Michael A. Webb, vice president, Retirement Practice, Cammack Retirement Group, answers:
When the decision addressing the Defense of Marriage Act was released last year, the issue of the impact of decision on non-ERISA 403(b) plans was detailed in an Ask the Experts Q&A (see “Ask the Experts: The DOMA Ruling and non-ERISA Plans”).
Though the guidance from that Q&A remains valid, there have been two important developments since that time:
1) At the time of the article, it was unclear whether a legal same-sex marriage for retirement plan purposes was based on state of celebration or state of domicile. It has since been clarified that the legality is based on state of celebration. Thus, same-gender couples who marry in a state where same-gender marriages are legal but currently live in a state where same-gender marriages are not legal, are still considered to be married for retirement plan purposes. The same is true for same-gender couples who marry in foreign jurisdictions where such marriages are legal and return to the U.S., regardless of state of domicile.
2) The IRS has issued Notice 2014-19 addressing retirement plan amendments in this regard (see “Not All Retirement Plans Must Be Amended for Windsor”). Many retirement plans will not need to be amended, since their documents simply state that spouse means legal spouse as defined in the Code. However, if they use a definition that uses the Defense of Marriage Act (DOMA) in any way, or defines spouse as opposite-gender, then a change is necessary. However, the guidance only applies to plans that need to file plan documents with the IRS on a regular basis under a remedial amendment period (e.g. qualified plans such as 401(a)/(k) plans). 403(b) plans do not fall into this category. However, at some point 403(b)s will have a remedial amendment period as well, and best practice would be to update any plan document language to reflect current law, whether or not the 403(b) plan is subject to ERISA. The timing, however, is presumably not as urgent as it would be for 401(a)/(k) plans.
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NOTE: This feature is to provide general information only, does not constitute legal advice, and cannot be used or substituted for legal or tax advice.
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