Court Rules Plan Must Comply with Posthumous QDRO

October 13, 2006 ( - The US District Court for the Northern District of Illinois has ruled that a pension plan administrator erred in denying benefits to the spouse of a deceased participant who submitted a qualified domestic relations order (QDRO) after the participant's death.

In its opinion, the court said the plan administrator violated the Employee Income Retirement Security Act (ERISA) by failing to determine if domestic relations orders (DROs) submitted by Renee Marker were QDROs under ERISA. The administrator denied several requests for benefits made by Marker on the basis of a marital dissolution agreement filed at the time of Marker’s divorce from her husband.

In addition, the court agreed with other court decisions that ERISA does not impose a time limit on filing QDROs, and says nothing to imply that a QDRO entered after a participant’s death is not valid. The court determined that the last DRO Marker submitted to the administrator met all the requirements of a QDRO under ERISA and the plan administrator was obligated to comply with it regardless of whether the administrator believed it differed from the provisions of the marital dissolution agreement.

Marker was married to a Northrop Grumman Space & Missions Systems Corporation employee with benefits under its Salaried Pension Plan. When Marker and her husband divorced, a court issued a marital dissolution agreement which provided that her husband would select her as beneficiary of a joint and survivor annuity at the time he made his retirement benefit election.

However, Marker’s husband died prior to retirement, and thus made no benefit payout election. When Marker applied for benefits under the plan, Northrop Grumman denied her requests based on the limitation of the marital dissolution agreement. Marker subsequently sent several DROs to the company, which repeatedly denied benefits based on the dissolution agreement rather than determining if each DRO was a QDRO requiring compliance under ERISA.

After the plan again looked beyond the final DRO Marker submitted, she filed suit in the district court.

The case is Marker v. Northrop Grumman Space & Missions Systems Corporation Salaried Pension Plan.