Plan sponsors need to review retirement plan documents and operations to determine whether changes are needed in response to last year's Supreme Court decision in U.S. v. Windsor and subsequent IRS guidance. Under most circumstances, any needed plan amendments should be adopted no later than December 31, 2014.

In Windsor, the Court struck down Section 3 of the Defense of Marriage Act (DOMA), which denied federal recognition to same-sex marriages. As a result, plan sponsors were required to change their plan administrative practices to provide same-sex spouses with the rights required by federal law. For example, same-sex spouses of participants in profit-sharing, 401(k) and other defined contribution plans must be treated as the default beneficiary, unless they consent to the participant's designation of another beneficiary. Refer to our prior client alert for a list of spousal rights under qualified plans that must be provided to same-sex spouses.

Following the Windsor decision, the IRS has released guidance providing additional direction to plan sponsors. First, the IRS issued Revenue Ruling 2013-17, which provides that couples will be treated as married for federal tax purposes if their marriage is legal where it is performed, regardless of where the couple actually resides. Next, the IRS issued Notice 2014-19, which provides guidance on plan document amendments needed to bring plans into compliance with Windsor.

Plan sponsors will need to review plan documents and plan operations to determine what actions to take in response to the IRS guidance.

Any plan document that defines a marital relationship in a manner inconsistent with the Windsor decision (such as a reference to opposite-sex spouses, or by reference to DOMA) must be amended. Even where an amendment isn't required, the IRS points out that a clarifying amendment may be useful for purposes of plan administration.

The IRS recognizes that many plan sponsors did not know which marriages were required to be recognized in the weeks immediately following the Windsor decision. Under the new IRS guidance, a "state of residence" standard may be used between the date of the Windsor decision (June 26, 2013) and the effective date of Revenue Ruling 2013-17 (September 16, 2013). Plan sponsors should review plan operations to confirm operational compliance, and to determine if any special effective date provisions are needed.

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