Night Owl

Thanks for this. It seems to me that we're back in the land of admissibility of post-distribution suits, even with 514(a). A raft of decisions say the plan administrator must play it as it lays when it comes to the beneficiary documents, but Andochick's court says unanimously, "Allowing post-distribution suits to enforce state-law waivers does nothing to interfere with these objectives [named in Kennedy]." If state-law waivers are enforceable post-distribution, and aren't a case of pre-emption, why not state statute, particularly statute meant to protect the families of plan participants who may not have excellent divorce lawyers or may behave like ordinary people and fail to take care of personal finance administration properly? And an answer comes from Colorado in 2021: post-distribution in case of an affirmative waiver, yes. In the case of an intrusive state law, no. The language is stark: "a post-distribution suit based on a state statute that purports to divest a named beneficiary of her right to plan proceeds by operation of law." If this were just commons-room talk and not actions with the meter running, I'd be happy to go on with that argument, but I suspect that even my top potential take here wouldn't justify the costs of a lawsuit that interesting, even if one could be brought and had good odds. Especially with the relatively unfamiliar top-hat question involved (what exactly would be pre-empted if part 4 doesn't apply?). Apart from which I'm not really keen on chipping away at federal statutory protections of people's rights in favor of state law; that hasn't gone so well in the past, and one personal claim doesn't seem to be worth national trouble. Hm. Assuming the second plan is the employer's 457(b), yes, it's a top-hat, DOL filing statement and all. The beneficiary designation is probably valid, though no one's checked yet. As for the waiver, we're in the process of finding out. (Dicey bit there; I'm hoping the release of divorce docs is narrow and preserves the ex-wife's privacy as far as is possible. My atty is unclear.) What I've learned today is that my attorney, who's been skeptical all along of the state statute's applicability, is a good attorney. If there is a waiver, then yeah, I see a path through to getting the necessary info, and with luck from there to settlement. If not, looks like we're probably done.

I'm not the beneficiary under the existing beneficiary document. However, if a plan is non-ERISA as far as fiduciary duties go, then state law becomes relevant, and under that law the ex-spouse beneficiary has to be treated as deceased. In that case we're talking about contingents, and it's likely that either I'm a contingent beneficiary or there is no contingent and the estate becomes the beneficiary. The problem here is not having documents in hand in order to find out (a) which plan of the two (if either) is the non-ERISA plan (one will likely be the 403(b), the other the 457(b)): (b) whether there is a contingent beneficiary; (c) if so, whether that's me. I do have the 457(b) plan summary, which happens to be online, and yes, the employer is the plan administrator. One more question, Artie: it appears here that the plan administrator simply paid out the annuity remainders and that there's no continuous stream of payments to the ex-spouse beneficiary. As far as the plan administrator's concerned, then, it's done, no? The remedy under state statute is to sue the ex-spouse, not the plan admin. Would they not simply say "sorry, money's paid out, not our business anymore, we have no duty left to answer your claim"? Or must they even though there's no money left? Of course, without the relevant info (certainty about the plan type and contingent beneficiary) , it's probably not possible to sue the ex-spouse, and that info is apparently recoverable only from the plan admin, the annuity company, or the ex-spouse. Normally you'd send the estate executor to get that information, but since, as above, as I'm non-executor, non-trustee, and non-heir (the trust is the beneficiary of the will, and I'm merely a trust beneficiary), I have no standing to force the executor-trustee to try to get the info himself, though it does get stickier if it's plain that the estate is the beneficiary and he isn't trying to recover the money.

Thank you, Artie - that's very helpful. If I understand you correctly, even though I already know that I am not the named beneficiary, since money was apparently paid out under particular contracts to the ex-wife (by recently-filed estate tax docs), I can file a formal written claim (with the employer, whom I expect would be the plan administrator, but can find out). This will be denied, but I'll receive an explanation and then have a right to request and receive at a minimum the (complete?) beneficiary form, and possibly any relevant document with information about the plan type. Question: when you say " the beneficiary form that was used", to the best of my understanding, beneficiary forms will generally list contingent beneficiaries, but not the plan name or type, just the contract number. Is that correct? If so, receiving a complete form would at least get me part of the information I need. We're within a year of my dad's death, and I couldn't have been aware of the benefit before last August, so I'll check on limitations. Much appreciated.

