Not a Member?  Become One Today!

IRS Issues Guidance on Retirement Plans and Same-Sex Spouses
Notice applies to spousal consent, survivor benefits, QDROs and other plan functions

By Brian M. Pinheiro, Diane A. Thompson, and Jonathan M. Calpas, © Ballard Spahr LLP  4/9/2014

The Internal Revenue Service issued Notice 2014-19 on April 4, 2014, setting forth the rules for recognition of same-sex spouses in retirement plan administration. Such recognition is required under the U.S. Supreme Court's decision in U.S. vs. Windsor, which struck down Section 3 of the Defense of Marriage Act.

Most significantly, the guidance does not require plan sponsors to retroactively apply same-sex spousal recognition standards prior to June 26, 2013 (the date of the Windsor decision), but does allow for optional retroactive application of such standards prior to that date.

Notice 2014-19 requires qualified retirement plans to recognize the same-sex spouse of a participant as of June 26, 2013, for purposes of:

  • Providing survivor benefits.
  • Obtaining spousal consent.
  • Making required minimum distributions.
  • Accepting qualified domestic relations orders (QDROs).
  • Issuing hardship withdrawals.
  • Carrying out other retirement plan administrative functions.

Notice 2014-19 also confirms that retirement plan administrators must use the "state of commitment" standard in determining same-sex spouses as of Sept. 16, 2013. Qualified retirement plans that choose not to recognize same-sex spouses before June 26, 2013 will not be subject to plan disqualification or face penalties as a result of this decision.

Qualified retirement plans whose terms are inconsistent with U.S. v. Windsor and the state of commitment standard must be amended to comply with the ruling and standard. Generally speaking, non-governmental single employer plans have until Dec. 31, 2014 to adopt an amendment.

In the case of governmental plans, an amendment must be adopted no later than the close of the first regular legislative session of the legislative body with amendment authority that ends after Dec. 31, 2014. A required plan amendment can be adopted regardless of whether the plan would otherwise be subject to limitations set forth under Section 436 of the Internal Revenue Code (which deals with funding-based limits on plan benefits).

Brian M. Pinheiro, Diane A. Thompson and Jonathan M. Calpas are attorneys in Ballard Spahr’s employee benefits and executive compensation group. They regularly advise employers on providing benefits to same-sex couples and on all aspects of qualified retirement plan compliance. © 2014 by Ballard Spahr LLP. All rights reserved. Reposted with permission.

IRS Resources:

Related External Articles:

Related SHRM Articles:

Quick Links:

Compensation & Benefits e-Newsletter:
To subscribe to SHRM's Compensation & Benefits
e-newsletter, click below.
Sign Up Now