The United States Supreme Court accepted certiorari in the 5th Circuit case of Kennedy v. E.I. Dupont, 497 F.3d 426 (5th Cir. 2007). The issue the Court will consider is limited to whether a Qualified Domestic Relations Order (QDRO) is the only valid way a divorcing spouse can waive her right to receive her ex-husband's pension benefits under ERISA.
The case involves a former spouse who waived her right in the divorce decree to receive any part of her husband's "saving and investment plan" provided by Dupont. The husband was the "participant" in the pension plan; the wife would have been the "alternate payee" had she received a portion of the husband's plan benefits. The plan qualifies as a qualified ERISA plan. After the divorce, the ex-husband/employee never changed his beneficiary designation before his death. The plan paid the ex-wife and the husband's estate sued the pension plan. The 5th Circuit held the waiver of the wife's beneficial interest in the divorce decree was prohibited by ERISA's "anti-alienation" provisions. The 5th Circuit Court of Appeals decided that the only method by which a participant's or beneficiary's interest in an ERISA-covered plan can be accomplished is by QDRO. The court also noted that the cases involving waivers of ERISA-covered life insurance policies are not applicable here since those are welfare plans and not pension plans there therefore the anti-alienation provisions are not applicable. There is a conflict of decisions by the various federal courts of appeal on this issue.
The 5th Circuit Court of Appeals decision is available in PDF format here. (URL last visited 2/20/2008).
