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Compliance May 23, 2006
Supreme Court Will not Hear Case on Posthumous QDRO
May 23, 2006 (PLANSPONSOR.com) - The US Supreme
Court has decided not to review a ruling from the 3rd US
Circuit Court of Appeals regarding the validity of a
Qualified Domestic Relations Order (QDRO) issued after a
participant's death.
Reported by Rebecca Moore
The appellate court had determined that the Employee Retirement Income Security Act (ERISA) did not prohibit alternate payees from pursuing QDROs after the death of a participant (See Alternate Payee Can Pursue QDRO After Participant Death ).
In reversing a lower court decision, the appellate court also found that a property settlement agreement between a retirement plan participant and his ex-wife was a QDRO, even though it was not qualified until after the participant’s death.
The US District Court for the District of New Jersey had ruled in favor of ExxonMobil, finding that the property settlement agreement did not meet the requirements of a QDRO. The lower court also agreed with ExxonMobil that a nunc pro tunc order issued by the court that oversaw the plaintiff and participant’s divorce was not a QDRO because it violated ERISA’s prohibition against requiring plans to provide increased benefits “by providing for a survivorship interest in benefits that had lapsed after the participant’s death.”
A petition for writ of certiorari, asking that the Supreme Court review the 3 rd Circuit decision, was denied, leaving the 3 rd Circuit decision standing.
The 3rd Circuit opinion in Files v. ExxonMobil Pension Plan is here .
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