Kennedy v. Plan Administrator For Dupont Savings And Investment Plan

555 U.S. 285 (2009)

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Nature of the Case

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Facts

William worked for DuPont de Nemours & Company and was a participant in its savings and investment plan (SIP), with power both to 'designate any beneficiary or beneficiaries . . . to receive all or part' of the funds upon his death, and to 'replace or revoke such designation.' The SIP is an ERISA ''employee pension benefit plan. ERISA requires it to 'provide that benefits provided under the plan may not be assigned or alienated. A beneficiary may submit a 'qualified disclaimer' of benefits as defined under the Tax Code, see 26 U.S.C. § 2518, which has the effect of switching the beneficiary to an 'alternate . . . determined according to a valid beneficiary designation made by the deceased. In 1971, William married Liv and, in 1974, he signed a form designating her to take benefits under the SIP, but naming no contingent beneficiary to take if she disclaimed her interest. William and Liv divorced in 1994, subject to a decree that Liv 'is . . . divested of all right, title, interest, and claim in and to . . . any and all sums . . . the proceeds [from], and any other rights related to any . . . retirement plan, pension plan, or like benefit program existing by reason of [William's] past or present or future employment.' William did not execute any documents removing Liv as the SIP beneficiary, even though he did execute a new beneficiary-designation form naming his daughter, P, as the beneficiary under DuPont's Pension and Retirement Plan, also governed by ERISA. On William's death P was named executrix and asked D to distribute the SIP funds to William's estate. D paid the balance of some $400,000 to Liv. P then sued D claiming that the divorce decree amounted to a waiver of the SIP benefits on Liv's part, and that D had violated ERISA by paying the benefits to William's designee. The District Court entered summary judgment for P, to which it ordered D to pay the value of the SIP benefits. The court relied on Fifth Circuit precedent establishing that a beneficiary can waive his rights to the proceeds of an ERISA plan ''provided that the waiver is explicit, voluntary, and made in good faith.'' The Fifth Circuit reversed holding that Liv's waiver constituted an assignment or alienation of her interest in the SIP benefits to the Estate, and so could not be honored. The Supreme Court granted certiorari to resolve a split among the Courts of Appeals and State Supreme Courts over a divorced spouse's ability to waive pension plan benefits through a divorce decree not amounting to a QDRO.