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The Supreme Court ruling and gay couples' retirement plans

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The U.S. Supreme Court's recent ruling giving same-sex couples the right to marry and to have their marriages recognized throughout the country has impacts far past the nuptials themselves. One of those is in the retirement plans of married gay people. It's been estimated that the landmark decision could mean an increase in lifetime benefits for some married gay couples of as much as $250,000.

This is particularly good news for couples working in states where their marriage has not previously been recognized under the law. Two years ago, when the high court struck down the Defense of Marriage Act, the Department of Labor announced that the Employee Retirement Income Security Act would recognize marriages in states where the law recognized them. Although ERISA extended protections to all married same-sex couples regardless of their location, things were less clear for plan sponsors in states that didn't recognize the unions.

Another piece of early good news is that some of the largest retirement plan sponsors in the country, including United Airlines and Apple, immediately and publicly supported the Supreme Court's 5-to-4 decision. That support was echoed by the head of the ERISA Industry Committee, which represents the largest plan sponsors. She welcomed the uniformity established by the court's decision, saying, "The nation's top employers, many of whom are members of ERIC, will be relieved to be able to treat their employees uniformly, regardless of where they live or work."

Employers in states where same-sex marriage has not previously been legal are being advised to review their plans as well as their policies to determine whether they need to make any changes in order to be compliant with the law. For example, some retirement plan transactions and changes, such as beneficiary modifications, require spousal consent.

This historic ruling will necessitate changes by many employers and plan sponsors, regardless of the personal beliefs of their administrators. Those who do not follow the law and treat all married couples equally, regardless of gender, can and should be held legally accountable.

Source: BenefitsPro, "Sponsors welcome clarity in SCOTUS same-sex marriage ruling," Nick Thornton, June 26, 2015

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