9th Circuit Finds QDRO Valid for 30-year Quasi-marriage

January 13, 2009 (PLANSPONSOR.com) - The 9th U.S. Circuit Court of Appeals has determined that a pension plan must recognize a qualified domestic relations order (QDRO) under Washington state law because the payee maintained a "quasi-marital" relationship with the plan participant for more than 30 years.

The court agreed with a federal district court in Washington that the Order issued by the Superior Court of King County awarding Norma Owens a 50% interest in Phillip R. Owens, Sr.’s pension benefits constituted a valid QDRO because it relates to “marital property rights” and Norma qualifies as a “dependent” of Phillip, and therefore as an “Alternate Payee.”

The 9 th Circuit pointed out that under the Employee Retirement Income Security Act (ERISA), a domestic relations order is issued “pursuant to a state domestic relations law,” and that ERISA does not explicitly define “marital property rights.” However, the state of Washington’s domestic relations law recognizes quasi-marital relationships for purposes of property division.

The appellate court rejected the Automotive Machinists Pension Trust’s argument that the federal Defense of Marriage Act precludes any quasi-marital relationship from resulting in marital property rights, saying the Act’s legislative history reflects that Congress was only concerned with same-sex marriages.

The court also rejected the Pension Trust’s contention that Norma was not an “alternate payee” because she was not a “spouse, former spouse, child, or other dependent” as dictated by ERISA. According to the court, Norma qualifies as an “other dependent” because she lived with Phillip for 30 years, Phillip was the primary wage-earner while Norma cared for the house and their children, and she was listed on the couple’s joint tax returns as Phillip’s wife.

In a dissenting opinion, Circuit Judge John T. Noonan argued that Norma is not considered an “other dependent” because she is not currently a dependent of Phillip. Noonan noted that when Congress wanted to refer to a previous relationship, it used the term “former.” Norma is a former dependent of Phillip, a situation which is not referenced in federal statue for QDRO’s, he said.

The opinion in Owens v. Automotive Machinists Pension Trust is here .