Kennedy v. DuPont Plan Administrator
Kennedy v. DuPont Plan Administrator
The Supreme Court has agreed to decide whether the Employee Retirement Income Security Act’s anti-alienation provision prevents the enforcement of a state law holding that a spouse’s right to the other spouse’s pension benefits becomes invalid upon divorce.
While they were married, William Kennedy designated his wife, Liv, as the sole beneficiary of his DuPont pension and retirement savings plans. But as part of the couple’s divorce settlement, they signed a qualified domestic relations order in which Liv Kennedy agreed to give up her right to receive any benefits from William Kennedy’s pension and retirement savings plan.
For reasons unknown, William Kennedy never submitted the qualified domestic relations order prior his death in 2001 at which point the plan paid out his benefits to his ex-wife because she was still designated as his beneficiary.
William and Liv Kennedy’s daughter, Keri, who was appointed executor of her father’s estate, sent a letter to DuPont in which she argued that because the order had been issued by a court, his benefits should revert to the estate. DuPont denied the request, relying on the original beneficiary designation.
The U.S. District Court for the Eastern District of Texas granted a motion for summary judgment, awarding the estate the value of Kennedy’s retirement and pension funds. But in August 2007, the 5th U.S. Circuit Court of Appeals reversed the lower court’s judgment, noting that because the settlement order had not been filed with the plan, it was invalid and that the plan was correct in paying William Kennedy’s benefits to Liv Kennedy.
In asking the Supreme Court to hear the case, Kennedy’s estate argued that the justices should step in to clarify a split among the circuits and state supreme courts on the issue. In its brief in opposition, DuPont countered that most of the cases cited to prove division among the courts “involve life insurance and other welfare plans" that are not subject to ERISA’s anti-alienation provision.
ERISA, divorce, pensions, retirement