An employer plan governed by ERISA, the federal benefits law, pays according to its plan documents unless a QDRO directs otherwise, though a waiver in an agreement can be enforced afterward against the person paid.
The Plan Follows Its Documents
The Georgia Supreme Court described the federal rule in Appleton v. Alcorn, 291 Ga. 107 (2012). Under a 2009 decision of the United States Supreme Court, an estate could not maintain a claim against the employer and the plan administrator, because the benefits had been paid “according to the plan documents” and the administrator “was not required to distribute the funds according to the terms of a divorce decree since the divorce decree was not a qualified domestic relations order under ERISA.”
After the Money Is Paid
In Appleton, a husband and his second wife signed a settlement agreement, incorporated into a separate maintenance order, waiving claims to each other’s retirement benefits and life insurance. They were still married when he died about a year later. He had named no 401(k) beneficiary, so the plan’s terms paid her as his surviving spouse, and she was the named beneficiary of his life insurance at his death. His daughters sued her for breaching the agreement.
The trial court dismissed that claim, and the Court of Appeals reversed. The Supreme Court affirmed the Court of Appeals, because ERISA-covered benefits “that have been paid to the participant or beneficiary are not subject to ERISA’s anti-alienation provision.” It did not decide whether she had waived the money, only that the daughters’ claim could go forward.
What That Means for an Agreement
So a waiver in an agreement does not control what an ERISA plan pays; the plan documents and any QDRO do. The waiver can be enforced afterward, against the person paid. Our post on retirement terms in a Georgia divorce agreement shows a waiver that was upheld, and our post on what a QDRO is explains the plan’s protection.
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This post is a quick overview of the law and is not intended as legal advice. Please feel free to contact our office for a consultation if you have questions about this or any other legal aspects regarding your case!