Oh, both accounts were very much funded -- by my dad, in the case of the non-ERISA plan. (Non-ESOP-type 457(b)s set up through employers require employee contributions, often set up as a regular salary deduction; the employer, however, doesn't contribute, and merely facilitates the employee's ability to maximize tax deferral on regular high-salary compensation, frequently the only type of compensation these employees have.) To a surprising extent, in fact, which became clear when estate tax returns were filed. Even so, if I'm not directly a beneficiary, it'd be easy to spend more on lawyers than I'd see back, which is part of why pre-filing discovery matters here.

Thank you for this. Yes, in this case, there is neither QDRO nor military involvement, and the interesting thing about the 457(b)/top-hat likelihood is the relief from ERISA Part 4. QDROs, while messy, work somewhat differently from this situation because of the family court's involvement and the recognized importance of the interests. But in that case, discovery during divorce will turn up information about annuity contracts so that the asset can be divided. What I'm hearing overall from you is that essentially a lawsuit would have to be filed and a judge willing to sign a subpoena in the absence of any concrete evidence beyond "the man had one known job, making it unlikely that both annuities are ERISA-covered to the extent that would trump state law regarding ex-spouse beneficiaries," which sounds a little fishing-expedition to me. It sounds like all the lawyer would be able to do is explain the situation and ask the annuity company nicely which of the plans was not 403(b) (or was 457(b)) and, for that one, whether there was a contingent beneficiary, and if so whether it was either the estate or me. If that failed, he could write to the ex-wife, who might turn out to be honest and/or want to avoid further trouble, though certainly any competent lawyer would advise her that she didn't have to respond and probably nothing would come of it -- except of course she'd know I was out here in the world thinking what I'm thinking. And if the answer to both was "we're not telling you," the path to application of the law and remedy would probably end there. We could try to file a lawsuit and get a judge to issue a subpoena for the info, but without certain knowledge of which annuity was non-relevant-ERISA (assuming one was) and that I'm beneficiary, the discovery costs could very quickly exceed anything reasonable.

Hello - A question about release of information about a decedent's annuity contract. (I'm not a benefits pro, and appreciate your time.) My late father had two annuities from the same company, one of them probably fully ERISA-covered from his employment, the other probably either his employer's top-hat plan or, less likely, self-purchased outside employment. Both had his ex-wife listed as beneficiary and funds have likely been distributed already to her. The state in which he lived directs plan administrators to regard ex-spouses as deceased unless otherwise specified. She's probably entitled to one, but not both, annuities under the combination of ERISA and state law. Remedy would be to collect from her directly. Problem: I have neither contract in hand and am not executor, trustee, or heir; his trust is the beneficiary of his will, and I'm merely a trust beneficiary. Without knowledge that there are assets to recover for the estate, the executor-trustee will not press the plan administrator for release of contract information; I have no standing to force him to. If I knew that at least one of the annuities was definitely not ERISA-covered regarding fiduciary duties, and that either my father's estate or I was properly a beneficiary, the path to recovery would be relatively clear. However, in the absence of contracts and an executor-trustee willing to request them, I don't see any very compelling path. All I have is a supposition that only one annuity is ERISA-covered, though I don't know which, and another that I'm in some form a contingent beneficiary. As far as I can make out, though, I have no right to the contracts or info about whether (a) either plan is in fact non-ERISA/457(b), and if so which; (b) whether contingent beneficiaries exist for it; (c) if so, whether I'm named. An annuity company rep has told me that a subpoena driven by my lawyer would probably prompt release of information from their legal department, but I have a feeling this is probably incorrect. If, as a plan administrator, you'd already disbursed remaining funds to the named beneficiary, then received a subpoena to release such plan and contingent-beneficiary info to the attorney of a non-executor, would you be able to release it, and if so, why would this be allowed? Again, thanks very much for your time.