News & Insights

A Surviving Spouse’s Right to Retirement Plan Benefits
June 28, 2013
by Marcellus Lebbin

 

South Bend / Mishawaka, IN – There has been significant litigation surrounding the question of who is entitled to ERISA retirement plan benefits. Spouses who have been passed over for children or other named beneficiaries often find themselves in the difficult position of fighting for their deceased spouse’s qualified benefits despite the ERISA requirement that plan administrators pay a participant’s surviving spouse unless a valid spousal waiver is filed with the administrator. This requirement of ERISA § 205 attempts to ensure that surviving spouses, even from second or third marriages, collect retirement benefits over other named beneficiaries of qualified retirement accounts. ERISA allows a surviving spouse to be passed over only if the surviving spouse knowingly signs a valid spousal waiver. While this ERISA rule seems simple, there has been significant litigation between the surviving spouse and children over who is entitled to the qualified retirement accounts upon a plan participant’s death.

In Kennedy v. The Plan Administrator for Dupont Savings and Investment Plan, the United States Supreme Court gave guidance on how waivers in ERISA plans are to be interpreted. The Court said that compliance with the requirement for a valid waiver must be ascertainable from the four corners of the waiver. Despite this bright-line rule from the United States Supreme Court, the facts and circumstances underlying if and how a spousal waiver was signed are still determining factors in decisions of the lower courts. These factors sometimes blur the Supreme Court’s bright-line rule and impact another court’s decision. Witness requirements are often subject to fact inquiries by Federal Courts, and individuals who are dealing with questions regarding the validity of a spousal waiver must be prepared with evidence of both the spousal waiver itself and the facts surrounding how the waiver was signed.

Even where there is no spousal waiver, if a valid prenuptial agreement exists, children of a deceased spouse can seek to enforce the prenuptial agreement and recover the retirement account assets in a state court action. So, while a plan administrator may pay the proceeds of the decedent’s retirement account to the surviving spouse based upon the fact no waiver was signed, the children may still prevail in recovering the value of the account in an action to enforce the contractual provisions of the prenuptial agreement.

 

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