A group of organizations representing retirement plan sponsors, administrators, recordkeepers and advisors urged the Treasury Department to limit the effect of the Supreme Court’s decision striking down the Defense of Marriage Act on the pension decisions of same-sex couples.
The group, which included the U.S. Chamber of Commerce, the Spark Institute and the ERISA Industry Committee, argued in a letter that recalculating spousal benefits, death benefits and required minimum distributions to same-sex partners would open plans and participants to complicated questions about payments and decisions made under DOMA.
The group’s letter, addressed to J. Mark Iwry, senior advisor to the secretary and deputy assistant advisor for retirement and health policy, and George Bostick, benefits tax counsel to the Office of Tax Policy, strongly recommended that the IRS “utilize its authority … to limit the extent of the decision’s retroactivity.”
In U.S. v. Windsor, the high court struck down the Defense of Marriage Act, which limited the federal interpretation of marriage to being between a man and woman. The case the court considered involved a same-sex couple married in Canada. When one partner died, the other was denied the federal estate tax exemption afforded spouses.
“Before the court’s decision in Windsor,” the letter said, “retirement plans were being administered, with respect to same-sex spouses, in accordance with federal law.”
Forcing retirement plans to operate as if the previous law never existed, “would place a significant, complex and costly burden on such plans.”
The other organizations that signed the letter were the: American Council of Life Insurers, ESOP Association, Financial Services Institute, Insured Retirement Association, Investment Company Institute, Plan Sponsor Council of America, Securities Industry and Financial Markets Association, Small Business Council and the Society for Human Resource Management.