Pension
Trends Volume V, No. 3, August 2004
Download/view PDF version
Pension
Trends Volume V, No. 3, August 2004
Download/view PDF version
In this issue...
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Same-Sex Marriage and Retirement Plans
It is still early in the policy formulation phase, but same-sex marriages issues are already facing some pension plan administrators. Here is a little guidance.
The applicable federal law is the Defense of Marriage Act of 1996 (DOMA). DOMA defines a marriage for federal law purposes as between one man and one woman. Further, it defined a spouse as a husband or wife of the opposite sex. In other words, same-sex marriages are not recognized as marriages under federal law.
ERISA is also a federal law. ERISA (with perhaps a few exceptions) pre-empts state laws that relate to employee benefit plans, including pension plans. Therefore, when it comes to spousal rights under ERISA, such as qualified joint and survivor annuity options and automatic beneficiary designations, a pension plan is not bound to recognize same-sex marriages. However, there is nothing to prevent a plan from granting spousal rights to same-sex spouses. So for example, a plan could grant a same-sex spouse the right to be the automatic beneficiary of a death benefit if no other beneficiary is properly designated.
A plan may not, however, extend spousal tax benefits to a same-sex partner. For example, under federal tax laws, certain rollover options are available to spouses that are not available to other beneficiaries. DOMA defines who is a spouse for this purpose, not state law nor terms of a pension plan. Therefore, even if your goal as a plan administrator is to be as all-encompassing as possible, be careful not to act beyond your authority.
And keep in mind that other employee benefit plans have similar, but not identical issues with regard to same-sex marriages, especially employee benefit plans that do not enjoy the ERISA preemption of state law. It is not too early to start reviewing your plans and contracts with legal counsel. We will keep you posted as more guidance and consensus develops.
Independent Actuaries, Inc. is pleased and excited to announce that Nina Pileggi will be joining IAI in the early part of September. Nina is an Enrolled Actuary, an Associate of the Society of Actuaries and a Member of the American Academy of Actuaries, and has 17 years of experience in the actuarial field. Nina most recently headed up the in-sourced retirement benefit calculator department at Mercer Human Resource Consulting. Her focus at IAI will be mainly on mid-sized, multi-employer, and cash balance plans.
In addition to working as a consulting actuary, Nina owns her own yoga studio in Beaverton and is a certified Iyenar Yoga teacher. She enjoys spending time with her family, hiking and gardening.
Independent Actuaries would also like to congratulate one of its actuarial analysts, Shawna Floistad, on becoming a Qualified Pension Administrator. Shawna has a degree in mathematics from Portland State University and is working her way towards an Enrolled Actuary designation. Shawna has worked on small and mid-sized defined benefit and defined contribution plans. Congratulations Shawna!
And finally, Independent Actuaries would like to say goodbye and good luck to Terri Savage. Terri has been an analyst here at IAI since 2002 but has decided to return to Willamette University for a masters degree in business. We are very sorry to see her go but we wish her all the best in her academic pursuits.
This newsletter has been published in order to share general information with our professional contacts. The information presented in this newsletter should not be relied upon without first seeking the advice of a CPA, Attorney or other benefit professional.