A Curious ERISA Case Before the Supreme Court Becomes More Confused
5 Pages Posted: 1 Dec 2008
Date Written: November 20, 2008
Abstract
Kennedy v. DuPont Savings Plan Administrator, No. 07-636 has become even more confused. The estate of a participant (William Kennedy denoted as William) claimed to be entitled to receive William's death benefit on the ground that the designated beneficiary and his former spouse (Liv Kennedy) had waived her right to receive the benefit thereby entitling William's estate, as contingent beneficiary, to that benefit. The waiver was part of a domestic relations order that was not a QDRO.
After hearing the oral argument the Supreme Court requested and received confusing supplemental briefs that were supposed to discuss in effect the question whether the waiver could be effective if the death benefits came from a life insurance plan, which is not subject to the prohibition on the alienation of benefits that is applicable to the death benefit from the pension plan at issue.
The Supreme Court may still be able to discern three ERISA core principles from all the briefs that have been filed in this case and from the oral argument. First, ERISA benefit entitlements are determined by Plan terms. Second, ERISA protects benefit entitlement after the plan has paid the benefits. Third, the QDRO Provisions apply to all DROs pertaining to pension plans. The Court may reinforce each principle by using them explicitly in a decision on behalf of the Plan administrator.
Keywords: ERISA, survivor, claim, marital, Supreme Court, QDRO, divorce, retirement benefits, benefit designations, life insurance, pension
JEL Classification: 32, K31, K32, M52
Suggested Citation: Suggested Citation