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Supreme Court’s DOMA Decision: Not the End of the Story

The U.S. Supreme Court ruled yesterday that the Defense of Marriage Act (DOMA) is unconstitutional. The Court’s decision in United States v. Windsor means that same-gender marriages must be recognized by the federal government in the states that permit them. For ERISA plans, however, the Court’s decision leaves open more questions than it answers.

There are currently 10 states (including the District of Columbia) that permit same-gender marriages: Connecticut, Iowa, Maine, Maryland, Massachusetts, New Hampshire, New York, Vermont, Washington and Washington, D.C. By Aug. 1 that number will increase to 14, with the addition of California (after the temporary “hold” on same-gender marriages is lifted pursuant the Court’s decision in Hollingsworth v. Perry, also issued yesterday), Delaware (effective July 1), and Minnesota and Rhode Island (both effective Aug. 1).

Same-gender married couples in those states will be recognized by the federal government. However, it is not clear which, if any, of the federal rights and responsibilities of marriage will be afforded to same-gender married couples who live in states that do not permit or recognize same-gender marriages.

This potentially disparate treatment of same-gender married couples based on their state of residence will have a direct impact on retirement plans, especially those offered by companies with employees who reside in different states. Take, for example, a company that is headquartered in Virginia. If one of its employees lives in Maryland (which permits same-gender marriage) but works in Virginia (which does not), it is not clear how the employee would be treated for pension plan purposes. Is she married or single?

Additional guidance from the various federal government agencies will be required. In the wake of the decision, President Obama instructed the U.S. Attorney General to “work with other members of [his] Cabinet to review all relevant federal statutes to ensure this decision, including its implications for federal benefits and obligations, is implemented swiftly and smoothly.” Until that task is accomplished, employers should consult with counsel and review their plan documents and policies to determine what, if any, steps need to be taken to ensure compliance with the Court’s ruling.

For example, beneficiary designation forms may now be invalid for plan participants who previously named someone other than their same-gender spouse as a beneficiary. In addition, the plan’s definition of spouse (if there is one in the plan) may need to be updated to comply with the Court’s ruling (especially in plans sponsored by companies that have employees in “recognizing” and “non-recognizing” states).

Ronald J. Triche, Esq., APM, is ASPPA's Assistant General Counsel and Director of Government Affairs.

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