Legal Alert: Supreme Court Unanimously Adopts an "Uncomplicated rule" - Plan Administrators Should Pay Benefits in Accordance with the Terms of the Plan

more+
less-

ERISA typically has been a minefield for fiduciary compliance. This has been particularly true when a plan administrator must decide which of two competing claims should be paid when the plan participant is deceased. This week, the United States Supreme Court issued an "uncomplicated," bright line rule for plan administrators to follow in these situations. The Court held that a plan administrator meets its ERISA duty when it pays benefits according the plan documents. Specifically, the Court approved the payment by a plan administrator to the beneficiary named by the participant, despite the fact that the beneficiary was the former spouse of the participant who had waived her right to the benefits in a divorce decree. ERISA generally requires that a covered pension benefit plan "provide that benefits . . . under the plan may not be assigned or alienated." 29 U.S.C. §1056(d)(1). But there is a specific exception to this requirement for rights created under a Qualified Domestic Relations Order (QDRO). 29 U.S.C. §1056(d)(3). Notwithstanding this provision, many plan participants – and their attorneys – do not obtain QDROs. Instead, they often assume that language in their divorce decrees will suffice.

Please see full alert for more information.

LOADING PDF: If there are any problems, click here to download the file.

Written by:

more+
less-

FordHarrison on:

JD Supra Readers' Choice 2016 Awards
Reporters on Deadline

"My best business intelligence, in one easy email…"

Your first step to building a free, personalized, morning email brief covering pertinent authors and topics on JD Supra:

Sign up to create your digest using LinkedIn*

*By using the service, you signify your acceptance of JD Supra's Privacy Policy.

Already signed up? Log in here

*With LinkedIn, you don't need to create a separate login to manage your free JD Supra account, and we can make suggestions based on your needs and interests. We will not post anything on LinkedIn in your name. Or, sign up using your email address.
×
Loading...
×
×