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Physician Retirement Plans and the recent DOMA Rulings

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By Kari Middleton, Financial Advisor

Medical Wealth Management


On June 26, 2013, the U.S. Supreme Court ruled Section 3 of the federal Defense of Marriage Act (DOMA), which had prohibited the federal government from acknowledging same-sex marriages, was unconstitutional.

In a related case, the court found that those challenging the state court decision making same-sex marriage legal in California (Proposition 8) lacked standing to do so, restoring legal same-sex marriage in California. Same sex marriage is now legally recognized in 13 states and Washington, D.C..

Physicians who have qualified pensions that cover employees will need to review their plans because same-sex spouses now have federally protected benefits.

The decision will affect retirement plan administration because plans must have the consent of the same-sex spouse for any purposes for which the consent of an opposite-sex spouse is required.

For a legally married couple who live in a state where same-sex marriage is recognized:

  • Federal laws governing employee benefit plans will require companies to treat employees’ same-sex and opposite-sex spouses equally;
  • Physician Employers with pension plans (both Defined Benefit and Defined Contribution plans) will be required to recognize same-sex spouses for purposes of determining surviving-spouse annuities. Same-sex spouses must also agree to receive payment of survivor pension benefits in a form other than a 50 percent joint and survivor annuity; and
  • Employers with 401(k) plans will have to recognize same-sex spouses for determining death benefits, and they must give consent to any beneficiaries designated other than themselves.

The DOMA decision may force some physicians, who are employers, to amend the definition of spouse to include same-sex partners in their retirement plan documents.

What is unclear, is the affect on plan sponsors with same-sex spouses of employees living in states that do not recognize same-sex marriages. ERISA requires a uniform process for administering benefit plans and preempts state law, but the law does not define the term “spouse.”   Stay tuned for further guidance from the IRS on the definition of “spouse” and whether the change will be retroactive.

If your Medical Practice provides a retirement plan and it may need to be amended to conform to new laws, please contact Alesco, Inc to schedule a complimentary review.
Kari Middleton, is a Registered Representative with, and Securities offered through LPL Financial. Member FINRA/SIPC.         CA Insurance License#0C98340

Phone:  877-984-9993       

 This material was created for educational and informational purposes only and is not intended as tax, legal, or investment advice. Please see an investment professional regarding your own specific needs.

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