A DuPont employee originally designated his wife as the alternative beneficiary for his pension benefit plan. When the couple later divorced, the wife waived her right to the employee’s pension benefits as part of the divorce settlement, but did not file a Qualified Domestic Relations Order (QDRO) with the employer.
After the employee died, DuPont paid the employee’s pension benefits to his ex-wife pursuant to her designation as beneficiary. The employee’s estate sued DuPont to collect the pension benefits, with DuPont suing the ex-wife to recover the money it had paid her.
The district court awarded the employee’s pension benefits to his estate. The Fifth Circuit reversed, holding that the wife’s rights as a beneficiary under ERISA can only be waived when a QDRO is filed. Other circuits had recognized divorce settlements without requiring a QDRO in these circumstances. The Supreme Court agreed 2/19/08 to decide whether the plan administrator may rely on a divorce settlement or only on a valid QDRO.
The NAM filed an amicus brief 7/15/08, arguing that requiring a QDRO is important for ease of plan administration, since administrators will not need to look beyond the plan documents and QDROs to pay claims, will have lower investigation costs, and will incur less litigation from beneficiaries. Congress provided a comprehensive, specific administrative regime regarding spousal rights and beneficiary designations under ERISA plans, and it did not intend for courts to fashion common law rules that require plan administrators to find and honor waivers in other ways.
On 1/26/09, the Supreme Court unanimously ruled that a plan administrator may only rely on a valid QDRO to change the beneficiary of an ERISA pension benefit plan. The Court held that "ERISA forecloses any justification for enquiries into nice expressions of intent, in favor of the virtues of adhering to an uncomplicated rule: 'simple administration, avoid[ing] double liability, and ensur[ing] that beneficiaries get what's coming quickly.'''