Employee benefits effects of Supreme Court same-sex marriage decision
(Posted on June 26, 2015 by )


On June 26, 2015, the Supreme Court struck down all state bans on same-sex marriage in Obergefell v. Hodges. For employers, this decision raises the issue of what changes must be made in employee benefits to reflect the decision.

For this purpose, we will look at three categories of employers: those that have already been offering benefits to same-sex spouses, those that have not previously offered benefits to same-sex spouses, and those that have been offering benefits to domestic partners. Read more.

State Taxes for Married Same-Sex Couples
(Posted on June 26, 2015 by )


In light of the Supreme Court decision in Obergefell v. Hodges, employers that maintain plans covering employees in same-sex marriages who live in any of the states that previously did not recognize same-sex marriage will have to adjust state tax withholding and reporting for such employees. State Taxes and Married Same-Sex Couples Before Obergefell provides a handy chart for determining which states are affected.

Employee benefits effects of the Supreme Court decision on the Affordable Care Act
(Posted on June 25, 2015 by )


In King v. Burwell, the Supreme Court today upheld a key provision of the Patient Protection and Affordable Care Act (“ACA”). What is the effect of this decision on employee benefit plans? Read more.

EEOC: Discrimination based on sexual orientation or transgender status is prohibited sex discrimination
(Posted on May 12, 2015 by )


Federal law contains provisions forbidding discrimination based on several classifications: race, sex, veteran status, etc. However, no federal law explicitly prohibits discrimination based on sexual orientation or transgender status. As a result, many employers in states which do not have their own legislation barring discrimination based on sexual orientation or transgender status have assumed that no laws prohibited such discrimination.

The Equal Employment Opportunity Commission (“EEOC”) has now called this assumption into question, by bringing several lawsuits treating discrimination based on sexual orientation or transgender status as a form of sex discrimination prohibited by Title VII of the Civil Rights Act of 1964. This issue is a focus of the EEOC’s Strategic Enforcement Plan for 2013-2016. Read more.

Can a state retirement system deny benefits to felons? It’s complicated.
(Posted on May 12, 2015 by )


Many state laws provide that an individual who commits a felony related to his or her official duties will forfeit benefits under the state retirement system. It is clear that such provisions in a pension plan are permissible if they were included in a pension plan on its adoption, or if they apply only to employees hired after the provision was adopted. However, two states (New York and California) have recently struggled with the issue of whether such a provision can be effective with respect to employees hired before the adoption of the provision. Read more.

IRS Clarifies That Plans Do Not Necessarily Have to Recoup Overpayments
(Posted on April 26, 2015 by )


What should a retirement plan sponsor do if it discovers that it has overpaid benefits to a retiree or other former employee? The question has recently arisen in the case of the pension plan of Pontiac, Michigan, which accidentally overpaid many of its retirees an average of $1,000 over a 16-month period. Read more.

Defined Benefit Versus Defined Contribution: Lessons from Utah
(Posted on April 26, 2015 by )


The Pension Research Council of The Wharton School of the University of Pennsylvania has done a study on the effects of Utah’s change in its pension system. Before the change, employees participated in a defined benefit plan. Employees hired after the change were given a choice between a hybrid (defined benefit/defined contribution) plan or a straight defined contribution plan. Those who failed to make a choice were automatically assigned to the hybrid plan. In general, either of the new plans was less generous than the old defined benefit plan.

In general, the Pension Research Council found that employees hired after the change had greater turnover than those hired before the change. Moreover, those electing into the hybrid plan were more likely to stay with the employer than those electing into the defined contribution plan. Those who defaulted into the hybrid plan had the highest turnover.

The Pension Research Council concluded that while the change may have saved the state money in pension costs, “public pension reformers must consider employee responses, in addition to potential cost savings, when developing and enacting major pension plan changes.”

Governmental Plan Determination Letters: Last Chance?
(Posted on April 22, 2015 by )


From February 1, 2015 through January 31, 2016, the Internal Revenue Service (“IRS”) is accepting requests for determination letters regarding the tax qualification of most governmental retirement systems, other than those which already filed during the period February 1, 2013 to January 31, 2014. As discussed under “Timing of a determination letter request,” below, this may be the last chance for state and local retirement systems and other governmental plans to obtain formal IRS reassurance that their plans are qualified. This article discusses why a determination letter is important, and what needs to be done to obtain one. Read more.

The period applies to all individually designed plans. There are separate periods applicable to volume submitter and prototype plans.

Family & Medical Leave Act regulations protect same-sex spouses, regardless of domicile
(Posted on February 23, 2015 by )


Immediately after the Supreme Court’s decision in United States v. Windsor, the Department of Labor announced that for purposes of the spousal protections of the Family and Medical Leave Act of 1993 (FMLA), it would recognize a same-sex marriage only if it was legal in the jurisdiction of the couple’s domicile. It has now reversed that position, issuing final regulations which recognize a marriage a) within the United States, if it was valid in the state in which it took place, and b) outside of the United States, if it was valid in the jurisdiction in which it took place and if it could have been entered into in at least one state. The effective date for the final rule was March 27, 2015.

Update (June 26, 2015): This rule is in line with the Supreme Court decision in Obergefell v. Hodges, which has now recognized same-sex marriages nationwide.

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