Qualified retirement plans and same-sex marriages

Subsequent to the June 26, 2013 U.S. Supreme Court’s Windsor ruling, in which the Court held that same-sex marriages must be recognized under federal tax laws, the IRS and Department of Labor (“DOL”), respectively issued guidance concerning the impact of Windsor on qualified retirement plans. (The initial guidance can be found at DOL Technical Release 2013-04 here and IRS Notice 2013-17 here.) This guidance explained the effects of the Windsor ruling on qualified retirement plans, specifically that these plans must begin acknowledging same-sex marriages, as of the date of the Windsor ruling, June 26, 2013, and meant that many qualified retirement plans would need to be amended. However, neither the IRS ruling nor the DOL guidance provided much direction on how plan administrators should implement these changes. The IRS recently issued Notices 2014-19 and 2014-37, along with related FAQs, to provide clarification on this and other issues, which can be read in full here.

Within its recent Notice, the IRS clarified that not all qualified retirement plans would be required to make changes. In general, only those plans that defined “spouse” by reference to DOMA or otherwise specified a spouse as an individual of the opposite sex must be amended. Nevertheless, sponsors of otherwise compliant plans may still decide to further clarify within their plans that same-sex marriages will be recognized, and even if no plan amendment is required, the plan must still be administered consistent with the guidance issued by the IRS. (Also note that no plan is required to apply Windsor prior to June 26, 2013 and to apply the ruling before this date can cause its own administrative problems.)

For those plans for which amendments must be made, the amended language must be adopted by December 31, 2014. A later amendment date may be applicable to governmental plans, and no deadline has yet been set for amending 403(b) plans.

Regardless of whether a retirement plan needs to be amended or not, plan sponsors and administrators would be wise to provide information to plan participants concerning their treatment of same-sex married spouses. Taking this step will reduce the possibility of not complying with Windsor or the issued guidance.

About Don Meyer

I am a partner of Bose McKinney & Evans LLP, where I'm a member of the Business Services, Tax, Employee Benefits and Executive Compensation, and Health Groups. I work with public and private companies, large and small nonprofit organizations, public schools and colleges, ESOPs and other ERISA plans, and health care providers, as well as executives and sole proprietors. I provide legal knowledge and advice to my clients with respect to their assorted business, tax and benefits needs, while also serving in a general counsel capacity for various clients. When necessary, I represent clients before the Internal Revenue Service, the Department of Labor, the Indiana Department of Revenue and other government agencies.
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