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IRS Issues Post-Windsor Guidance for Qualified Plans

On April 4, 2014, the Internal Revenue Service (IRS) issued Notice 2014-19 as a follow-up to Revenue Ruling 2013-17 regarding the Supreme Court’s decision in the U.S. v. Windsor Defense of Marriage Act (DOMA) case. While Revenue Ruling 2013-17 gave general tax-status guidance resulting from the Windsor decision, Notice 2014-19 specifically focuses on Section 401(a) qualified plans, including 401(k) plans.

The notice generally provides for the following:

• General Effective Date. Participants (and their spouses) who are in same-gender marriages generally must be treated as married for all purposes under a qualified retirement plan (such as a 401(k) plan) as of June 26, 2013, the date of the Windsor decision.

• Optional Effective Date. A qualified plan sponsor may elect to recognize only same-gender marriages of participants as of June 26, 2013 if they live in a state that recognizes same-gender marriages. For participants who live in states that do not recognize same-gender marriages, the sponsor is permitted to recognize them as of September 16, 2013, the date Revenue Ruling 2013-17 was issued. A plan amendment is required to reflect the use of this optional effective date.

• Optional Retroactive Effective Date. A qualified retirement plan sponsor may elect to recognize same-gender marriages prior to June 26, 2013 for some or all purposes under the plan—as long as all qualification requirements of the Internal Revenue Code are satisfied. A plan amendment is required to reflect the use of the optional retroactive effective date.

• Amendment of Plan Terms. If a plan defines “spouse” in a manner consistent with the Windsor decision (or does not define the term at all), the plan does not need to be amended as long as the plan has been properly administered. However, if the plan’s definition of spouse (or other terms) is not consistent with Windsor, it must be amended.

• Timing of Plan Amendments. In general, amendments to qualified retirement plans are due by December 31, 2014.

Notice 2014-19 does not include plans that are not qualified under Section 401(a), such as 403(b) and governmental 457(b) plans. However, these plans must generally follow the Code’s rules regarding the definition of spouse after Windsor. Sponsors of such plans should consider the guidance in Notice 2014-19 when determining whether to amend their plans.