Fast on the heels of LaRue and MetLife, the U.S. Supreme Court is taking a look at another ERISA case – Kennedy v. Plan Administrators for DuPont Savings and Investment Plan, No. 07-636. The Petitioner, the estate of the participant, is required to file their merit brief today with the Court.
Kennedy is a case from the 5th Circuit Court of Appeals. In 1971, while employed by DuPont, Kennedy married Mrs. Kennedy. In 1974, Kennedy signed a beneficiary designation form identifying Mrs. Kennedy as his sole beneficiary for plan purposes. Mr. and Mrs. Kennedy divorced in 1994, and Mrs. Kennedy agreed to “be divested of all right, title, interest, and claim in or to … the proceeds therefrom, and any other rights related to any …. retirement plan, pension plan, or like benefit program existing by reason of” Mr. Kennedy’s employment. A QDRO was issued in 1997 providing disbursement instructions for Mr. Kennedy’s employee benefits plans but failed to include disbursement instructions for the DuPont Savings and Retirement Plan.
Mr. Kennedy retired from DuPont in 1998 and died in 2001, without ever executing another beneficiary form replacing Mrs. Kennedy as his beneficiary for purposes of the DuPont Savings and Retirement Plan. Mr. and Mrs. Kennedy’s daughter, Kari, was appointed executrix of Mr. Kennedy’s estate, and sent a letter to DuPont demanding that Mr. Kennedy’s account balance in the DuPont Savings and Retirement Plan be distributed to the estate. Kari Kennedy put DuPont on notice that the estate claimed the funds pursuant to Texas Family Code section 9.302, which generally provides that a spouse’s designation as a retirement plan beneficiary is invalidated by a subsequent divorce. Mrs. Kennedy also made a claim on DuPont for Mr. Kennedy’s account balance, which DuPont paid to her based on the designation of beneficiary signed by Mr. Kennedy. The estate then filed an action to recover Mr. Kennedy’s account balance, and DuPont filed a third-party claim, asserting that if Mrs. Kennedy was not the correct beneficiary, the plan was entitled to have the account balance returned to the plan. The trial court granted summary judgment in favor of the estate, and Mrs. Kennedy appealed.
The 5th Circuit vacated the trial court’s grant of summary judgment in favor of the estate, and rendered judgment for DuPont. The 5th Circuit reasoned that, as a QDRO for the DuPont Savings and Retirement Plan was never submitted to DuPont, and as QDROs are the specific mechanism provided by ERISA for addressing the elimination of a spouse’s interest in plan benefits, and as that mechanism was not invoked, therefore requiring DuPont to recognize the waiver in this situation would conflict with ERISA by determining rights to pension plan benefits in a manner not authorized by the QDRO provisions.
The estate then appealed the 5th Circuit’s decision to the U.S. Supreme Court, and will file their merit brief today. The Court has not set oral argument yet for this case.
Additional Information:
- Petition for Cert. filed by the estate and Brief in Opposition, courtesy of SCOTUSblog.
[tags]Pension Protection Act, ppa, Kennedy, DuPont, QDRO, Supreme Court, ERISA[/tags]
