February 16, 2012
Washington State Is Latest Jurisdiction to License Same-Gender Marriages
On February 13, 2012, a law authorizing same-gender marriage was signed into law in Washington state.1 Washington joins seven other U.S. jurisdictions that currently license same-gender marriages. However, because under the federal Defense of Marriage Act (DOMA)2 federal tax benefits for spouses are limited to spouses of the opposite sex, legal recognition of same-gender marriage by the states can raise complicated issues for both defined benefit (DB) and defined contribution (DC) plans that are controlled primarily by federal law.
This Compliance Alert notes which jurisdictions license same-gender marriages and provides a brief introduction to the implications for retirement plan sponsors. Further information, including an outline of action steps for plan sponsors to consider, is provided in a supplement that can be accessed through a link near the end of this Compliance Alert.
Jurisdictions that License Same-Gender Marriages
Massachusetts was the first state to license same-gender marriages.3 Other New England states followed Massachusetts’ lead: Connecticut,4 Vermont5 and New Hampshire.6 (In 2009, Maine passed a law allowing same-gender marriage that was repealed by Maine voters later that year.) In 2011, a law authorizing same-gender marriage took effect in New York State.7 Iowa licenses same-gender marriages in response to a court decision from that state’s highest court.8 The District of Columbia started to license same-gender marriages in 2010.9
Complexity in California
California licensed same-gender marriages between June and November 2008, but stopped doing so in response to the November 2008 voter-approved ban on same-gender marriages. The state’s highest court upheld that ban in May 2009, but concluded that the approximately 18,000 marriages that had taken place remained valid.10 On February 7, 2012, a federal appeals court ruled that the voter-approved ban was unconstitutional, but the ban’s proponents intend to appeal. Consequently, California is not likely to resume issuing marriage licenses to same-gender partners any time soon.11
Other Approaches to Recognizing
Licensing same-gender marriages is just one way that states have acted to recognize these relationships. Some states have licensed civil unions and created statewide domestic partner registries as vehicles for formalizing same-gender relationships, while others have announced they will officially recognize same-gender marriages from other states. These approaches, coupled with the recent developments noted above on same-gender marriage, contribute to an ever-changing landscape of approaches to relationship recognition.
Implications for Retirement Plan Trustees
As more states license same-gender marriages and as married couples from these states move around the country, it becomes increasingly likely that trustees will face questions from plan participants about benefits for their same-gender spouses. Trustees might wish to review their plan documents and communications to ensure that those documents and communications accurately reflect the plan’s intentions with respect to same-gender spouse benefits and the legal requirements applicable to those benefits. This is particularly true for plans that previously provided benefits for same-gender domestic partners or civil-union partners that might now wish to add benefits for same gender spouses and/or to clarify the benefits that are available to each type of spouse or partner.
Adding complexity to these issues is DOMA, the federal law noted above, which requires that for purposes of all federal laws, including the Employee Retirement Income Security Act (ERISA) and the Internal Revenue Code (IRC), “marriage” means exclusively a legal union between one man and one woman as husband and wife (“DOMA marriage”), and “spouse” means exclusively a person of the opposite sex who is a husband or wife (“DOMA spouse”). Because of DOMA, therefore, provisions of the IRC requiring certain benefits for spouses or providing special tax treatment with respect to distributions to spouses would not apply to same-gender spouses, who instead would be treated as non-spouse beneficiaries.
For assistance in considering these issues, trustees might wish to consult The Segal Company’s Same-Gender Marriage: Action Steps for Pension Plan Trustees.
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As with all issues involving the interpretation or application of laws and regulations, trustees should rely on fund counsel for authoritative advice on the interpretation and application of state marriage laws. Segal can be retained to work with trustees as they sort through the complex issues they will confront as they consider extending benefits to same-gender spouses.
- A press release about the signing is available on Governor Chris Gregiore’s website. The law based on Senate Bill 6239 is available on the Washington State Legislature’s website. (Return to the Compliance Alert.)
- DOMA (Public Law 104-199, September 21, 1996) also provides that a State need not recognize a marriage performed in accordance with another State’s law if that marriage does not comply with DOMA. There are numerous current lawsuits contesting DOMA’s constitutionality on various grounds and U.S. Attorney General Eric Holder has stated that the U.S. Justice Department will no longer defend the constitutionality of DOMA. However, at this time, DOMA remains the law of the land and applies to pension plans through both the Internal Revenue Code and the Employee Retirement Income Security Act. (Return to the Compliance Alert.)
- Massachusetts’ recognition of same-gender marriage is the result of an November 18, 2003 decision by the Massachusetts Supreme Judicial Court, which is available on the Massachusetts Trial Court Law Libraries website. For a summary, see Segal’s January 2004 Bulletin, “Benefit Implications of the Massachusetts Court Ruling Allowing Same-Gender Marriage.” (Return to the Compliance Alert.)
- Connecticut’s recognition of same-gender marriage is the result of an October 28, 2008 decision by the Connecticut Supreme Court, which is available on the State of Connecticut Judicial Branch website. For a summary, see Segal’s January 2009 Bulletin, “Connecticut Licenses Same-Gender Marriages.” (Return to the Compliance Alert.)
- Vermont’s law, which became law by legislative override of the governor’s veto, is available on the state’s website. (Return to the Compliance Alert.)
- On June 3, 2009, three related bills were signed into law in New Hampshire: an Act relative to civil marriage and civil unions, an Act affirming religious freedom protections with regard to marriage and prohibiting the establishment of civil unions on or after January 1, 2010, and an Act relative to reimbursement of mileage for judges and marital masters and relative to civil marriage and civil unions. (Return to the Compliance Alert.)
- The law, the Marriage Equality Act, which pass passed on June 24, 2011 and signed on July 24, 2011, is available on Governor Andrew Cuomo’s website. (Return to the Compliance Alert.)
- The court’s decision is available on the Iowa Judicial Branch website. (Return to the Compliance Alert.)
- The law, which was signed on December 18, 2009, is available on the Council of the District of Columbia website. (Return to the Compliance Alert.)
- A press release about the California Supreme Court’s decision is available on the Court’s website. (Return to the Compliance Alert.)
- The 9th Circuit decision is available on the Court’s website. (Return to the Compliance Alert.)
Compliance Alert is The Segal Company's periodic electronic newsletter summarizing important developments affecting benefit plan compliance. Compliance Alert is for informational purposes only is for informational purposes only and should not be construed as legal advice. It is not intended to provide guidance on current laws or pending legislation. On all issues involving the interpretation or application of laws and regulations, plan sponsors should rely on their attorneys for legal advice.