2008-04-23 14:47:22 -

- TIAA-CREF today announced its support for H.R. 1820, Tax Equity for Health Plan Beneficiaries Act of 2007, introduced by Congressman Jim McDermott (D-WA) in the House and S. 1556, Tax Equity for Domestic Partner and Health Plan Beneficiaries Act of 2007, introduced by Senator Gordon Smith (R-OR) in the Senate.

The bill would eliminate the inequities in federal

tax law by excluding the value of domestic partner health coverage from the taxable income of the employee and from wages for purposes of payroll tax obligations. The bill would correct these inequities for domestic partners and others who qualify as plan beneficiaries under the employer plan but do not meet the tax code definition of spouse or dependent.

In particular, it would permit a Voluntary Employees' Beneficiary Association (also known as a VEBA) to provide full benefits to domestic partners or other non-spouse, non-dependent beneficiaries without endangering its tax-exempt status.

A number of colleges and universities currently provide benefits to domestic partners. Many of these institutions are also considering participating in a tax-exempt VEBA or other similar trusts, as a way to help employees save additional resources to offset the rising cost of health care in retirement.

"We support those institutions that wish to help cover the retirement health care needs of employees and their dependents," said Nancy Heller, Senior Managing Director and Head of Institutional Relationships. "We look forward to working as part of the coalition to support passage of legislation that would enable VEBAs to provide full benefits to domestic partners."

"Every American deserves to be treated with dignity, respect and equal treatment under the law, but that is not happening in the workplace today, because of a glaring inequity that treats a married couple differently than domestic partners when it comes to an employer's contribution for a health care premium," Rep. Jim McDermott said. "This is absolutely wrong and I intend to correct this through the Tax Equity for Health Plan Beneficiaries Act."

TIAA-CREF is the leading retirement system for people who work in the academic, research, medical and cultural fields with more than $419 billion in combined assets under management. The company serves 3.4 million active and retired employees of more than 15,000 institutions.

TIAA-CREF will advocate for the passage of this legislation. TIAA-CREF is a member of the Business Coalition for Benefits Tax Equity, a group of employers and business trade associations, who also support this legislation.

About TIAA-CREF

TIAA-CREF (www.tiaa-cref.org) is a national financial services organization and the leading provider of retirement services in the academic, research, medical and cultural fields with more than $419 billion in combined assets under management (3/31/08).

The tax information herein is not intended to be used and cannot be used by any taxpayer for the purpose of avoiding tax penalties. It was written to support our endorsement of the legislation. Taxpayers should seek advice based on their own particular circumstances from an independent tax advisor.

TIAA-CREF Individual & Institutional Services, LLC and Teachers Personal Investors Services, Inc., members FINRA, distribute securities products. Annuity products are issued by TIAA (Teachers Insurance and Annuity Association), New York, NY.

(C)2008 Teachers Insurance and Annuity Association-College Retirement Equities Fund, (TIAA-CREF), New York, NY 10017.

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TIAA-CREF
Media:
Chad Peterson, 212-916-4808
cpeterson@tiaa-cref.org