobile or bank accounts, life insurance, will, anything?
With the notarized statement, we also ask that they provide us with documentation of common ownership of property, ownership of motor vehicle, proof of joint bank accounts, credit, or joint tax returns.
They're all required as part of this notarized affidavit process of creating a marriage?
That's correct. 298 COUNCIL OF THE WHOLE - BILL NO.'S 970745, 970749, 970750
And the City recognizes that and provides health benefits, pension benefits, bereavement benefits, family leave benefits, based on their say so.
So what is being proposed in these bills as it relates to pension, transfer tax, and health benefits is no different than what exists today despite a marriage ceremony, despite a license, a simple declaration of marriage or spousal relationship, what we are suggesting through these bills today is that we do the same thing for same-sex couples? Is there any difference that you can see other than the fact that the two people involved in these bills happen to be both men or both women?
Okay. And during the course of the recognition of the common-law relationship -- and I say this knowing the answer -- we do not require any proof of sexual activity or procreation or the desire to have children or 299 COUNCIL OF THE WHOLE - BILL NO.'S 970745, 970749, 970750 anything else of that nature.
No, we do not. So my question rhetorically is, with the exception of the sex of the individuals involved, what is the difference? And the issue is for me -- and just learning this through the course of this process -- is that a marriage in a church, synagogue, a Justice-of-the-Peace, a formal public declaration to the world that we are married or a marriage license around the corner here on the fourth floor are two steps that people take to create a family or a marriage. We don't even require that now of heterosexual couples. We have less of a standard, basically a declaration of spousal relationship is enough to get these people all the benefits we're talking about here for same-sex couples?
That is -- that is correct. There is also the -- in order to terminate the relationship, a formal divorce is required to a common-law marriage.
And the reason that 300 COUNCIL OF THE WHOLE - BILL NO.'S 970745, 970749, 970750 we cannot require that in the same-sex relationship is that the State does not recognize the relationship, therefore, it would no recognize the divorce proceeding, and a near affidavit of this union is what would be would be required to end, to terminate that relationship.
Mr. Hayllar, on the pension benefits, is it fair to say that as the law stands now, only relatives would be eligible for survivorship benefits?
I understand that. There must be people who are relatives of some kind, and it can go far as cousins.
Absolutely. It can be very distant cousins, if you can prove the relationship. And it can be by marriage as well as by blood.
Assuming no one else 301 COUNCIL OF THE WHOLE - BILL NO.'S 970745, 970749, 970750 is -- do these relatives have a right to claim these benefits if they're not a named beneficiary?
So even if this -- even under this bill, if no one is named, the benefits are lost?
The Board would ultimately decide if there was a claim, but the Board would probably rule that there's no claim,, there's no dependent, no survivor.
So even if this bill 17 were passed, if there were no one named and there was the death of the employee, the benefit would be lost.
It would go to the estate of the employee, basically, or some portion of it.
On that point, I believe the -- going to the State or lost benefit only comes as a result of their being no one in the pension code in categories, I believe, A, B, 302 COUNCIL OF THE WHOLE - BILL NO.'S 970745, 970749, 970750 and C. In the survivorship section, there is a rank order.
In a death situation, where no one is named, the first person to get the benefit, I believe is the spouse. The second person to get the benefit is the child. And the third person, I believe, may be the parents. So if an employee dies and has not designated with the Board of Pension and Retirement who they want to get the benefit, there is a mechanism in a rank order for people to get benefits. I think the example that Mr. Hayllar laid out earlier a person that had --
So if you have no 23 relatives and if you haven't named anyone, even if this bill passes, it's still lost.
It goes to the estate of 303 COUNCIL OF THE WHOLE - BILL NO.'S 970745, 970749, 970750 the deceased. If you have not named anyone -- if this passes and you have not named anyone --
Listen, I'm just trying to understand this just like everybody else. We are advised that if -- upon the death of the employee, and there's no named person, right? There's no named person.
Then there's a rank order in the Code which gives the priority to the survivors as to who gets this survivor benefit, right?
You're saying that if there's no living relative among that list, then whatever it is goes into the estate.
Let me ask Mr. Kidwell to try 'cause I'm obviously not explaining to your satisfaction. Mr. Kidwell deals with this every day and might be able to be a little more clear on it.
Mr. Kidwell, it's 304 COUNCIL OF THE WHOLE - BILL NO.'S 970745, 970749, 970750 your shot at this.
I will try. The question from Councilman Nutter dealt with the death of an employee.
You'll understand, most of us don't even want to even think about this.
That's right. I understand, but. . . We are dealing here with the death of an employee, okay. And under current pension ordinance, there is a rank order if an employee does not have a named beneficiary or a valid beneficiary.
Or if the beneficiary predeceases the employee, and then you have nothing, right, so you go to the rank.
We go to the rank. And first in line is a spouse, next in line is a child or children, and third in line is the parent. If there is no automatic A, B, C, then there is a death benefit that is due. That benefit become payable to the employee's estate. And it's a lump-sum payment consisting of the 305 COUNCIL OF THE WHOLE - BILL NO.'S 970745, 970749, 970750 employee's pension contributions.
And then what happens after that if there are no relatives?
Well, I would hope that employee had a will; in which case, he may have designated in that will who is to receive the proceeds of his pension benefits.
Well, if he did that, he probably would have had a beneficiary. This is a guy who had nothing.
Right. It seems to me then you lose it. And I raise that because it was mentioned earlier that, oh, if you don't have, you know, if you don't have a relative, then here's this person that, you know, can't leave this benefit to anybody. But the person could leave a benefit to somebody under the current code. I mean, if you didn't have a relative and if you had a will and if you -- couldn't you just make provision through that will?
