When Divorce Unravels Retirement Plans
"For starters, both parties in a divorce are likely to face a drop in their living standard. But women tend to fare worse, says Karen C. Altfest, executive vice president at Altfest Personal Wealth Management in New York. On average, they work fewer years than men since they are more likely to take time off to raise the children. This means they haven't built up as many assets and therefore have less negotiating power." (The Wall Street Journal)
[Guidance Overview] Creative Divorce Planning: Applying the QDROtic Equation
"The recently decided Fifth Circuit decision, Brown v. Continental Airlines, Inc., demonstrates how nine airline pilots and their spouses creatively used qualified domestic relations orders (QDROs) and state domestic relations law to circumvent the retirement plan rules." (Fox Rothschild LLP)
Ex-Husband Not Liable for Retirement Account's Drop in Value, Says Court
"The Arkansas Supreme Court on Thursday struck down a circuit judge's ruling that held a man liable for the decreased market value of his ex-wife's half of his retirement account following their divorce." (Arkansas News)
[Guidance Overview] Despite Phony Divorces, Pension Plan Must Pay Spousal Benefits
"When a plan administrator fears that a DRO was fraudulently obtained, the plan administrator is not free to ignore evidence of a sham divorce. A DRO issued under false pretenses may not have been validly issued based on state domestic relations law and would, in that case, not meet the requirement of a 'domestic relations order' under ERISA Section 206(d)(3)(B)." (SmartHR)
[Guidance Overview] Fifth Circuit Agrees That Plan Administrator Cannot Revoke QDRO for Suspected Lack of Good Faith Divorce
"Although plan administrators generally are not required to analyze an order's validity under state domestic relations law, an earlier DOL advisory opinion that also addressed allegedly fraudulent divorces (but was not mentioned by the court) advised that if a plan administrator had received credible evidence that an order was fraudulently obtained, it should take reasonable steps to determine the order's credibility." (Thomson Reuters/EBIA)
The 'Splitting' [Pension] Headaches of Late-Life Divorce
"[D]ividing a nest egg in a way that allows both spouses to retire without worry is crucial when there is little work time left to make up any shortfall, says [a financial adviser]." (The Wall Street Journal)
[Guidance Overview] The Boundary of Fiduciary Responsibility
"Apparently, the court was convinced that since ERISA's recipe for qualifying a DRO as a QDRO had no subjective component, Continental had no recourse under ERISA with respect to a DRO that otherwise satisfied the objective requirements of a QDRO." (Trucker Huss, APC)
[Guidance Overview] Think Your Employee's Divorce is a Sham to Get at Retirement Benefits? Don't Out-Think Yourself
"On Monday, the Fifth Circuit issued its opinion in Brown v. Continental Airlines, Inc., 2011 WL 2780505 (5th Cir.), a rather unusual case addressing what a plan administrator's obligations are with respect to a Qualified Domestic Relations Order (QDRO) when the plan administrator thinks the underlying divorce that produced the order was a sham." (Constangy, Brooks & Smith, LLP)
[Guidance Overview] 5th Circuit Affirms Decision in Continental Sham Divorces Case
"Continental alleges that the pilots and spouses obtained 'sham' divorces for the purpose of obtaining lump sum pension distributions from the Continental Pilots Retirement Plan, which they otherwise could not have received without the pilots' separating from their employment with Continental." (PLANSPONSOR.COM)
Determination of Pension Benefits
This edition of the firm's newsletter includes several items on pension cases; see item numbers 4, 5, 6, 7 and 10. (Cypen & Cypen)
[Guidance Overview] Tribal Court Domestic Relations Orders May Be Qualified DROs (PDF)
"The DOL concluded that such tribal court orders may be recognized as QDROs provided applicable State law recognizes or treats tribal court orders as issued pursuant to state law." (Prudential Retirement)
[Guidance Overview] Orders Issued Under Tribal Law by Family Court of Navajo Nation Were Not DROs for ERISA Purposes
