A Curious ERISA Case Before the Supreme Court

Abstract

The filings in Kennedy v. Plan Administrator for DuPont Savings and Investment Plan, 497 F.3d 426 (5th Cir. 2007), cert. granted, 2008 U.S. LEXIS 1291 (U.S. Feb. 19, 2008) are complete, and oral argument is scheduled for October 7, 2008.

The case, which is a dispute about who is entitled to a participant's death benefits, has many curious elements. In my view, neither party addresses the certified question which refers to the entitlements of an ERISA beneficiary rather than the payment obligations of an ERISA plan administrator. The AARP amicus brief suggests that ERISA should no longer protect entitlements to retirement benefits after their distribution. Under the approach of the amicus brief of the United States, that the Department of Treasury, the Internal Revenue Service, and the Department of Labor presented, for which the Solicitor General was the counsel of record, divorcing spouses may not retain spousal survivor benefits with qualified domestic relations orders ("QDROs"), even though Congress introduced QDROs for this very purpose, because the United States approach limits QDROs to orders that transfer benefit rights and no right is transferred if rights are retained.

The result may be a Supreme Court decision or dicta that substantially change basic ERISA provisions with respect to benefit entitlements, benefit designations, the alienation prohibition and QDROs

Keywords: ERISA, survivor, claim, marital, Supreme Court, QDRO, divorce, retirement benefits, benefit designations

JEL Classification: J32, K31, K32, M52