The case of Rich v. Southern California IBEW held that upon the Alternate Payee’s death, the retiree will receive the full pension amount. Mr. Rich was a member of the IBEW and participated in its Pension Plan. He chose a normal pension form for payment of his benefits. The normal pension form paid $962.00 per month for a minimum of 60 months, and provided that if Mr. Rich died after the 60 months, the pension would stop upon his death.
Mr. Rich and his wife divorced, and the Court approved a qualified Domestic Relations Order providing for the division of the pension benefit. In March of 1997, Mr. Rich’s ex-wife died, and Mr. Rich contacted the Fund requesting that his entire benefit be paid to him. The Fund refused, and Mr. Rich requested the Court to order the restoration of the benefit. The Trial Court denied Mr. Rich’s request and he appealed.
The IBEW Pension Plan is governed by the employee Retirement Income Security Act (“ERISA”). ERISA prohibits transfers between spouses in divorce action except through Qualified Domestic Relations Order.
The Appellate Court reasoned that whatever interest in the pension the QDRO did not assign to Mr. Rich’s ex-wife remained with Mr. Rich. The QDRO provided that payments to the former Mrs. Rich would cease upon her death, and there was no further assignment of any interest. The Court further reasoned that although the payment made pursuant to the QDRO ended with the former Mrs. Rich’s death, The Fund’s obligation to pay $962 per month did not. The Plan required full payment until the death of Mr. Rich.
The Decision in the Rich case warrants a review of any denial to restore pension benefits after the death of an Alternate Payee.
The IBEW Pension required that Mr. Rich exhaust all administrative remedies. ERISA, to, requires that the internal review procedures be exhausted prior to bringing suit. An exception does exist when that would be futile. The futility exemption applied in Rich, but may prevent the Court from interceding in other cases if the administrative remedy is not attempted first.