ERISA-Sixth Circuit Holds That A Divorce Decree Should Be Treated As A QDRO, So The Plan Must Pay Benefits In Accordance With The Decree.

In Sun Life Assurance Company of Canada v. Jackson, No. 17-3120 (6th Cir. 2017), Bruce Jackson married Bridget Jackson in 1993.  Sierra Jackson, their only child, arrived in 1995.  They divorced in 2006.  Under their divorce decree, Bruce and Bridget were required to maintain any employer-related life insurance policies for the benefit of Sierra until she turned 18 or graduated from high school.  At the time, Bruce had an employer-sponsored life insurance policy, under a plan subject to ERISA, that listed his uncle, Richard Jackson, as the sole beneficiary.  Bruce never changed the beneficiary of the policy to Sierra before he died in 2013.  Litigation ensued, and the district court ordered Sun Life to pay the life insurance proceeds to Sierra.

Upon reviewing the case, the Sixth Circuit Court of Appeals (the “Court”) stated that the divorce decree suffices as a qualified domestic relations order that “clearly specifies” Sierra as the beneficiary under ERISA, 29 U.S.C. § 1056(d)(3)(C), so that Sierra is entitled to the benefit from the plan specified in the divorce decree.  Accordingly, the Court affirmed the district court’s holding.

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