Beneficiary Designation Forms Not Governing Plan Documents

A federal appellate court found that beneficiary designation forms were not ‘plan documents’ governing a plan administrator’s award of benefits upon a retirement plan participant’s death.

Since the forms were not governing plan documents under the Employee Retirement Income Security Act (ERISA), the 9th U.S. Circuit Court of Appeals said the issue of whether the participant substantially complied with the governing plan documents to designate his beneficiary is an inquiry under state law. The court found a reasonable trier of fact could determine that he did. The case was remanded back to the district court for further proceedings.

A participant in two Xerox benefit plans designated his wife on beneficiary designation forms as the beneficiary of his accounts. After he and his wife divorced, he designated his son during a phone call with the Xerox Benefits Center as beneficiary. Xerox sent him beneficiary designation forms asking him to confirm his selection of his son as beneficiary, but he did not sign and return the forms.

The appellate court noted that the plan documents and summary plan descriptions (SPDs) do not reference the beneficiary designation forms as necessary to designate a beneficiary. The documents also say a participant may visit the benefits website or call the Xerox Benefits Center to complete or change beneficiary designations at any time.

The 9th Circuit cited previous cases which found that only documents that “provide information as to where the participant stands with respect to the plan” such as an SPD or trust agreement, could qualify as governing documents with which a plan administrator must comply when awarding benefits. The court said that because the beneficiary designation forms provide no such information, they are not “plan documents” governing the plan administrator’s award of benefits.

In addition, the appellate court found the actual plan documents do not incorporate the beneficiary designation forms in its language or appendices so as to bring them into the category of governing plan documents. The 9th Circuit said the district court erred in determining that the participant was required to abide by the language contained in the forms, but not the governing plan documents, to change his beneficiary designation.

The ex-wife argued that Xerox had discretion to require the use of the beneficiary designation forms to change beneficiaries. But the appellate court found that Xerox did not exercise any discretion in requiring the forms because rather than award the benefits to the ex-wife per the forms on file, it chose to go to the court for a determination.

The 9th Circuit’s decision in Mays-Williams v. Williams is here.