The Ninth Circuit concluded that a plan fiduciary abused its discretion in denying survival benefits to a pension plan participant’s domestic partner.  In so ruling, the Court explained that the plan’s choice of law provisions provided that the plan would be governed by California law in a manner consistent with the requirements of the Code

On June 26, 2015, the U.S. Supreme Court issued a historic decision in Obergefell v. Hodges, holding that the Fourteenth Amendment’s Due Process and Equal Protection Clauses require states to allow same-sex marriage and to recognize same-sex marriages performed in other states.  The decision comes exactly two years to the day from the Court’s decision in Windsor defining “spouse” to include same-sex spouses for purposes of federal law.

As a result of the Court’s decision, the existing 14 state bans on same-sex marriage are invalid, and same-sex spouses are entitled to all of the rights extended to opposite-sex spouses under both federal and state law. 

Shortly after the U.S. Supreme Court ruled (in U.S. v. Windsor) that Section 3 of the federal Defense of Marriage Act (DOMA) was unconstitutional, the IRS announced that same-sex marriages will be recognized for federal tax purposes and provided guidance relating to the impact of Windsor on certain types of employee benefits.  At the same time, the IRS left a number of issues open for future guidance for qualified retirement plans.

Last week, the IRS issued Notice 2014-19, clarifying the application of Windsor to qualified retirement plans.  This guidance specifically addresses issues concerning the effective date and retroactive effect of the decision as well as the timing of relevant plan amendments.  The IRS also published six Frequently Asked Questions (FAQs) that address details such as beneficiary designations in profit-sharing plans, the applicability of choice of law provisions in qualified plans, the application of Windsor to Code Section 403(b) plans, and additional guidance relating to plan amendments.

The Ninth Circuit Judicial Council, an administrative body that reviews decisions of the court’s chief judge, recently weighed in on an issue involving same-sex domestic partner health benefits in the post-Windsor world.  The decision is interesting insofar as it relies at least partially on the Windsor decision in awarding “spousal” benefits to an unmarried

A few weeks after the Internal Revenue Service (IRS) stated that it will apply a “place of celebration” rule in recognizing same-sex spouses for purposes of the Internal Revenue Code (including with respect to employee benefit plans), the U.S. Department of Labor (DOL) announced today that it too will interpret the term “spouse” as including

On August 29, 2013, the U.S. Department of the Treasury and the Internal Revenue Service issued important guidance for employers and employees relating to the impact of the Windsor decision on employee benefit plans. In Revenue Ruling 2013-17, the agencies ruled that a same-sex couple legally married in any jurisdiction will be recognized as spouses by the IRS for federal tax purposes even if the couple resides in a jurisdiction that does not recognize the validity of their marriage. This “place of celebration” rule is welcome news for employers and other benefit plan sponsors, who may now administer their benefit plans in a uniform manner with regard to same- and opposite-sex married couples. (The Ruling confirms, however, that unmarried domestic partners and civil union partners will not be recognized as married for federal tax purposes, whether the partners are the same or opposite sex.). See (http://www.proskauer.com/publications/client-alert/special-alert-for-employers-and-other-benefit-plan-sponsors/) for our Client Alert discussing the impact of Windsor on employee benefit plans.

In the first reported ERISA decision post-Windsor, the U.S District Court for the Eastern District of Pennsylvania held (in Cozen O’Connor, P.C. v. Jennifer Tobits) that a same-sex spouse is to be treated as the decedent’s lawful spouse for purposes of entitlement to death benefits under a retirement plan. In reaching its decision, the court relied on Windsor and reasoned that ERISA and the Internal Revenue Code (Code) provide the definition of spouse; ERISA and the Code incorporate valid state law; and, under Illinois’ civil union statute, Illinois recognizes lawful same sex marriages solemnized in other jurisdictions.

The Defense of Marriage Act, which defines “marriage” and “spouse” as excluding same-sex partners, was struck down by the U.S. Supreme Court today in a 5-4 decision on equal protection grounds.  Stay tuned for information about our upcoming Webinar regarding the impact of the Court’s decision on employer-provided benefits.  We will also post a link

If the U.S. Supreme Court rules that the federal Defense of Marriage Act (“DOMA”) is unconstitutional in Windsor v. U.S., which is expected to be decided this month, will employers that offer health benefits to employees’ same-sex domestic partners cease offering “domestic partner” benefits separately from benefits for employees and their spouses? Currently, one rationale for offering same-sex domestic partner health coverage is based on an equitable argument that, because an employee’s same-sex domestic partner typically cannot be treated as a spouse or dependent for federal tax purposes, a special coverage category is warranted. At the same time, this special status results in an economic hardship in that the employee must pay income tax on the value of coverage provided to the domestic partner. A repeal of DOMA would enable same-sex couples to avoid this economic hardship (at least with regard to federal income taxes). In other words, if DOMA is repealed, the definition of “spouse” for purposes of federal laws will no longer be limited to an opposite-sex spouse. Consequently, same-sex couples will have the opportunity to avoid federal taxation of their benefits by marrying. That could lead employers to conclude that the special category of domestic partner coverage is no longer needed.