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CCH® PENSION — 05/11/12

Second wife not entitled to annuity, despite husband's designation, if husband never divorced first wife

A participant's second wife is not entitled to receive a spousal annuity from her late husband's pension plan, despite the husband's beneficiary designation, if the husband failed to legally divorce his first wife, the U.S. Court of Appeals in Cincinnati (CA-6) has ruled.

Beneficiary designation

Upon retiring, a pension plan participant applied for benefits and elected a "50% Husband-and-Wife" distribution, under which he would defer half of his accrued pension to be paid monthly to his "spouse" after he died. On his beneficiary form, he designated his second wife as the beneficiary.

After his death, the plan began paying a monthly annuity to the second wife. Shortly thereafter, the decedent's first wife filed a claim for the benefits. She and the participant were never legally divorced, she said, and thus she was entitled to the annuity, not the second wife.

The district court determined that the second wife was entitled to the benefits, and the first wife appealed.

Legal spouse

The plan defines a spouse as the person to whom the participant is legally married. Under applicable state law, a presumption exists in favor of the validity of a successive marriage, but the presumption may be overcome with evidence that the first marriage did not end in divorce.

If the participant never divorced his first wife, then she would be his surviving spouse under the plan. As such, her status as the participant's surviving spouse would take precedence over the participant's express election of the second wife as his spouse and beneficiary. This is because the first wife never waived her rights to receive spousal benefits as required by ERISA §205.

Upon remand the district court must make a factual determination as to which woman was the participant's spouse at the time of his death, and then determine the proper pension beneficiary.

Source: IBEW Pacific Coast Pension Fund v. Lee (CA-6).

For more information, visit http://www.wolterskluwerlb.com/rbcs.

For more information on this and related topics, consult the CCH Pension Plan Guide, CCH Employee Benefits Management, and Spencer's Benefits Reports.

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