Given the continuing wave of ERISA litigation, this article has become a mainstay of The Speed Reader. A sample of recent cases is provided below.
The most common type of ERISA case for approximately the past sixteen years has involved retirement plan participants’ allegations that plan fiduciaries caused participants to pay excessive recordkeeping and investment fees and included one or more poorly-performing investment options in the plan. Recent cases in this category include the following:
Another type of recent retirement plan cases is as follows:
In re Marriage of Mack (decided by the Colorado Supreme Court on April 11, 2022): This case involved the retirement benefit of a participant in the Colorado Public Employees’ Retirement Association (“PERA”). Under the plan, participants have three payment options for their retirement benefits. Option 1 is a life annuity, where monthly payments to a retiree cease when he or she dies. Options 2 and 3 also provide monthly payments to a retiree. Under options 2 and 3, however, the retiree names a beneficiary, and when the retiree dies, the named beneficiary receives monthly benefit payments for life.
Also, although a participant’s distribution option choice is generally final, Colorado law provides an exception that was the focus in this case. Namely, if a retiree chose either option 2 or 3 and the retiree’s spouse was named as the retiree’s beneficiary at retirement, the court presiding over the retiree’s dissolution of marriage involving that beneficiary “shall have the jurisdiction to order or allow” the retiree to remove the spouse as named beneficiary and prompt a conversion to option 1.
The retiree/participant in this case argued that such statutory language allowed him to unilaterally remove his former spouse as his plan beneficiary and to convert to option 1, which would pay him a higher monthly payment than option 2 or 3. The Colorado Supreme Court (the “Court”) addressed whether his argument prevails, or whether the power to remove his former spouse as his beneficiary lies with the trial court.
The Court ruled against the retiree. As support for that ruling, the Court noted that under either scenario provided by the statute (i.e., the trial court “shall have the jurisdiction to order or allow” the retiree to remove the spouse as named beneficiary and prompt a conversion to option 1), “the authority to trigger a shift in cobeneficiary status unambiguously lies with the court, not with the retiree.” In addition, the Court concluded that because the statutory language at issue is not ambiguous, the Court need not address the retiree’s/participant’s arguments regarding the statute’s legislative history.