No ERISA Contradiction Found in Pension Rights Waiver

July 14, 2004 ( - A wife's postnuptial agreement waiving her rights to her spouse's pension benefits does not contradict provisions of the Employee Retirement Income Security Act (ERISA).

Reversing a circuit court’s opinion, the Michigan Court of appeals, in a 2-1 unpublished opinion, turned to a previous decision, MacInnes v. MacInnes. In that case, the Michigan appeals courtheld a claim that a beneficiary had waived his right to receive life insurance benefits from his former wife’s benefits plan, which was regulated by ERISA, was “most appropriately resolved under principles of waiver rather than preemption.”  

“Similarly, this case may be more appropriately resolved under principles of waiver,” the court said in ruling ArlenePruchno, the surviving spouse of Albert Pruchno, effectively waived her rights when she agreed that Albert’s children from a previous marriage would equally share 50% of Albert’s Ford Motor Co. pension benefits once Arlene reached 65.

“Because plaintiffs’ complaint is not so clearly unenforceable as a matter of law that no factual development could possibly justify recovery, the circuit court erred in granting defendant’s motion for summary disposition,” the opinion said.

The court, though, considered the ERISA implications of the case as well.   Examining the postnuptial agreement, said ERISA did not preempt the claim because the claim was not related to an ERISA plan.   That was because the agreement contained no real connection or reference to an ERISA plan, the court said.

Additionally, the court found the agreement did not constitute a waiver or election under ERISA Section 205, which allows a plan participant and spouse to instruct a plan concerning their wishes. In this case, there was no claim that the agreement was executed during a plan period, or that it was provided to the plan, or intended to be binding on it, as required by Section 205, the court said.

The court remanded the cases back to the lower court.   The case is Pruchno v. Pruchno , Michigan Court of Appeals, No. 245583.