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Matthew L. Gouaux is an associate attorney at Trucker Huss, an employee benefits specialty law firm in San Francisco. He concentrates his practice on the design and tax-qualification of retirement plans including pension, profit sharing, 401(k) and 403(b) plans and the taxation of employee benefits.Whether you love, hate or could care less about the notion of whether gay couples should be allowed to marry, the recent decision by the California Supreme Court legalizing same-sex marriages means that companies with employees in the state need to scrutinize and probably update benefits language. The problem for many companies is how to comply with two often conflicting laws -- the one in California and the federal Defense of Marriage Act (DOMA). Benefits and human resource officers everywhere should probably keep up to date on the complex issue in the event their firms expand to California or Massachusetts, the other state where gay marriages are recognized, or if other states make the same move.
Matthew Gouaux of the California-based law firm Trucker Huss cautions that this area of law is still evolving and that there are many questions and conflicts yet to be resolved. But what is clear, he writes, is that, at least in Massachusetts and California, the word marriage "has become an ambiguous plan term" and many companies may have to "specify that certain plan provisions do or do not apply to a same-sex spouse."
Gouaux sees little impact of the ruling on health and welfare benefits. It is pension plans that will likely require the greatest attention. The chief problem is that DOMA does not allow companies to recognize a gay spouse when it comes to designating spouses as survivors entitled to particular pension benefits. However, he quickly points out, plans are still capable of offering such benefits to spouses in same-sex marriages -- just as long as marriage is not the reason they qualify for the benefit. "Indeed, many plans already allow any participant, married or not, the option of electing a joint and survivor annuity with any nonspouse beneficiary," he says.
Gouaux spells out the types of plans affected and steps a company can take to clarify definitions and still provide benefits as they intended. Once that is done, he says, "Any plan amendments should be timely communicated to participants via a new Summary Plan Description or a Summary of Material Modifications."
POSTED BY: Leland Traiman (June 26, 2008 12:48 PM)
Companies with employees in California should have already scrutinized and updated benefits language because, since 2005, California's domestic partner law mandated that every law, regulation & court decision which applied to spouses in a marriage would equally apply to register domestic partners. Same sex marriage does not change that, nor does it change the non-recognition of same sex unions on the federal level. To say one only needs to do this now because of same sex marriage show how behind the curve you are.
POSTED BY: Charlotte (July 02, 2008 10:49 AM)
There will always be people against equality by using the excuse of what's it going to cost. In the long run gay marriage will enhance companies by providing the same benefits as heterosexual families. Who wants to work for a company that doesn't take care of its employees? For the truth about gay marriage check out our trailer. Produced to educate & defuse the controversy it has a way of opening closed minds & provides some sanity on the issue: www.OUTTAKEonline.com
POSTED BY: Matthew Gouaux (July 09, 2008 05:03 PM)
While it is true that California insured health and welfare benefit plans have been required to offer benefits to domestic partners for some time, the same is not true for retirement plans. The term "spouse" appears frequently in retirement plans, which are required by federal law (ERISA) to offer different forms of benefit to married and unmarried participants. That term must now be clearly defined because federal law (DOMA) prohibits retirement plans from treating a participant's same-sex spouses as his or her spouse for some, but not all, purposes. While some retirement plans may continue to limit the term "spouse" to opposite-sex spouse, many employers, particularly those in California, are now extending the benefits previously available only to opposite-sex spouses to same-sex spouses by amending their retirement plans to treat a participant's same-sex spouse as his or her "spouse" to the extent not prohibited by federal law.
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