MISCELLANEOUS PLAN PROVISIONS 76. Inalienability of benefits

Statement of Requirement: Code §§ 401(a)(13) and 414(p)

Sample Plan Language:

No benefit or interest available hereunder will be subject to assignment or alienation, either voluntarily or involuntarily. The preceding sentence shall also apply to the creation, assignment, or recognition of a right to any benefit payable with respect to a participant pursuant to a domestic relations order, unless such order is determined to be a qualified domestic relations order, as defined in section 414(p) of the Code, or any domestic relations order entered before January 1, 1985.

(Note to reviewer: The sample provision requires the plan administrator to comply with a domestic relations order entered before January 1, 1985, regardless of whether payment of benefits pursuant to the order has commenced as of such date. The plan may provide instead that a domestic relations order entered before January 1, 1985, will be treated as a qualified domestic relations order if payment of benefits pursuant to the order has commenced as of such date, and may be treated as a qualified domestic relations order if payment of benefits has not commenced as of such date, even though the order does not satisfy the requirements of § 414(p).)

(Note to reviewer: Any requirement set forth in the Internal Revenue Code that applies because a participant is married must be applied with respect to a participant who is married to an individual of the same sex. See Notice 2014-19, Rev. Rul. 2013-17, and the decision in U.S. v Windsor , 570 U.S. 12 (2013). Accordingly, under Reg. § 301.7701-18(b)(1), a marriage of two individuals is recognized for federal tax purposes if the marriage is recognized by the state, possession, or territory of the United States in which the marriage is entered into, regardless of the married couple's place of domicile. For example, a qualified domestic relations order adjudicating marital property rights must be provided to a same-sex spouse. See the Notes to reviewer at LRM #s 43 (Minimum Distribution Requirements) and 51 (Direct Rollovers), and CODA LRM XVII (Hardship Distributions) for additional provisions affected by the Windsor decision.)

(Note to reviewer: Section 339 of the SECURE 2.0 Act of 2022 amends the definition of “domestic relations order” under § 414(p)(1)(B)(ii) and the parallel

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provision under ERISA § 206(d)(3)(B)(ii)(II) to include a domestic relations order issued pursuant to a Tribal domestic relations law as well as a State domestic relations law. After amendment, § 414(p)(1)(B) provides that, for this purpose, a “Tribal” domestic relations law means a law issued by or under the laws of an Indian tribal government, a subdivision of such an Indian Tribal government, or an agency or instrumentality of either. The model language above is consistent with these changes. Conflicting language would require a conforming change.)