A married participant becomes disabled and submits a retirement
application in June. (His benefits would have been payable
July 1). Fund office sends the benefit election notice to
the participant. (Disability benefit is auxiliary, but paid in
the form of a QJSA). He dies 3 days after the notice is
sent.

Trustees would like to give the spouse the 50% QJSA now
rather than wait for her to reach his early retirement age.

Given the fact that the participant submitted all necessary paperwork
besides the election form, it seems the spouse should be entitled
to the 50% QJSA.

Agree? Any other issues to consider?

1. What does the plan say?
2. Any precedent?
3. Is this an HCE? Could any claim of discrimination arise?
4. See (1).

Not an HCE. No precendent. The
Plan simply requires the member
to submit a written application along
with all necessary documents. He did
this before his date of death, but
did not complete (or receive) the
QJSA election before he died. I think
we are going to treat it as a completed
application process and pay the benefit
in the default 50% QJSA.

If the employee didn't complete the necessary paperwork I suspect that the literal terms of the plan would prohibit the immediate survivor annuity. Having the plan administrator waive express terms of the plan or grant benefits not expressly provided for under the plan will come back and haunt you. I would suggest amending the plan to specifically cover this individual's situation. Then the plan administrator can say they were following the terms of the plan rather than making things up!

I disagree. The J & S can be paid if the plan fiduciary has the authority intrerpret the plan provisions and the plan does not expressly prohibit this payment.

By deeming this a completed application, I
don't think the Trustees are out on a limb.
Assume the guy was still alive and simply
refused to return the QJSA election form.
I think the regulations allow the Plan to begin
payment, so long as it is done in the form
of QJSA.

Every plan in the country (or at least the well-drafted ones) require participants to complete required election forms before they are entitled to commence payment. I've never seen a plan where the mere request for distribution forms is somehow treated as a definitive election as to form and time of payment. The plan document probably does require validly completed election forms to start payment. Ignoring this requirement is more than the exercise of one's power to interpret the plan document. Once a plan administrator ignores a condition precedent to a benefit entitlement, it becomes harder to say "no" to the next sympathetic case that comes along.

I guess it would depend on the interpretation of "to complete required election forms " especially "required".

Is anything legally wrong with oral instructions? You can have an oral contract so why not instructions?

Is anything wrong with the Plan Administrator following the stated wishes of the participant even though a form is missing? The form is only memorializing that which the PA has already been requested to do by the participant.

I do not see it as that much of a stretch from a QDRO that comes in after the death of the participant. The dead person is no longer a plan plan participant at the time the QDRO is receved, but since the intention was clear, it is accepted. Is this any different from :

EBIA Weekly: http://www.ebia.com/static/weekly/articles...nerId=BNL150609

Actual case: http://www.ebia.com/static/weekly/articles...nerId=BNL150609

Yes, a QDRO is different.

What is the difference?

The QDRO only comes from the court because there is a dispute.

Both are requests for action related to the account of the participant.

One has coerced or forced consent while the other is voluntary, but both have the same purpose, namely instructions/ request for action.

GBurns - Why do you think a QDRO is a forced action by one spouse against another?
I have seen plenty of these where neither party objects, since the QDRO is simply instructing the plan to pay the alternate payee.

The only time a QDRO is not coerced would be in a friendly divorce. I do not think that there are many. I do not think that there are many where 1 spouse is willing and eager to give up the money and so a compromise is arrived at so as to get it over with, hence "coerced" or "forced consent".

"Every plan in the country (or at least the well-drafted ones) require participants to complete required election forms before they are entitled to commence payment. I've never seen a plan where the mere request for distribution forms is somehow treated as a definitive election as to form and time of payment. The plan document probably does require validly completed election forms to start payment. Ignoring this requirement is more than the exercise of one's power to interpret the plan document. Once a plan administrator ignores a condition precedent to a benefit entitlement, it becomes harder to say "no" to the next sympathetic case that comes along."

Keep in mind that we are not flying by the seat of our pants. The guy did
complete a retirement application and submitted all required documentation.
Once this paperwork was reviewed a QJSA election was sent out to him.
I would urge them to treat this situation differently if the participant had
never returned a signed application.