7th Circuit’s Recent Ruling in ERISA Change-of-Beneficiary Dispute Offers Key Takeaways for Employers and Retirement Plan Fiduciaries
Love may fade, but beneficiary designations do not. That was the hard lesson learned in a legal dispute between a man’s estate and his ex-spouse over his retirement plan proceeds – ultimately, a federal appeals court in Chicago refused to honor a man’s attempt to remove his ex-wife as beneficiary of his retirement account and ruled that the ex was entitled to receive the entirety of the account. The decision, which was based on a legal test courts have long recognized in ERISA cases, produced a harsh outcome for the estate’s intended beneficiaries, despite the participant’s clear expression of intent. In this Insight, we’ll explain what happened in the recent 7th Circuit case and provide three takeaways for employers and retirement plan fiduciaries. What Led to the Beneficiary Dispute in the PCA Case For more than 30 years, a man worked for Packaging Corporation of America (PCA) and participated in the company’s 401(k) plan. When the participant got married in 2006, he designated his ...