IRS Guidance On Same-Gender Marriage - What Actions Should Plan Sponsors Take Now

by Poyner Spruill LLP
Contact

Following the Supreme Court’s decision in United States v. Windsor, the IRS announced in Revenue Ruling 2013-17 that lawfully married same-sex couples would be treated as married for all Internal Revenue Code purposes.  On April 4, 2014, the IRS issued Notice 2014-19, addressing retirement plan amendments and optional retroactive application of the Windsor decision.  Retirement plan sponsors should evaluate what steps they need to take based on the Windsor decision and subsequent IRS guidance. 

Retirement Plan Operations

From June 26, 2013 through September 15, 2013 (the period between the Windsor decision and the issuance of the Revenue Ruling), it was acceptable for retirement plans to either recognize all same-sex spouses as married or recognize same-sex spouses as married only for participants who were domiciled in a state that treated same-sex spouses as married.
Effective September 16, 2013, retirement plans must recognize a same-sex spouse if the couple is lawfully married under the laws of one of the 50 states, the District of Columbia, a U.S. territory, or a foreign jurisdiction, even if the couple is living in a state that does not recognize same-sex marriage.
For periods prior to June 26, 2013, retirement plans may, but do not have to, recognize same-sex spouses.  Applying the rulings to a date before June 26, 2013 for all retirement plan purposes may create administrative difficulties and unintended consequences (such as changing the results of ownership attribution, which may affect the plan’s non-discrimination testing).  As a result, plan sponsors should carefully consider which plan provisions should be applied retroactively.  Additionally, the decision to implement the rulings retroactively is subject to all of the normal qualification requirements, such as non-discrimination testing under §401(a)(4).
Caution:  These dates were issued by the IRS for Internal Revenue Code purposes.  They do not remove a same-sex spouse’s right to make a claim for benefits for periods prior to these dates.  

Retirement Plan Amendments May Be Required as Early as December 31, 2014

Plan sponsors must ensure that the retirement plan’s terms comply with the Windsor decision and accurately reflect the plan’s operation.  If the plan’s provisions do not conflict with those rulings (because, for example, “spouse” is defined as a spouse under the terms of the Internal Revenue Code or the documents do not define the term “spouse”), then the plan may not have to be amended.  If, however, the plan has provisions that are inconsistent with Windsor or Revenue Ruling 2013-17, then the plan must be amended.  For defined benefit plans, be aware that an amendment to reflect these rulings effective as of June 26, 2013, is not treated as an amendment to which the funding-based benefit restrictions under §436(c) apply, but earlier application of the ruling is subject to the funding-based benefit restrictions under §436(c). 
Any needed plan amendment must be adopted by December 31, 2014, or, if later, the plan’s normal remedial amendment period.  

Participant Communication and Administrative Forms

Plan sponsors should also review their communication materials and administrative forms to make sure no changes are needed as a result of Windsor.  Particular attention should be paid to beneficiary designation forms and instructions, as well as to any form requiring spousal consent, such as distribution forms and certain plan loan forms.  Some plan sponsors are reaching out to employees to let them know that beneficiary designations that name someone other than the same-sex spouse as beneficiary are not effective unless the same-sex spouse consented to the beneficiary designation.

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

© Poyner Spruill LLP | Attorney Advertising

Written by:

Poyner Spruill LLP
Contact
more
less

Poyner Spruill LLP on:

Readers' Choice 2017
Reporters on Deadline

"My best business intelligence, in one easy email…"

Your first step to building a free, personalized, morning email brief covering pertinent authors and topics on JD Supra:
Sign up using*

Already signed up? Log in here

*By using the service, you signify your acceptance of JD Supra's Privacy Policy.
Privacy Policy (Updated: October 8, 2015):
hide

JD Supra provides users with access to its legal industry publishing services (the "Service") through its website (the "Website") as well as through other sources. Our policies with regard to data collection and use of personal information of users of the Service, regardless of the manner in which users access the Service, and visitors to the Website are set forth in this statement ("Policy"). By using the Service, you signify your acceptance of this Policy.

