Compliance July 2, 2010

Beneficiary Choice Driven by Change Form Signing

July 2, 2010 (PLANSPONSOR.com) – A now-deceased life insurance plan participant effectively changed his beneficiary designation from his ex-spouse to his new wife when he and the second wife signed a beneficiary designation change form. 
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That was the bottom line of a ruling by the 11th U.S. Circuit Court of Appeals in a dispute between Alice H. Smith and Alma Sue Smith over the proceeds of Richard Smith’s life insurance policy. 

The appellate court ruled that an award of benefits under an Employee Retirement Income Security Act (ERISA) plan is governed by the plan language itself.  The plan document from Principal Life Insurance Co  for Richard Smith stated that a policyholder could “change a named beneficiary by sending a written request to The Principal,” and that once Principal recorded the change, that change applied as of the date the request was signed. 

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The court ruled that Alice Smith was the beneficiary as of February 2007, when she and Richard Smith signed the form. 

The U.S. District Court for the Northern District of Alabama had ruled for Alice Smith and Alma Smith appealed.  Alma Smith argued, among other things, that she was entitled to the insurance proceeds because she was the beneficiary on Principal’s records at the time of Richard Smith’s death. 

The case is Principal Life Insurance Co. v. Smith, 11th Cir., No. 10-10122. 

Benefits July 2, 2010

Woman Walks off with $113K Jury Award against Lucas

July 2, 2010 (PLANSPONSOR.com) – A San Francisco woman who says Lucasfilm Ltd. canceled a job offer after learning she was expecting a child has won a $113,830 jury award as a result of a trial of her 2009 lawsuit.
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The San Francisco Examiner reported that Julie Gilman Veronese, 37, claimed an aide to George Lucas revoked an offer for a $75,000-a-year personal assistant position after she revealed she was pregnant.

According to the newspaper, attorneys for the billionaire filmmaker contended Veronese was hired only for a 30-day project and that the decision to cancel the work was mutual. They also argued that Veronese was a self-absorbed socialite who came to believe she was entitled to a job she never had.

The Marin County jury disagreed, finding after nearly three days of deliberations that the company famous for the “Star Wars” and “Indiana Jones” franchises had wrongfully terminated Veronese because of her pregnancy.

In her testimony, according to the newspaper, Veronese said Lucas’ personal assistant Sarita Patel hired her for a full-time position, which would start with a 30-day probationary period. The Friday before she was to start work, though, Veronese revealed to Patel that she had learned she was pregnant. Patel responded by telling her not to come into work, according to the newspaper report.

Defense attorneys said the 30-day period was intended to be a tryout for the full-time job, but that Veronese was deemed unfit. 

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