IRS provides guidance on adopting mid-year amendments to safe harbor 401(k) plans to reflect Windsor decision

The IRS has issued a notice providing guidance on mid-year amendments to 401(k) and 401(m) safe harbor plans in order to reflect the Supreme Court’s decision in United States v. Windsor on same-sex marriage.

The Windsor decision invalidated Section 3 of the 1996 Defense of Marriage Act (DOMA), which had provided that, in interpreting any federal law, a “marriage” was limited to a “legal union of one man and one woman as husband and wife” and a “spouse” was only “a person of the opposite sex who is a husband or a wife.”

In Notice 2014-19, the IRS provided guidance on how plans should be amended to comply with Windsor. In Notice 2014-19, Q&A-8, the IRS stated that the deadline to adopt a plan amendment to reflect Windsor is the later of (1) the otherwise applicable deadline under section 5.05 of Rev. Proc. 2007-44, or its successor, or (2) December 31, 2014. Moreover, in the case of a governmental plan, any amendment need not be adopted before the close of the first regular legislative session of the legislative body with the authority to amend the plan that ends after December 31, 2014.

Mid-year amendments

In this notice, the IRS clarifies Q&A-8 to state that a plan “will not fail to satisfy the requirements to be a 401(k) or (m) safe harbor plan merely because the plan sponsor adopts a mid-year amendment pursuant to Q&A-8 of Notice 2014-19.”

Source: IRS Notice 2014-37.

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