Retirement Plans in Same-Sex Marriage


Some retirement benefits only apply to spouses in a legal marriage. Since legal marriages are not recognized in every jurisdiction and the Windsor ruling granted federal recognition of same-sex marriages, how should retirement benefits be handled?

The Internal Revenue Service released new guidelines in Notice 2014-19 for administrators of qualified retirement plans to clarify how Windsor has affected accounts.
The Windsor decision was made on June 26, 2013, but not all retirement plan administrators must apply the ruling on or after that date. Here are the timelines required:

  • Select retirement plan administrators must recognize same-sex marriages on and after June 26, 2013. The administrators who are not required to satisfy this date are those of account owners who reside in a state that does not recognize same-sex marriage.
  • The IRS requires all administrators of retirement plans to recognize same-sex spouses, regardless of the jurisdiction they are domiciled, as of September 16, 2013.
  • Some plans may require amendments to include an updated definition of marriage and reflect Windsor. These changes are required by December 31, 2014.
  • Retirement plan administrators also have the option to retroactively recognize same-sex marriages to dates prior to June 26, 2013. If they choose to do this the IRS included a warning that a change like this could have adverse consequences; the IRS is also only permitting retroactive amendments if they do not affect a plan’s qualified status.
Married same-sex couples should review benefits with their attorney and financial advisor to ensure spouses are recognized appropriately. With the many changes occurring on the federal level, review our posts about tax tips for married same-sex couples in North Carolina and estate planning for same-sex couples.
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