Court Denies Interest on Benefit Paid 12 Years After
Death
July 7, 2008 (PLANSPONSOR.com) - The U.S. District
Court for the District of Delaware has denied a request by a
deceased pension plan participant's ex-wife for interest on
surviving spouse benefits paid to her 12 years after her
ex-husband's death.
In its opinion, the court said Section 502 of the
Employee Retirement Income Security Act (ERISA) does
allow a beneficiary of an ERISA plan to sue for equitable
relief, including interest on delayed payments, but only
in cases of violations of ERISA or the terms of the plan.
The court ruled that General Motors did not wrongfully
withhold Delsie E. Brookens' benefit payment.
Specifically, General Motors decision that a
separation agreement presented by Brookens with her
second request for benefits was not a Qualified Domestic
Relations Order (QDRO) was not arbitrary and capricious,
according to the opinion. Brookens and her ex-husband had
a separation agreement which provided that Mr. Brookens
would designate Ms. Brookens as survivor beneficiary of
any insurance or pension plans provided through his
employment.
David Brookens died in 1991. Delsie Brookens first
request for survivor benefits in 1998 was denied because
she was not married to Mr. Brookens during the 12 months
prior to his death as the plan required.
In 2004, Ms. Brookens sent a second request for
benefits, including the separation agreement between Mr.
Brookens and her. General Motors determined the
separation agreement did not meet the requirements of a
QDRO set forth in ERISA, denied her request, and advised
that she could get a retroactive QDRO.
Ms. Brookens obtained a retroactive QDRO and
requested benefits plus interest on the lump-sum benefit
payment. She received a lump-sum and monthly benefits
also began, but her request for interest was denied
because the plan did not provide for interest
payments.
Brookens then sued General Motors. The district
court granted summary judgment for the company.
The case is Brookens. v. General Motors Corp., D.
Del., No. 07-387-JJF, 7/1/08.
Rebecca Moore
editors@plansponsor.com