Information Collection and Use by JD Supra

JD Supra collects users' names, companies, titles, e-mail address and industry. JD Supra also tracks the pages that users visit, logs IP addresses and aggregates non-personally identifiable user data and browser type. This data is gathered using cookies and other technologies.

The information and data collected is used to authenticate users and to send notifications relating to the Service, including email alerts to which users have subscribed; to manage the Service and Website, to improve the Service and to customize the user's experience. This information is also provided to the authors of the content to give them insight into their readership and help them to improve their content, so that it is most useful for our users.

JD Supra does not sell, rent or otherwise provide your details to third parties, other than to the authors of the content on JD Supra.

If you prefer not to enable cookies, you may change your browser settings to disable cookies; however, please note that rejecting cookies while visiting the Website may result in certain parts of the Website not operating correctly or as efficiently as if cookies were allowed.

Email Choice/Opt-out

Users who opt in to receive emails may choose to no longer receive e-mail updates and newsletters by selecting the "opt-out of future email" option in the email they receive from JD Supra or in their JD Supra account management screen.

Security

JD Supra takes reasonable precautions to insure that user information is kept private. We restrict access to user information to those individuals who reasonably need access to perform their job functions, such as our third party email service, customer service personnel and technical staff. However, please note that no method of transmitting or storing data is completely secure and we cannot guarantee the security of user information. Unauthorized entry or use, hardware or software failure, and other factors may compromise the security of user information at any time.

If you have reason to believe that your interaction with us is no longer secure, you must immediately notify us of the problem by contacting us at info@jdsupra.com. In the unlikely event that we believe that the security of your user information in our possession or control may have been compromised, we may seek to notify you of that development and, if so, will endeavor to do so as promptly as practicable under the circumstances.

Sharing and Disclosure of Information JD Supra Collects

Except as otherwise described in this privacy statement, JD Supra will not disclose personal information to any third party unless we believe that disclosure is necessary to: (1) comply with applicable laws; (2) respond to governmental inquiries or requests; (3) comply with valid legal process; (4) protect the rights, privacy, safety or property of JD Supra, users of the Service, Website visitors or the public; (5) permit us to pursue available remedies or limit the damages that we may sustain; and (6) enforce our Terms & Conditions of Use.

In the event there is a change in the corporate structure of JD Supra such as, but not limited to, merger, consolidation, sale, liquidation or transfer of substantial assets, JD Supra may, in its sole discretion, transfer, sell or assign information collected on and through the Service to one or more affiliated or unaffiliated third parties.

Links to Other Websites

This Website and the Service may contain links to other websites. The operator of such other websites may collect information about you, including through cookies or other technologies. If you are using the Service through the Website and link to another site, you will leave the Website and this Policy will not apply to your use of and activity on those other sites. We encourage you to read the legal notices posted on those sites, including their privacy policies. We shall have no responsibility or liability for your visitation to, and the data collection and use practices of, such other sites. This Policy applies solely to the information collected in connection with your use of this Website and does not apply to any practices conducted offline or in connection with any other websites.

Changes in Our Privacy Policy

We reserve the right to change this Policy at any time. Please refer to the date at the top of this page to determine when this Policy was last revised. Any changes to our privacy policy will become effective upon posting of the revised policy on the Website. By continuing to use the Service or Website following such changes, you will be deemed to have agreed to such changes. If you do not agree with the terms of this Policy, as it may be amended from time to time, in whole or part, please do not continue using the Service or the Website.

Contacting JD Supra

If you have any questions about this privacy statement, the practices of this site, your dealings with this Web site, or if you would like to change any of the information you have provided to us, please contact us at: info@jdsupra.com.

- hide
*With LinkedIn, you don't need to create a separate login to manage your free JD Supra account, and we can make suggestions based on your needs and interests. We will not post anything on LinkedIn in your name. Or, sign up using your email address.