One unanswered question is whether plan sponsors should define “spouse” for benefit purposes based on an employee’s state of residence or the state in which the employee was married (see “Benefit Changes Ahead After DOMA Ruling”). The SPARK Institute has requested guidance about this matter “on an expedited basis.”
In a letter to the Department of Labor (DOL) and the Internal Revenue Service (IRS), SPARK General Counsel Larry H. Goldbrum contends using the state in which individuals enter into a marriage (State of Celebration) will simplify plan administration by eliminating the need for plan sponsors to change a participant’s marital status, as well as the plan features, rights and notices that such married participants are entitled to, if they move to a different state. “It is vital that plan sponsors be able to follow a uniform rule in the administration of their plans for all of their employees. This is particularly important for employers that have employees in multiple states. Although complete uniformity does not appear to be possible at the present time due to the differing laws among the states about same-sex marriages, some degree of uniformity and certainty can be achieved if plan sponsors are permitted to determine a participant’s marital status based on the State of Celebration,” Goldbrum wrote.
Goldbrum points out that among the most difficult issues plan sponsors must address are those dealing with retroactive rights of same-sex spouses who may not have been considered married for plan purposes when certain notices, rights and plan features would have otherwise been triggered. “In many instances it is likely to be onerous, cost prohibitive, impracticable or impossible to provide notices, rights, and plan features retroactively,” he wrote. SPARK is asking regulators to allow plan sponsors to limit, when appropriate, the retroactive effect of the court’s decision regarding DOMA to the effective date of the decision.
The letter also asks for guidance about how to treat individuals who entered into a civil union or were domestic partners because a lesser or alternate status was their only option, and about timing of plan amendments.
The letter is here.