U.S. Magistrate Judge Mark D. Clarke of the U.S. District Court for the District of Oregon ruled that the participant’s benefits vested for his ex-wife at the time the participant retired and began receiving a payout.
In granting AGC-International Union of Operating Engineers Local 701 Pension Trust Fund, Defined Benefit Plan’s motion for judgment, Clarke relied on a 2008 9th U.S. Circuit Court of Appeals decision in which that court ruled that QJSA surviving spouse benefits irrevocably vest for a participant’s spouse at the time of the annuity start date and cannot be reassigned to a subsequent spouse.
Clarke said plaintiff Maurice Montgomery’s QJSA benefit option was “locked” in when he retired and began to receive benefits.
In June 1993, Montgomery named his then-wife Cecilia as the beneficiary of a QJSA. Two months later, Montgomery retired and his benefits began. The Montgomerys divorced in 2007 and a divorce decree was issued that awarded him his pension benefits.
The following year, Maurice sought to change the beneficiary of his pension from to his new wife, Judith Montgomery. The plan’s board of trustees review committee denied his substitution request.
In finding that the review committee did not abuse its discretion, the court said the committee’s decision was supported by plan language and the Employee Retirement Income Security Act (ERISA).
The case is Montgomery v. AGC-International Union of Operating Engineers Local 701 Pension Trust Fund, Defined Benefit Plan, D. Or., No. 08-3129-CL.
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