The Spark Institute, a Washington, D.C., trade group representing retirement plan vendors, has asked the Department of Labor and the Treasury Department to give pensions some wiggle room to deal with the benefits of gay and lesbian couples now that the Supreme Court has struck down the Defense of Marriage Act.
Following the court’s decision, there has been widespread confusion about who is now protected under the law. The court’s decision provided protection only for LBGT couples living in states where same-sex marriage is allowed. (A couple could be legally married in one state but move to one where their union is not recognized.) As part of their rules, Treasury and Labor could require pension plans to recognize same-sex couples for benefits no matter where they live, and the Spark Institute worries that some plan sponsors will be unfairly punished while trying to figure out the rules.
“Plan sponsors that make good faith efforts should not be unreasonably faced with enforcement actions on issues that could not have been anticipated and [where] there is little or no guidance or precedent,” said Larry Goldbrum, general counsel for the Spark Institute.
The institute is asking the two regulators to allow pension plans to base their same-sex spouse benefits on where the participants’ marriage ceremonies took place to simplify administration.
The institute also asked the departments to limit the retroactive effect of the court’s decision on plans.
“Doing so will allow plan sponsors to follow reasonable approaches with respect to these matters and minimize the potential additional administrative costs and complexities of operating their plans,” said the institute in its letter.
And the institute is seeking guidance on the definition of a “spouse” to ensure that the plans’ definition complies with the DOL’s and the Treasury Department’s view of the Supreme Court ruling.