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Committee advances ordinance to let survivor annuities be paid into special‑needs trusts
Summary
The committee voted to forward an ordinance that would allow retirement system members to designate special‑needs trusts as beneficiaries for survivor annuities, aiming to protect recipients' eligibility for needs‑based benefits; staff said implementation would place compliance responsibilities on members and trustees.
The Rules Committee on Nov. 28 advanced to the full Board an ordinance to amend the administrative code so members of the city's retirement system may designate special‑needs trusts as retirement beneficiaries in certain circumstances.
Sponsor Supervisor Safaie told the committee the change would allow survivor annuities to be paid into a special‑needs or supplemental needs trust to avoid causing recipients to lose eligibility for needs‑based public benefits such as Social Security Income (SSI), Medi‑Cal and housing supports. "Allowing for survivor annuity to be placed in a special needs trust would solve this problem," he said.
Retirement system staff explained the mechanics: when a member retires they could designate a trust as the beneficiary; as drafted, the member and the trustee would bear the burden of ensuring the trust meets legal requirements and of notifying the system when the beneficiary dies so payments can be stopped and any overpayments recovered. Staff said the population likely eligible for this option would be small and that the approach should impose minimal administrative cost on the retirement system because most responsibilities rest with the member and trustee.
Supervisor Safaie also noted the administrative code has not been updated since 1983 and that the ordinance would modernize gendered language in addition to authorizing special‑needs trusts. He thanked the beneficiary advocate Annette Overbey and groups including the National Alliance on Mental Illness for their support.
Chair Aaron Peskin moved to forward the ordinance to the full board with a positive recommendation. The clerk called the roll and the motion passed without objection.
