45 Democrats write urging Treasury, IRS to revise old guidance that permits retirement plans to discriminate against same-sex couples
Under current law, some individuals in same-sex relationships who lost their partners shortly after being married or before they were able to legally marry are being denied survivor benefits by retirement plans
Senators: “We should not let the echoes of the bigotry that robbed so many people of the right to marry for so long rob them once again after they have lost their loved ones.”
(Washington, D.C.) – Yesterday, U.S. Senator Patty Murray (D-WA), Chair of the Senate Health, Education, Labor, and Pensions (HELP) Committee, Senator Ron Wyden (D-OR), Chair of the Senate Finance Committee, and 43 of their Senate Democratic colleagues sent a letter to Secretary of the Treasury Janet Yellen and Commissioner of the Internal Revenue Service Charles Rettig calling for the Biden Administration to revise current guidance that has led to members of the LGBTQIA+ community being denied pension survivor benefits after losing their life partner.
The letter calls for action to address the fact that some retirement plans are refusing to deem same-sex marriages as having met the one-year requirement necessary to be eligible for survivor benefits in situations where the couples were legally barred from marrying within one-year of the participant’s death. The Social Security Administration recently took action to stop such obstacles from denying people survivor benefits through Social Security, and the senators urged the IRS to take similar action to ensure individuals aren’t denied pension survivor benefits due to discrimination.
“We write to urge you to reconsider the guidance issued under the Obama Administration that permits certain qualified retirement plans to discriminate against providing survivor benefits to same-sex couples. We should not let the echoes of the bigotry that robbed so many people of the right to marry for so long rob them once again after they have lost their loved ones,” wrote the senators.
“When the Supreme Court struck down state bans on same-sex marriage, tens of thousands of Americans rushed to get married. These LGBTQ+ Americans had been in committed relationships for years—some, for decades—and were finally able to have their love recognized under the law and receive all of the benefits that come with marriage. However, in a painful reminder of the inequality these couples have long faced, some in same-sex relationships who tragically lost their partner shortly after being married or before they were able to legally marry have also been kept from receiving survivor benefits. For these surviving spouses or partners, difficulties arise where access to benefits depends on the length of their marriage.”
Full text of the letter below and HERE.
Dear Secretary Yellen and Commissioner Rettig:
We write to urge you to reconsider the guidance issued under the Obama Administration that permits certain qualified retirement plans to discriminate against providing survivor benefits to same-sex couples. We should not let the echoes of the bigotry that robbed so many people of the right to marry for so long rob them once again after they have lost their loved ones.
When the Supreme Court struck down state bans on same-sex marriage, tens of thousands of Americans rushed to get married. These LGBTQ+ Americans had been in committed relationships for years—some, for decades—and were finally able to have their love recognized under the law and receive all of the benefits that come with marriage. However, in a painful reminder of the inequality these couples have long faced, some in same-sex relationships who tragically lost their partner shortly after being married or before they were able to legally marry have also been kept from receiving survivor benefits.
For these surviving spouses or partners, difficulties arise where access to benefits depends on the length of their marriage. For example, under current law, certain qualified retirement plans must provide a qualified joint and survivor annuity (“QJSA”) upon retirement to married participants (and generally must provide a qualified preretirement survivor annuity (“QPSA”) to the surviving spouse of a married participant who dies before retirement).[1] A plan, however, does not have to treat a participant as married unless the participant and spouse have been married throughout the one-year period ending on the earlier of the annuity starting date or the date of the participant’s death.[2]
It has come to our attention that some retirement plans are refusing to deem same-sex marriages as having met the one-year requirement when the couples were legally barred from marrying within one-year of the participant’s death.
In 2014, the Internal Revenue Service (“IRS”) issued guidance following the Supreme Court’s decision in U.S. v. Windsor, which struck down Section 3 of the Defense of Marriage Act defining marriage as a union between one man and one woman.[3] In Notice 2014-19, the IRS required a qualified retirement plan to recognize the same-sex spouse of a participant as the participant’s spouse on and after June 26, 2013, if the participant was domiciled in a state that recognizes same-sex marriages, as well as on and after September 16, 2013, if the participant was domiciled in a state that does not recognize same-sex marriages.[4] The guidance, though, also notably provided that a qualified retirement plan will not be disqualified “merely because it did not recognize the same-sex spouse of a participant as a spouse before June 26, 2013.”
By permitting a plan to disregard same-sex relationships before that date, the IRS ignores the reality that many of these couples were barred from marriage because of discriminatory marriage laws where they lived—even though they were in loving, committed relationships and would have married earlier if they could. It was not until June 26, 2015, that same-sex relationships were properly recognized, when the Supreme Court held in Obergefell v. Hodges a constitutional right to marry, including the “constellation” of rights associated with marriage, such as the “rights and benefits of survivors.”[5]
The Social Security Administration recently recognized this reality and will accept and/or reconsider claims for survivor benefits by same-sex spouses and partners who were unable to be married for the required nine months because of state marriage bans.[6] The IRS should do the same for pension survivor benefits. Just as laws barring same-sex couples from marriage are unconstitutional, so, too, are exclusions from survivor benefits that are tied to those marriage bans.
Specifically, the IRS should revise its 2014 guidance to require that qualified retirement plans with marriage duration requirements must recognize as eligible for survivor benefits bona fide same-sex relationships where same-sex partners had married their loved ones but were denied equal access to benefits because they were prevented from being married for the time required under the plans’ documents, or where they were prevented from marrying their loved ones at all. While the use of a marriage duration requirement may be justified as a proxy for detecting or deterring sham relationships between opposite-sex couples—who have always enjoyed the right to marry—it cannot serve that function for same-sex couples who were banned from marrying one another. Surviving same-sex partners and spouses who were unable to be married because of discriminatory marriage laws should be permitted to submit new claims for survivor benefits or reopen previously denied claims.
Correcting this error will end the discriminatory treatment of potentially thousands of same-sex partners and spouses, and allow them to access the benefits they are owed.
We look forward to hearing from you. Thank you in advance for your attention to this important matter.
Sincerely,
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[1] See 26 U.S.C. § 401(a)(11).
[2] See 26 U.S.C. § 417(d); see also 26 CFR § 1.401(a)-20 Q-25.
[3] 570 U.S. 744 (2013).
[4] See IRS Notice 2014-19, available at https://www.irs.gov/pub/irs-drop/n-14-19.pdf.
[5] 576 U.S. 644, 670 (2015). The Supreme Court further acknowledged these rights in Pavan v. Smith, 137 S. Ct. 2075 (2017), repeating that “same-sex couples, no less than opposite-sex couples, must have access” to the benefits of marriage. Id. at 2078 (emphasis added).
[6] See Tara Siegel Bernard, More Same-Sex Couples May be Eligible for Social Security Survivor Benefits, N.Y. Times (Nov. 2, 2021), https://www.nytimes.com/2021/11/02/business/social-security-same-sex-survivor-benefits.html (reporting that the Department of Justice and Social Security Administration dropped their Trump-era appeals to two class action lawsuit rulings, both of which had found that surviving same-sex partners who were not able to marry because it was not yet legal were denied fair access to Social Security survivor benefits).
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