"ERISA ?3(10) does not include Indian tribal governments in its definition of 'state.' However, EBSA noted that nothing in ERISA ?206(d)(3) requires that a domestic relations order be issued by a state court." (Wolters Kluwer Law & Business)
[Opinion] Pension Rights Center and Other Organizations' Letter to Oklahoma State Senate Protesting Bill That Would Significantly Cut Spousal Protections for Former Military Spouses (PDF)
"There are a number of provisions in the proposed legislation that raise concerns . . ., including the treatment of benefits based on the duration of the marriage and the treatment of disability pay generally." (Pension Rights Center)
[Guidance Overview] State Law Determines Whether a Tribal Court Domestic Relations Order Can Be a QDRO
"ERISA does not require that a domestic relations order be issued by a state court; rather, it requires that the order be authorized by a state authority that the state recognizes as empowered to achieve a division of property under state domestic relations law." (Thomson Reuters/EBIA)
[Official Guidance] EBSA Advisory Opinion 2011-03A: Guidance Regarding the Applicability of Title I of ERISA
"Whether a domestic relations order issued under tribal law by a Family Court of the Navajo Nation would be a 'judgment, decree, or order . . . made pursuant to State domestic relations law,' for purposes of the QDRO provisions in ERISA section 206(d)(3)." (U.S. Employee Benefits Security Administration)
The Effects of Marital Property Rights, Alimony, Child Support, and Domestic Relations Orders on Top-Hat Plans, Excess Benefit Plans, and Bonus Plans
Excerpt: "Administrators of Top-Hat Plans (other than unfunded excess benefit plans) who make benefit payments contrary to the plan terms (which may require deference to a QDRO or to a disclaimer in a domestic relations order) may, like all ERISA plan administrators, be liable to make double payments ? the one to the wrong person and the one to the correct person ? and possibly have to pay the attorney fees of the person entitled to such payment." (Social Science Research Network)
[Guidance Overview] Ninth Circuit: State Court Has Jurisdiction to Determine Whether Domestic Relations Order Was Qualified
Excerpt: "EBIA Comment: In a footnote citing a lengthy list of court decisions, the Ninth Circuit observed that every court that has considered the question has concluded that state courts have jurisdiction to decide whether a DRO is qualified." (Employee Benefits Institute of America)
[Guidance Overview] Divorce After Retirement: Retirement Elections Can Be Carved in Stone (PDF)
2 pages. Excerpt: "The court's point is that the parties must abide by the terms and procedures of the pension plan. In the Carmona case, IATSE permitted waivers prior to retirement, not after retirement." (Brucker & Morra, APC)
State Judges Can Rule on QDRO Cases
Excerpt: "A federal appellate court has ruled that state courts can decide whether domestic relations orders . . . meet the requirements for being considered qualified domestic relations orders . . . under federal benefits law." (PLANSPONSOR.com)
[Guidance Overview] DOL Issues Final Regulations on the Timing and Order of QDROs (PDF)
2 pages. Excerpt: "The regulations provide that a plan administrator cannot disqualify a QDRO solely because it is issued after or revises another domestic relations order or QDRO, or is issued after the plan participant's death, divorce, or annuity starting date." (Buck Consultants)
[Guidance Overview] DOL Final Regulations Clarifying Rights and Obligations on Obtaining Benefits Under Qualified Domestic Relations Orders (PDF)
2 pages. Excerpt: "The regulations clarify that a DRO that otherwise meets the qualification requirements will not fail to be treated as a QDRO solely because the DRO is issued after, or revises, another DRO or QDRO." (Drinker Biddle & Reath LLP)
[Guidance Overview] DOL Final Regulations on Timing and Order of Domestic Relations Orders
Excerpt: "EBIA Comment: These final regulations, like the interim version, don't deviate from the narrow Congressional directive under which they were created. But it is useful to have the DOL clarify that the general principles -- not the specific examples -- are what matter." (Employee Benefits Institute of America)
