Since Divorce Not Final, Plan Must Pay Wife

The U.S. District Court for the District of Massachusetts found that since the Employee Retirement Income Security Act of 1974 (ERISA) dictates that the spouse needs to give consent for a beneficiary other than themselves to be designated, the wife, although long separated from her husband, was still entitled to his benefits. District Judge Timothy S. Hillman noted “the vast weight of authority, if not the entirety of the courts that have addressed the issue, have concluded that the common law meaning of ‘spouse’ is settled, straightforward, and dispositive: ‘spouse’ means a man or woman joined in wedlock…” 

The couple, Stephen Gallagher and Debra Gallagher, separated in 1989 but never finalized their divorce prior to his death in 2011. In 2005, Stephen designated their son, Christian, as his beneficiary. Both the wife and son claimed the benefits upon Stephen’s death. 

Hillman said it was “entirely unclear to the Court” whether the plan at issue is a defined benefit plan which would entitle the wife to a qualified preretirement survivor annuity (QPSA) of only 50% of the benefits accrued. He determined the wife was due at least 50% of the benefit. 

The decision in the case can be found here.