The Labor Department has released guidance on same-sex couples who are legally married, defining them as spouses — regardless of which state they live — in the context of retirement plans. The agency's ruling hews closely to the Internal Revenue Service's and Treasury Department's Ruling 2013-17, which expands “spouse” and “husband and wife” to include gay couples in the context of federal tax law.
Further, both the IRS/Treasury ruling and the DOL guidance recognize same-sex marriages based on where the couples were married, rather than the state in which they live.
“A rule for employee benefit plans based on state of domicile would raise significant challenges for employers that operate or have employees in more than one state or whose employees move to another state while entitled with benefits,” the Labor Department noted in its guidance.
In reality, had the agency decided to go with recognizing marriages based on where couples reside, the validity of spousal elections and consents on plans could change if the spouses were to move to a jurisdiction that didn't recognize their marriage. This would be an administrative nightmare for record keepers, as they'd have to keep track of changes in residence and tweak their benefits accordingly.
Such was the concern brought by the SPARK Institute Inc., an advocacy group for retirement plan record keepers and service providers.
Furthermore, same sex-spouses could lose their rights if they went to a state that didn't recognize their marriage.
The Labor Department's guidance not only covers the entire U.S. and Puerto Rico, but all of the U.S. territories, including the Virgin Islands, American Samoa, Guam and the Northern Mariana Islands.