Yes. The difference 306 COUNCIL OF THE WHOLE - BILL NO.'S 970745, 970749, 970750 would be that if there was a named beneficiary, the potential exists that beneficiary could receive a lifetime annuity.
I understand that. All I'm saying to you is, it is unfair to say that if a person doesn't have -- and inaccurate, if a person doesn't have a relative, a distant cousin or somebody, that person is unable to make provision for his or her pension survivorship benefits, because it sounds to me like all he has to do, if he thinks about it, and he says, Oh, well, you know, I don't have a relative, he just puts him in the will. I mean, am I understanding this?
I don't think the Pension Board has any control over that.
I understand. But the person can just put a will -- just have a will and leave it to that person, that neighbor that took care of him or whatever. 307 COUNCIL OF THE WHOLE - BILL NO.'S 970745, 970749, 970750 You know, in other words, you don't have -- there is a way to solve this problem without changing the pension ordinance if somebody believes that it's a problem that's worth solving. That's all I'm trying to establish. Is there any way -- because I get troubled when somebody says, there would be no way that a person would be able to make any provision for his or her survivor benefits if we don't pass this bill because there's no provision. But there is a way. It might be a little more difficult, but there is a way.
A point of information. The gentleman testifying now had indicated that there may be a problem if the pension benefits are disbursed through the method of a will, that there may be a loss of annuity, is that right?
But lump sum is a substantially reduced amount versus the amount than -- 308 COUNCIL OF THE WHOLE - BILL NO.'S 970745, 970749, 970750
But what this pension change would do now is allow the designated individual, who is not a spouse and who is not a blood relative, the opportunity for that annuity.
That's right. And what is also does is, it allows the employee to cut out the family, all of the family. It allows him to cut off the family. (Applause.)
Under the current ordinance, the family can't be cut out. If there are living family members, they have to get the pension. But under the new ordinance, anybody in the entire world could get the pension, anybody.
Just like in a 309 COUNCIL OF THE WHOLE - BILL NO.'S 970745, 970749, 970750 will. The same as in a will, right?
Councilman, I'm just trying to understand this. Under the current law, you would not be able to give the pension, to a non-relative over the wife, to a non-relative over the children, to a non-relative over the brothers and sisters, to a non-relative over any of those family members. If the bill passes, an employee would be able to cut out the family, the brothers, the children, and dependent children, and give it to a non-family member. And that's what it does.
Council President, you can do that now. That doesn't change, you can do that now.
How can you do it now? You can't do it now. Maybe you can do it now. Tell me how can do it now.
You'll get a chance. I want to clarify this. You'll get an opportunity to clarify. I want to make the record clear. People will do what they want to do 310 COUNCIL OF THE WHOLE - BILL NO.'S 970745, 970749, 970750 they want to do.
Well, the one way that it is possible now is by naming your estate as your beneficiary, which is a valid nomination. So, even if you did have a family member and perhaps you didn't want to leave your pension to that family member, you could name your estate. Again, I want to make sure that we're clear, that we're talking here about the death of an employee, and we haven't reached about what happens at the time of the employee's retirement, which is a little bit different.
I understand that. All I -- I just want the record to be clear because there have -- people have gone to some length to suggest that there's no protection now for the spouse or the children or the family members, but that a spouse and a child, independent children could be cut out. That may be true, but they'd have to be cut out for other family members. If this bill is approved in its current form, then that wife, that those dependent children, those cousins and nieces and nephews and all of those family members, all 311 COUNCIL OF THE WHOLE - BILL NO.'S 970745, 970749, 970750 of them could be cut out completely, and some other non-family relatives, right -- in this case, we're thinking of a domestic partner or life partner, some other person could be put in there in place of those people.
All I want to know -- I just want to verify that that's the case. And I guess another follow-up question I'd like to ask is -- Mr. Hayllar told us of a situation of a person who couldn't -- who didn't have anybody to whom this employee could leave his or her survivor benefit.
We only know of it one time because it came before the board.
Yeah, because it came before the Board. But, clearly in the workforce of 30,000 people, people who do not have -- 312 COUNCIL OF THE WHOLE - BILL NO.'S 970745, 970749, 970750
Clearly, in a workforce of 30,000 people, there are people who do not have relatives by blood or marriage.
And that's true, and that's all fair. But there is a way -- I mean, all the Board has to do is tell them what they have to do and then they's know how to get around that.
But the distinction is that the value of the death benefit is less than the value of the pension of the survivor.
Well, doesn't that depend on how long the person lives?
Mr. Hayllar, let's not confuse this. If a person takes survivor benefits, survivor benefits, and I want payments, when that person dies, don't the payments end? 313 COUNCIL OF THE WHOLE - BILL NO.'S 970745, 970749, 970750
So that if I have an option of taking lump sum of 2, $300,000 or taking the payments, the payments, depending upon the age of the survivor, the age of the survivor, you might want that lump sum as opposed to the payment. So it is unfair for you to say that the survivor payments are worth more than the lump sum. Because you don't know that because none of us knows how long we're going to live. Is that fair?
We're missing a distinction. I'm going to ask Mr. Kidwell to --
Yeah, maybe we are 'cause this is tough stuff. I don't know.
No. I just want to make sure that we understand that the value of the lump sum would only consist of an employee's pension contributions, which would be approximately, let's say, percent to percent of his City earnings. The additional death benefit is his 314 COUNCIL OF THE WHOLE - BILL NO.'S 970745, 970749, 970750 three-year average earnings, so the total lump sum benefit available would be the employee's pension contributions, plus his three-year average earnings. That would be the total lump sum benefit payable.
Whereas a lifetime annunity, generally the lifetime annuity that would be available after approximately two years, it would well exceed the lump-sum benefit.