(b)lines Ask the Experts – The DOMA Ruling and non-ERISA Plans

July 16, 2013 (PLANSPONSOR (b)lines) - "I read with great interest your recent Ask the Experts column regarding the Defense of Marriage Act (DOMA) ruling.

“I noticed that the response was directed to Employee Retirement Income Security Act (ERISA) plan sponsors.  We maintain a church plan that is not subject to ERISA. How does the ruling affect same-sex spouses in our plan?”    

Michael A. Webb, Vice President, Retirement Plan Services, Cammack LaRhette Consulting, answers:

As with ERISA plans, we will need to await future guidance as to the precise impacts on plans that are not subject to ERISA, including what happens when same-sex spouses move to a state where same-sex marriage is not recognized.

What the Experts know at present is the significant changes that impact non-ERISA 403(b) plans are ones that relate to the Internal Revenue Code and related regulations, which govern ERISA and non-ERISA plans. Specifically, plans that are not subject to ERISA will be impacted by the following changes outlined in our recent Q&A:

1.         Rollovers: as is the case with an opposite-sex spouse, an applicable same-sex spouse will now be able to roll over a distribution to his/her own IRA/qualified plan rather than an inherited IRA.

2.         Hardships: an applicable same-sex spouse is no longer required to be a “primary beneficiary” of the participant in order for the participant to request a hardship distribution for medical, tuition, or funeral expenses of the same-sex spouse

3.         Minimum Required Distributions: there is much more flexibility for applicable same sex-spouses in this area since they will now be able to defer beneficiary-related distributions until the participant would have turned 70 ½ and need not be concerned about their age relative to their spouse in the calculation of these distributions. These favorable rules already exist for opposite-sex spouses, and they are a significant improvement over the non-spouse rules, which require commencement of payment within one year of death, as well as other restrictions.


The other impacts listed our previous column (see “Ask the Experts – The Impact of the DOMA Ruling”), such as those dealing with spousal consent rules, would generally only apply to plans that are subject to ERISA. 


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.