[Guidance Overview] DOL's Final Regulations Relating to Time and Order of QDROs (PDF)
2 pages. Excerpt: "The regulations, which are effective July 30, 2010, are substantially similar to the interim final rule, but several changes were made to the examples, and one additional example was added." (Sutherland Asbill & Brennan LLP)
[Official Guidance] Text of Final DOL Regs on Timing Aspects of Qualified Domestic Relations Orders, Per PPA 2006 (PDF)
7 pages. Excerpt: "[A] domestic relations order otherwise meeting ERISA's requirements to be a QDRO shall not fail to be treated as a QDRO solely because the order is issued after, or revises, another domestic relations order or QDRO . . . [or] . . . because of the time at which it is issued . . . [such as a QDRO that is] issued after the death of the participant . . . [or] . . . after the parties divorce . . . [or] . . . after the participant's annuity starting date." (U.S. Employee Benefits Security Administration)
[Official Guidance] Text of Final Rule Relating to Time and Order of Issuance of Domestic Relations Orders (PDF)
Excerpt: "The rule provides guidance to plan administrators, service providers, participants, and alternate payees on the qualified domestic relations order (QDRO) requirements under ERISA. The rule is being adoptedin response to the specific statutory directive contained in the PPA." (U.S. Employee Benefits Security Administration via The SPARK Institute)
Chart of DOL's 2010 Regulatory Agenda for Employee Benefit Matters (PDF)
3 pages. Excerpt: "DOL's agenda and related materials include 20 pending projects related to employee benefits, which are listed below in order of the projected timetable for next steps. (In the ordinary course, dates projected in the agenda may prove ambitious.) New projects highlighted by DOL are shown in bold." (Sutherland)
[Guidance Overview] Final QDRO Regulation Expected Soon from DOL
Excerpt: "The U.S. Department of Labor (DOL) plans to publish a final regulation in April clarifying the rights and obligations of parties seeking to obtain benefits under a qualified domestic relations order (QDRO). Specifically, the rule will clarify that a domestic relations order (DRO) otherwise meeting the requirements to be a QDRO shall not fail to be treated as a QDRO solely because the order is issued after, or revises, another DRO or QDRO, or because of the time at which it is issued." (Thompson Publishing Group Inc.)
Battles Over Retirement Assets Increasingly the Most Contentious?and Error-Filled?Part of Divorce
Excerpt: "[A qualified domestic relations order, or a] QDRO, as it's called, helps divide a couple's retirement assets in the wake of a divorce. Such an order, for instance, would permit the custodian of a 401(k) to make payments to the former spouse of an employee. As straightforward as that might sound, a QDRO is about much more than dividing dollars. A retirement plan will need a court order to carry out your wishes, and those wishes had better be spelled out in painstaking detail. What's more, retirement accounts are frequently the largest asset in a divorce proceeding. Given the precarious health of such accounts in the wake of the recession, every penny becomes critical." (The Wall Street Journal)
[Guidance Overview] Who is Entitled to Life Insurance Benefits and Top-Hat Benefits from an ERISA Plan Following Divorce or Marital Separation?
Excerpt: "ERISA plans generally need not follow state-court orders. On the other hand, ERISA plans must follow the designation terms of those DROs that are qualified domestic relations orders ('QDROs'). Questions have been raised about whether life insurance plans and top-hat plans (which are pension plans maintained primarily for the purpose of providing deferred compensation for a select group of management or highly compensated employees) must follow the designation terms of a DRO that 'satisfies the QDRO requirements,' but contradicts a designation made pursuant to the plan terms." (Social Science Research Network)
[Guidance Overview] Who is Entitled to Life Insurance Benefits and Top-Hat Benefits from an ERISA Plan Following a Divorce or a Marital Separation?
