The IRS in April issued two notices that provide some long awaited guidance related to retirement plan administration. One addresses treatment of same-sex marriages after the Supreme Court ruling in United States v. Windsor ruling the Defense of Marriage Act unconstitutional and the other deals with rollovers by qualified retirement plans.
- Plans are not required to recognize same-sex marriages prior to June 26, 2013.
- Plans are not required to have adopted the celebration rule until September 16, 2013. Plans that used the domicile rule prior to that will not be penalized.
- Plans are permitted to choose to recognize same-sex marriage prior to June 26, 2013, and can choose the purposes for which same-sex marriages are recognized for periods prior to that date.
- Plans with terms that are inconsistent with the DOMA decision must be amended by the later of (i) the date the plan otherwise would have to be amended for changes in applicable law or (ii) Dec. 31, 2014.
2014-9 provides two new due diligence safe harbor procedures that allow a plan administrator to reasonably conclude that a rollover into the plan is a valid rollover contribution. They are simpler and eliminate the need for the plan to obtain supporting documentation from the transferring plan for many rollovers. It also provides for payment of rollovers via wire transfer or other electronic means, so long as the necessary information is communicated to the receiving plan administrator, something many plans were already doing.
Sponsors and administrators of retirement plans are encouraged to review both of these notices to ensure appropriate compliance.
Keith R. McMurdy is a partner with Fox Rothshild focusing on labor and employment issues; he can be reached at
The information in this legal alert is for educational purposes only and should not be taken as specific legal advice.