Ex-wife can keep deceased ex-husband’s retirement plan proceeds
Here is an excerpt from the syllabus of this unanimous opinion authored by Justice Souter:
The Employee Retirement Income Security Act of 1974 (ERISA), as relevant here, obligates administrators to manage ERISA plans “in accordance with the documents and instruments governing” them, 29 U. S. C. §1104(a)(1)(D); requires covered pension benefit plans to “provide that benefits . . . may not be assigned or alienated,” §1056(d)(1); and exempts from this bar qualified domestic relations orders (QDROs), §1056(d)(3).
The decedent, William Kennedy, participated in his employer’s savings and investment plan (SIP), with power both to designate a beneficiary to receive the funds upon his death and to replace or revoke that designation as prescribed by the plan administrator. Under the terms of the plan, if there is no surviving spouse or designated beneficiary at the time of death, distribution is made as directed by the estate’s executor or administrator.
Upon their marriage, William designated Liv Kennedy his SIP beneficiaryand named no contingent beneficiary. Their subsequent divorce decree divested Liv of her interest in the SIP benefits, but William did not execute a document removing Liv as the SIP beneficiary.
On William’s death, petitioner Kari Kennedy, his daughter and the executrix of his Estate, asked for the SIP funds to be distributed to the Estate, but the plan administrator relied on William’s designation form and paid them to Liv.
The Estate filed suit, alleging that Liv had waived her SIP benefits in the divorce and thus respondents, the employer and the SIP plan administrator (together, DuPont), had violated ERISA by paying her. As relevant here, the District Court entered summary judgment for the Estate, ordering DuPont to pay the benefits to the Estate. The Fifth Circuit reversed, holding that Liv’s waiver was an assignment or alienation of her interest to the Estate barred by §1056(d)(1).
Held:
1. Because Liv did not attempt to direct her interest in the SIP benefits to the Estate or any other potential beneficiary, her waiver did not constitute an assignment or alienation rendered void under §1056(d)(1). * * *
2. Although Liv’s waiver was not nullified by §1056’s express terms, the plan administrator did its ERISA duty by paying the SIP benefits to Liv in conformity with the plan documents. ERISA pro-vides no exception to the plan administrator’s duty to act in accordance with plan documents. Thus, the Estate’s claim stands or falls by “the terms of the plan,” 29 U. S. C. §1132(a)(1)(B), a straight forward rule that lets employers “ ‘establish a uniform administrative scheme, [with] a set of standard procedures to guide processing of claims and disbursement of benefits,’ ” Egelhoff v. Egelhoff, 532 U. S. 141, 148. By giving a plan participant a clear set of instructions for making his own instructions clear, ERISA forecloses any justification for enquiries into expressions of intent, in favor of the virtues of adhering to an uncomplicated rule. Less certain rules could force plan administrators to examine numerous external documents purporting to be waivers and draw them into litigation like this over those waivers’ meaning and enforceability. The guarantee of simplicity is not absolute, since a QDRO’s enforceability may require an administrator to look for beneficiaries outside plan documents notwithstanding §1104(a)(1)(D). But an administrator enforcing a QDRO must be said to enforce plan documents, not ignore them, and a QDRO enquiry is relatively discrete, given its specific and objective criteria. These are good and sufficient reasons for holding the line, just as the Court did in holding that ERISA preempted state laws that could blur the bright-line requirement to follow plan documents in distributing benefits. See Boggs, supra, at 850, and Egelhoff, supra, at 143. What goes for inconsistent state law goes for a federal common law of waiver that might obscure a plan administrator’s duty to act “in accordance with the documents and instruments.” * * *
This case points out the wisdom the plan documents rule. Under the SIP, Liv was William’s designated beneficiary. The plan provided a way to disclaim an interest in the SIP account, which Liv did not purport to follow. The plan administrator therefore did exactly what §1104(a)(1)(D) re-quired and paid Liv the benefits.