Excerpt: "ERISA plans generally need not follow state-court orders. On the other hand, ERISA plans must follow the designation terms of those DROs which are qualified domestic relations orders ('QDROs'). Questions have been raised about whether life insurance plans and top-hat plans (which are pension plans maintained primarily for the purpose of providing deferred compensation for a select group of management or highly compensated employees), must follow the designation terms of a DRO that 'satisfies the QDRO requirements,' but contradicts a designation made pursuant to the plan terms." (NYSBA Family Law Review Newsletter via Social Science Research Network)
[Guidance Overview] State Courts Have Jurisdiction to Determine Whether a Domestic Relations Order Is Qualified
Excerpt: "EBIA Comment: As noted in our earlier article, we find the court's view -- that state and federal courts have concurrent jurisdiction over challenges to a plan administrator's QDRO determination -- compelling and consistent with the many published cases on this issue. The court acknowledged that the DOL reached a different conclusion in its publication explaining QDROs, but refused to defer to the DOL's interpretation, noting that the publication was not an official regulatory interpretation and that, in any event, the jurisdiction issue was a pure question of law on which no deference to the DOL was necessary." (Employee Benefits Institute of America)
[Guidance Overview] No Mention of Pension in Prenup Doesn't Entitle Wife to Benefits
Excerpt: "A Florida appeals court has found that an ex-spouse was not being deceitful when he failed to list a pension account in a prenuptial agreement." (PLANSPONSOR.com)
[Guidance Overview] State, Federal Courts Share ERISA QDRO Jurisdiction, According to Ruling
Excerpt: "The Minnesota Supreme Court has ruled that both state and federal courts have legal jurisdiction to enforce qualified domestic relations orders (QDRO) giving an alternate payee a portion of a participant's plan balance." (PLANSPONSOR.com)
[Official Guidance] Court Rules State and Federal Courts Have Concurrent Jurisdiction to Review Plan Administrator's Determination of Whether a Domestic Relations Order Is 'Qualified' for Purposes of ERISA
Excerpt: "The question presented in this case is whether state courts have subject matter jurisdiction under the Employee Retirement Income Security Act (ERISA) to review a plan administrator's determination that a proposed qualified domestic relations order (QDRO) is not 'qualified' for purposes of ERISA." (Leagle, Inc.)
[Guidance Overview] Pending Divorce Does Not Require Spousal Consent for SERP Payout, According to Ruling
Excerpt: "Although the SERP was presumably a defined benefit arrangement, the court concluded that ERISA's qualified joint and survivor annuity rules, which require a participant's spouse's consent to the election of a form of benefit other than a QJSA, did not apply. That was because the SERP was a top hat plan, and top hat plans are not subject to ERISA's survivor annuity rules. (The United Way actually denied that a SERP existed and maintained instead that the $2 million was paid pursuant to a separation agreement, but the court assumed for purposes of its ruling that a SERP did exist.)" (Utz, Miller & Eickman, LLC)
QDROs Can Be Particularly Problematic When Plan Assets Contain Employer Securities
Excerpt: "Divorce is messy. Even once the settlement agreement has been reached, signed and filed with the court, our client still faces one remaining hurdle; the dreaded Qualified Domestic Relations Order (QDRO)." (Morningstar)
[Guidance Overview] Plan Administrator Cannot Consider Motivation for Participants' Divorces When Determining Status of QDRO
Excerpt: "EBIA Comment: Plan administrators generally are not required to analyze whether a divorce order is valid under state domestic relations law. However, according to a prior DOL advisory opinion (also addressing allegedly sham divorces by pilots), if there is credible evidence that the order has been procured through fraud, plan administrators should take appropriate steps to resolve the validity of the order. Those steps will depend on the facts and circumstances, and could include relaying the evidence of fraud to the court or agency that issued the order. But if requested guidance from the court or agency is not received within a reasonable time, the plan administrator must proceed with determining the validity of the order (in other words, the plan administrator may not independently determine that the order is not valid under state law). Because these issues can be complex and fact-specific, plan administrators faced with potentially fraudulent QDROs may wish to seek the advice of experienced legal counsel." (Employee Benefits Institute of America)
[Opinion] Divorce and Pensions: Continental Style
Excerpt: "This is one of the great ERISA stories of all time - its like something out of a Boston Legal episode. I am speaking, of course, of the case, detailed here, of the Continental pilots who, concerned that the retirement plan may go belly up long before they retire, divorced their wives, executed QDROs transferring the retirement benefit to their now ex-spouses, after which the ex-wives took out lump sum payments, as the plan allowed. . . . [L]urking in the background, behind the entertaining fact pattern (entertaining, at least, to ERISA lawyers): the fact that we have a retirement system that is so tenuous that employees feel it is necessary to go to lengths such as this to protect themselves. That is the more significant issue that needs addressing, much more so than whether plan terms or QDRO requirements should be able to be manipulated in such a manner." (Stephen Rosenberg of The McCormack Firm, LLC)
Judge Throws Out Continental's Suit Against Divorced Pilots
Excerpt: "We wrote this summer about Continental Airlines' decision to sue some of its pilots who, the company thought, had undergone bogus divorces in order to get some pension benefits. The pilots were still in love, the airline essentially argued, and therefore shouldn't be getting the early pensions that come with divorce (and what kind of anti-marriage stance is that, Continental?) A federal judge here ruled against the airline today, saying that no one knows what is in another's heart. Or something like that." (Village Voice Media )
[Opinion] Did a Unanimous Supreme Court Misread ERISA, Misread the Court's Precedents, Undermine Basic ERISA Principles, and Encourage Benefits Litigation?
