The HR Legal News Blog

IRS Issues Guidance on Application of U.S. v. Windsor to Qualified Plans

The IRS has provided guidance on the application of the Supreme Court’s decision in United States v. Windsor, 570 U.S. ___, 133 S.Ct. 2675 (2013) to qualified retirement plans.

In June 2013, the Windsor decision struck down the provision of the Defense of Marriage Act that defined “marriage” as “a legal union between one man and one woman as husband and wife” and limited the definition of “spouse” to “a person of the opposite sex who is a husband or a wife.”  Following this decision, the IRS issued Rev. Rul. 2013-17 , which states that, for purposes of federal tax law, the term “marriage” includes a marriage of same-sex individuals that was valid in the state in which the marriage occurred even if the married couple lives in a state that does not recognize same-sex marriages.

In Notice 2014-19, the IRS specifically addresses the application of the Windsor decision to retirement plans qualified under Section 401(a) of the Internal Revenue Code.  Key points include the following:

  • Any retirement plan qualification rule that applies because a participant is married must be applied to same-sex spouses.  These include, for example, the rules concerning qualified joint and survivor annuities (QJSA), qualified pre-retirement survivor annuities (QPSA) and qualified domestic relations orders (QDROs).
  • Qualified retirement plans that contain terms that are inconsistent with the Windsor decision (such as a definition of “marriage” that refers to or is based on Section 3 of DOMA or specifically excludes same-sex spouses) must be amended to reflect the outcome of Windsor and the guidance in Rev. Rul. 2013-17.  The deadline to adopt the amendment is the later of (i) the otherwise applicable deadline under Section 5.05 of Rev. Proc. 2007-44 or (ii) December 31, 2014.
  • An amendment will generally not be necessary if the terms of a qualified retirement plan do not distinguish between the treatment of participants in same-sex marriages and those in opposite-sex marriages.

 

Plan sponsors should carefully review the terms of their qualified plans to determine whether an amendment is required.