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Same-sex retirement benefits retroactive to June 2013, IRS rules

Same-sex retirement benefits retroactive to June 2013, IRS rules

Employers are not required to retroactively offer qualified retirement benefits to married same-sex couples for plan years predating the U.S. Supreme Court's partial overturn of the Defense of Marriage Act, according to the Internal Revenue Service.

In a long-awaited guidance document published on Friday, the IRS clarified that employer-sponsored pension and retirement plans qualified under the Employee Retirement Income Security Act must offer married same-sex couples the same rights and benefits afforded to opposite-sex couples as of June 26, 2013, the date of the Supreme Court's ruling in United States v. Windsor.

Additionally, the IRS' guidance stated that employers may choose — but are not required — to extend some or all spousal retirement benefits to same-sex couples retroactively to include plan years that predate the court's ruling.

“A qualified retirement plan will not lose its qualified status due to an amendment to reflect the outcome of Windsor for some or all purposes as of a date prior to June 26, 2013,” the IRS guidance document states.

However, the IRS' guidance cautions employers that retroactively recognizing same-sex spouses for all purposes under a qualified retirement plan could have “unintended consequences,” such as triggering ownership attribution requirements and other rules that are “difficult to implement retroactively.”

If an employer does choose to offer qualified retirement benefits retroactively to same-sex spouses, an amendment to its retirement plan outlining the effective date of the change and the specific benefits being extended must be adopted by Dec. 31, 2014, according to the IRS.

A copy of the IRS guidance document is available here.