Excerpt: "In Kennedy v. Plan Administrator of the DuPont Savings and Investment Plan (the 'Kennedy Decision'), a unanimous Supreme Court appeared to proclaim a 'bright-line rule' that plan documents determine benefit distribution rights. However, by misreading ERISA and its own precedents, the Supreme Court needlessly undermined basic ERISA principles with respect to the determination and the protection of ERISA benefit entitlements, the coverage of the prohibition on the alienation of pension benefits (the 'Alienation Prohibition') and the rules pertaining to QDROs." (Social Science Research Network)
[Guidance Overview] No COBRA for Former Spouse Who Did Not Provide Timely Notice of Divorce
Excerpt: "EBIA Comment: Other courts have held that a plan with 'inquiry notice' of a qualifying event must send a COBRA election notice. A plan has inquiry notice when the covered employee or the qualified beneficiary has given enough information about the occurrence of the qualifying event to allow the plan administrator, upon due inquiry, to reasonably ascertain that a qualifying event has occurred. But as this court concluded, knowledge of a pending divorce is not knowledge of a qualifying event since the actual entry of a divorce decree is the triggering event for the COBRA qualifying event of divorce. The outcome might have been different if the plan had inquiry notice of a final divorce." (Employee Benefits Institute of America)
[Guidance Overview] QDRO Cannot Override ERISA Rules for COBRA and Retirement Benefits
Excerpt: "The U.S. District Court for the Eastern District of Pennsylvania has ruled that the former spouse of an employee cannot get continued health care benefits as dictated by a qualified domestic relations order (QDRO) because the plan was not notified of her divorce within the 60-day notice requirement for a qualifying event under the Consolidated Omnibus Budget Reconciliation Act (COBRA)." (PLANSPONSOR.com; free registration required)
[Opinion] Comments on Proposed Legislation in Oklahoma Relating to Treatment of Military Retired Pay at Time of Divorce (PDF)
2 pages. Excerpt: "Together with the National Women's Law Center, the PRC sent a letter to the Oklahoma state legislature expressing concerns about proposed legislation that would change the way Oklahoma state courts divide military pension benefits." (Peinsion Rights Center)
[Opinion] QDROs, the Drainville Decision, and Albert Feuer
Excerpt: "I don't think anyone has made as sustained a study of the law of QDROs as Albert Feuer. Albert has a new piece he has authored on the Drainville decision, which I discussed here, in which Albert concurs that it is both well reasoned and accurate in treating substantial compliance with the statutory QDRO requirements as sufficient. Albert, however, has long maintained a particular scholarly view on the QDRO requirements, which is that they only apply to pensions under the statutory language, and don't reach other ERISA governed plans or benefits. Albert points out that the Drainville court erred in its analysis for this reason." (Stephen Rosenberg of The McCormack Firm, LLC)
[Guidance Overview] Qualified Domestic Relations Orders Issues
Excerpt: "Pension and retirement benefits earned during a couple's marriage are of great value. It's not uncommon for couple's that have been married for a long-time to build up significant pension or retirement benefits, which can be worth considerable value in their marital assets. When splitting up these assets a Qualified Domestic Relations Order (QDRO) will be needed to receive all or a portion of qualified plan benefits from an ex-spouse." (Examiner.com)
Continental Says Pilots Got Sham Divorces
Excerpt: "Excerpt: 'Continental Airlines is suing nine pilots that it says got sham divorces so their ex-spouses could collect their retirement benefits while they kept flying. The airline said the pilots -- seven men and two women -- got divorces but concealed that from children and friends, then remarried their spouses after getting the money. The company said it paid out $10 million to $11 million in suspicious pension distributions.'" (AP via The New York Times; free registration required)
[Guidance Overview] AT&T Did not Improperly Delay QDRO Payment
