Over the past several months, the IRS has worked to clarify qualified retirement plans’ obligations in the wake of the June 26, 2013 ruling in State v. Windsor, which struck down the federal Defense of Marriage Act. The landscape continues to evolve, but generally speaking, employers need to make sure the plans they sponsor are compliant with Windsor in both form and practice.
What this means, practically, is that plans need to be written so that terms like “marriage” and “spouse” are not restrictive in their definitions – the former must include all legal marriages, and the latter must include same-sex spouses, where appropriate. In addition to making sure that the documents themselves comply with the law, plan sponsors and administrators should take great care to ensure that their procedures – e.g., handling the distribution of spousal benefits upon a participant’s death – are in line with Windsor as well.
This area is not yet cut-and-dry, and there are exceptions to the brief generalities described above, but employers should waste no time or effort in verifying their plans’ compliance with the developing laws and regulations. In many cases, seeking outside expert assistance may prove worthwhile.
– J.D. Stuart