On June 26, the U.S. Supreme Court ruled that Section 3 of the Defense of Marriage Act (DOMA) was unconstitutional. The decision gives married same-sex couples, who are legally married in their own states, federal protections such as Social Security, veterans benefits, health insurance, and retirement savings. Given the implications that this ruling could have on the payment of retirement benefits, plan sponsors for both defined contribution (DC) and defined benefit (DB) plans should be aware of the aspects of plan administration that may be affected. There are a number of questions that have yet to be answered on federal, state, and plan sponsor levels. Let's look at just a few:

Definition of marriage in plan documentation
The state in which a company is domiciled may not recognize same sex marriage, but ERISA, which governs benefits at a federal level, now does. Some plan documents specifically define marriage for the plan participants (e.g., as between one man and one woman). These definitions may no longer be permissible and should be reviewed carefully with legal counsel.

State's rights
The world is getting smaller and smaller, and that is certainly no exception for commerce. Many large companies have workers who move around the country for both short-term and long-term projects. Let's say a participant is legally married in a state where same-sex marriage is recognized, but then has to move to another state for business in which same-sex marriage isn t recognized. How should the company address the payout of benefits and how should this be reflected in plan documentation?

Retroactive benefits
Now that same-sex married couples are entitled to spousal retirement benefits, how does the company address the potential for retroactive payouts to surviving spouses in states that may or may not recognize same-sex marriages? For example, if a plan participant who was in a state that recognized same-sex marriage passed away five years before Section 3 of DOMA was repealed, how will the company choose to address the potential liability for those five years of past benefits for the surviving spouse?

We await guidance from the agencies and the courts on these and other related issues. In the meantime, review your plan documents and procedures, step carefully, and check with your ERISA counsel.