MEP

Good points DSG. You are right that I am trying to look at the entire overall picture, while the wife is only worrying about her survivor annuity. In my mind (though I am low enough on the totem pole that I'm not making the final call), the wife is entitled to the survivorship benefit, its just how it is handled. Following a similar process as laid out in Hearn seems like a solid way to go, though I do wish this had been elevated prior to paying off the participant's beneficiary for an additional 6 months. One might look at Hearn and say that on some level, you are punishing the innocent spouse for the sins of the participant, but ERISA § 205(c)(6) appears to provide the fund the ability to do so. Unfortunately, she is represented by counsel in the probate court, but obviously not an attorney well versed in ERISA (which is not unusual at all). Notwithstanding ERISA, I would have thought her attorney, when filing motions regarding the fund's survivorship benefit, would have made the fund a party to the case, or at least provided notice regarding such motions/hearings. I do imagine some settlement discussions will take place soon, though its important to have an understanding of where the law/guidance ect stand on such a situation. The replies so far have been extremely helpful on that point.

All the comments are much appreciated. Just to provide some feedback, the 12 month rule is not relevant, as the marriage was about three years before he applied for benefits. The Participant was kind enough to mention and provide documentation for his two prior marriages in the 80s/90s, but not his recent marriage. I have reviewed the Hearn case and other cited cases. I like the thought of handling the case along those lines, though I am not sure if SECURE Act 2.0 affects the Fund's ability to proceed similarly as it states that a fund may not seek recovery of past overpayments made to a participant from a participant’s beneficiary, including their spouse, surviving spouse, former spouse, or other beneficiary. I'm also going to need to give some thought to the language "innocently and prudently", as the fund received notice about this issue about 6 months ago, but just kept on paying the beneficiary. I think the fund is in fine shape prior to receipt of that notice (especially after we thereafter received the marriage certificate) that participant had a surviving spouse, but is problematic thereafter. As to the mention of the participant's estate, I can confirm that the surviving spouse does have counsel and is litigating the issue there. I don't know the full extent because the documentation shared from her is limited and the jurisdiction is such that it is not publicly available, but apparently the probate court awarded her survivorship rights, without further explanation. I do get concerned when I see a state court litigate issues related to the fund without an understanding of even providing the fund notice or understanding ERISA preemption.

Multiemployer pension plan. Participant files an application for benefits. States he is not married and chooses a non-spousal, 60 sum certain form of payment. Lists son as his beneficiary. Participant received payments for about a year and dies. Just to complicate matters, participant never cashed his payments. Son began receiving the payments that participant was entitled to before his death, along with the remaining payments for over a year now (and continues to do so). The Fund has now learned that participant was married at his effective date and at his death. Spouse now wants her pension benefit. Not that we are obligated to follow it, but the probate court has awarded her spousal benefits. No idea if it is applicable, but our plan document does include a statement that if a participant, beneficiary, ect makes a false statement/furnishes fraudulent information relevant to a claim for benefits, then benefits not vested shall be denied, suspended, or discontinued. But the fact that we are dealing with vested benefits, I'm not sure we could have the participant's actions effect the wife's entitlement to benefits. Any suggestions on how to handle this situation? Just spitballing here, but it seems like we need to stop the son's payment ASAP. With SECURE Act 2.0, its likely gonna prove difficult to seek an overpayment from son, unless we have on record some fraudulent statement made by him, which I doubt. Once the wife applies, we should adjust the form of payment to a spousal pension, and give her the payments participant was entitled to prior to his death, and spousal payments until her death. I don't like the thought of having to pay out some benefit periods twice, but I'm not sure there is any way around it. We probably should also set the record straight with the probate court about federal preemption. Any and all guidance is appreciated.

Sorry for the delay, with the holidays and taking time off. One of the reasons for my present issue is that the plan document is not crystal clear on this. The key wording is summarized below (it is mostly verbatim if you take out the initial wording for the two sentences), as noted above: Our plan document notes that if a participant is deemed to be separated from covered employment, defined as quitting, discharge, or layoff, the participant is entitled to a distribution. The plan document notes that there is no separation benefit if at the time of application for payment the participant is employed by his employer. Most of my experience with ERISA is with industrial/construction union funds where you see a ton of union member movement between employers, so I am familiar with provisions dealing with participants working with other participating employers. I am a bit surprised our plan document does not appear to cover this circumstance. Historically, we have not treated this circumstance as a severance event for impacted participants, meaning that they are not eligible for a distribution. Thanks again for your comments.

I haven't seen the CBA, bridge agreement, ect, but it relates to the Contract Act of 1965 which deals with federal contractors furnishing services to federal agencies. New employer won the bidding. Everything is otherwise remaining the same. I'm thinking the Same Desk Rule is applicable here.

As noted in the title, I am dealing with a multiemployer 401k plan. We are going through a situation where the employer contract holder is changing and we are being asked whether this should be treated as a severance event for impacted participants making them eligible for a distribution. Our plan document notes that if a participant is deemed to be separated from covered employment, defined as quitting, discharge, or layoff, the participant is entitled to a distribution. The plan document notes that there is no separation benefit if at the time of application for payment the participant is employed by his employer. Any assistance appreciated. My initial thought is that the answer is no, but it would be great to have some statute/regulation/case law to use to support the provided answer.

fmsinc - thanks for your response. I should reiterate that we are not aware that a QDRO exists - only that divorce decree states that a QDRO be drafted if it is needed to split the participant's retirement account 50% between the participant and spouse/alternate payee for the period of the marriage. We found out about the divorce decree since it was requested as part of his application for benefits. Our application process only asks for the decrees and property settlements, not whether a QDRO actually exists. Does that change your thought process? Obviously, the goal is to get in front of any potential issues and avoid any possible legal exposure down the line. One possible thing we have discussed internally is drafting a letter to the participant and spouse/alternate payee acknowledging the following: 1) that participant has a pension application currently in process; 2) that the Fund is in receipt of the divorce decree; 3) the provision in the decree regarding a QDRO; 4) confirmation that we did not receive a QDRO; and 5) confirmation of the parties' remarriage. If a QDRO is not provided, we would process the application as if there was no divorce decree or DRO.

QDROphile - thanks for the response. So, the Fund should just proceed with processing pension application for benefits like no QDRO existed? Also, do you have anything I can use to support this? Any guidance from DOL, caselaw, regulations, ect?

Participant divorces his spouse/alternate payee in the 2000s and the divorce decree directs that a QDRO be drafted to split the participant's retirement account 50% between the participant and spouse/alternate payee for the period of the marriage. QDRO is never received by the Fund. Participant and spouse/alternate payee get re-married several years later and participant recently applied for pension benefits. Does the Fund need to find out whether a QDRO was drafted? Does the Fund need this QDRO before processing participant's application for benefits? Any guidance appreciated.