Excerpt: "The U.S. District Court for the Eastern District of Missouri has found that AT&T Inc.'s pension plan administrator did not act improperly by not immediately paying lump-sum benefits to an employee's ex-wife under two domestic relations orders. According to the court opinion, neither the first domestic relations order (DRO) nor an amended DRO entitled Sigrid V. Green to the immediate payment of pension benefits. The court determined Green was entitled to a calculated portion of her ex-husband's pension benefits on the earlier of his retirement date, even if he has not yet retired, or when he elects to start receiving benefits." (PLANSPONSOR.com; free registration required)
Divorce and Retirement: How to Take Control of Retirement Benefits (PDF)
Excerpt: "When you're in the midst of a divorce, you have to juggle so many things. . . . One practical issue that women often overlook is getting a fair share of retirement assets. Retirement funds may be among the biggest assets you have as a couple. It's important to know that these funds are not automatically split in a divorce." (The Women's Institute for a Secure Retirement)
[Guidance Overview] Divorce and Retirement: Take Control of Retirement Benefits (PDF)
20 pages. Excerpt: "Let's start with the fact that retirement benefits are not automatically split during a divorce. Just like other marital assets, a divorce court judge or an agreement between you and your spouse divides the benefits. Find out as much as you can about the benefits earned by you and your husband during the marriage. Then make sure you and your lawyer protect your right to those benefits." (Women?s Institute for a Secure Retirement (WISER))
[Guidance Overview] Feuer on the Kennedy Case
Excerpt: "Albert Feuer, who has provided us with valuable analysis of Kennedy v. DuPont as it was pending before the Supreme Court, has now done the same for the Court's final decision. He will have a more extensive discussion of the case in his article, 'Will the Supreme Court Reinforce or Undermine Basic ERISA Principles When it Decides a Death Benefit Dispute,' which is to be published soon in the Charleston Law Review. In the meantime, he's prepared a shorter analysis of the case." (Workplace Prof Blog)
[Guidance Overview] QDRO Awarding Pension Benefits to Domestic Partner in 'Quasi-Marital Relationship' Upheld on Appeal
Excerpt: "EBIA Comment: The Ninth Circuit looked to state law to define what constitutes 'marital property rights' for QDRO purposes. In so doing, the court rejected the plan's claim that 'marital property rights' for this couple could not exist because they were not married within the meaning of the federal Defense of Marriage Act (DOMA). While the court's conclusion in this case -- in the context of opposite-sex partners -- is relatively straightforward (as the court noted: 'DOMA's legislative history reflects only Congress's concern for same-sex marriages'), it begs the question of how this case might have been decided if the partners were same-sex partners and the DOMA argument not so easily dismissed." (Employee Benefits Institute of America)
[Guidance Overview] Plan Administrator Properly Followed Plan Documents and Paid Ex-Spouse Despite Divorce Decree Waiver
Excerpt: "EBIA Comment: In relying on the plan document rule, while also addressing the anti-alienation arguments, the Court resolved prior splits among lower courts on both of these issues. This decision brings welcome uniformity to plan administrators who have been faced with uncertainty about whether to honor divorce decree waivers, allowing them now to rely on plan documents to determine beneficiaries. The Court acknowledged that less certain rules would force plan administrators to review 'a multitude' of external documents purporting to waive benefits and face increased risk of being drawn into costly litigation." (Employee Benefits Institute of America)
[Guidance Overview] Supreme Court Clarifies That a Former Spouse's Benefits Are Governed by Plan's Express Terms
Excerpt: "To assist plan administrators and employers in utilizing the Kennedy decision to make benefit administration less complicated, employers need to review the terms of their benefit plans to ensure that the benefit distribution rules and beneficiary designation provisions are clear and unambiguous. Also, other important plan-related forms, such as beneficiary designation forms, should be reviewed to insure that they are clear and properly notify participants of the decisions they are undertaking." (McDermott Will & Emery)
