Sunday, February 8, 2009

Feuer on the Supreme Court's Approach to Death Benefits

Supreme_court As we mentioned earlier, Albert Feuer's article, “Will the Supreme Court Reinforce or Undermine Basic ERISA Principles When it Decides a Death Benefit Dispute,”  will soon be published in the Charleston Law Review (Vol 3, p. 289, 2009).  The article is now on SSRN.  A brief summary of the article:

The article suggests an approach different than the one taken by the Supreme Court in Kennedy v. Plan Administrator for DuPont Savings & Investment Plan, 2009 U.S. LEXIS 869 (January 26, 2009) or the approaches advocated by the parties in that case.  First, the article states that a domestic relations order determines entitlements to benefits from pension plans subject to the ERISA prohibition against benefits, if and only if the order is a qualified domestic relations order.  Plan documents are irrelevant to the determination of whether a domestic relations order determines benefit entitlements.  Second, the article states that the terms of ERISA pension plans and ERISA life insurance plans determine which of two disputing parties are entitled to plan benefits.  The article also argues that it is inadvisable for ERISA plans to provide that the designation of a participant's spouse as the beneficiary be revoked upon the divorce of the participant because in such case the plan may be forced to pay the benefits twice if the domestic relations order is not a qualified domestic relations order.  Further, such a provision may violate the ERISA prohibition on the alienation of benefits applicable to most pension plans.

This appears to be the go-to article on Kennedy, so it's well worth the read.


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