[Guidance Overview] Order Awarding Pension Benefits After 30-Year 'Quasi-Marriage' Constituted a QDRO
Excerpt: "A court order awarding pension benefits following the dissolution of a 30-year 'quasi-marriage' constituted a qualified domestic relations order (QDRO) under ERISA. This was the decision of the Ninth Circuit U.S. Court of Appeals in Owens v. Automotive Machinists Pension Trust (No. 07-35253)." (Wolters Kluwer)
[Guidance Overview] Supreme Court Upholds Distribution to Former Spouse Despite Divorce Decree
Excerpt: "In ruling for the plan administrator, the Court resolved conflicting opinions from the lower courts and stressed the need for plan administrators to be able to rely on the plan's own administrative procedures in determining who is entitled to a deceased participant's benefit, and not to be required to interpret other documents that might contradict the participant's beneficiary designation on file with the plan. The participant in this case, the Court held, had ample opportunity to change his beneficiary designation and had failed to do so." (Seyfarth Shaw LLP)
[Official Guidance] Text of U.S. Supreme Court Decision Denying Death Benefits to Surviving Ex-Spouse (PDF)
22 pages. Excerpt (from the opinion's syllabus): 'Under the terms of the plan, if there is no sur-viving spouse or designated beneficiary at the time of death, distribu-tion is made as directed by the estate's executor or administrator. Upon their marriage, William designated Liv Kennedy his SIP bene-ficiary and named no contingent beneficiary. Their subsequent di-vorce decree divested Liv of her interest in the SIP benefits, but Wil-liam did not execute a document removing Liv as the SIP beneficiary.On William's death, petitioner Kari Kennedy, his daughter and theexecutrix of his Estate, asked for the SIP funds to be distributed to the Estate, but the plan administrator relied on William's designa-tion form and paid them to Liv." (U.S. Supreme Court via American Benefits Council)
[Guidance Overview] Supreme Court Sides With DuPont in $400K Pension Plan Case
Excerpt: "The U.S. Supreme Court said Monday that DuPont Co. ( DD) was correct to pay a deceased worker's retirement benefits to his ex-wife even though she had renounced her rights to the pension during divorce proceedings." (Dow Jones via CNNMoney.com)
[Guidance Overview] Supreme Court Rules for Employer in Pension Dispute Over Death Benefit
Excerpt: "The justices, in a unanimous decision Monday, said Kari Kennedy can collect nothing from DuPont because companies are bound by what a worker puts down on forms designating who is to receive retirement and other benefits after his death. " (AP via SignOnSanDiego.com)
[Guidance Overview] State Court Lacks Jurisdiction to Determine Whether a DRO Is a QDRO, According to Appeals Court
Excerpt: "EBIA Comment: The DOL's view that only federal courts have jurisdiction to determine whether a DRO is qualified, is found in a set of frequently asked questions (FAQs) addressing various QDRO issues (available at http://www.dol.gov/ebsa/faqs/faq_qdro.html). As we have previously noted, however, we find more compelling the view that an alternate payee's lawsuit challenging a plan administrator's QDRO determination is a claim for plan benefits under ERISA Section 502(a)(1)(B) over which state and federal courts have concurrent jurisdiction, although if filed in state court, the plan should be able to remove the state court action to federal court, regardless of how the claim is pled in the complaint, pursuant to the 'complete preemption' doctrine . . . ." (Employee Benefits Institute of America)
State Courts Cannot Determine If Domestic Relations Order Is Qualified Under ERISA
Excerpt: "The Minnesota Court of Appeals has overturned a lower court's decision that a domestic relations order (DRO) was a qualified domestic relations order (QDRO), saying the lower court did not have the jurisdiction to make that determination. According to EBIA, the court cited the Department of Labor's view that federal courts have exclusive jurisdiction to determine whether a DRO is a QDRO." (PLANSPONSOR.com; free registration required)
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