QDRO Overrides Beneficiary Designation

>The US Supreme Court’s refusal to hear the case means a New York State Appeals Court decision was allowed to stand that found the QDRO entered into by both the participant and his former wife trumps all prior orders, which includes a prior divorcee judgment that entitled the former spouse to half of the plan’s death benefits, . This was despite that fact that the participant did not alter beneficiary designations after the signing of the QDRO.  

Case History

>Dr Robert Silber was enrolled in two annuity pension plans with the Teachers Insurance Annuity Association and College Retirement Equity Fund (TIAA-CREF) and the College Retirement Equities Fund (CREF), for which he designated his wife, Barbara A Silber as primary beneficiary.   In 1985, the couple divorced, and per the divorce decree, Dr Silber designated Barbara A. Silber as a 50% beneficiary of his death benefits in the TIAA-CREF plan.

>Dr Silber then married Barbara K Silber in 1992 and, in 1993, he altered the pension forms to designate his first and second wives each as 50% beneficiaries and his four children by the first wife as contingent beneficiaries.   However, in April 1998, Dr Silber, his current wife and his former spouse entered into a QDRO that waived any claims his then current wife might have to any part of Dr Silber’s pension plan; in exchange for a waiver by his former spouse to any claims she might have against the then current wife’s estate.   Not altered after the QDRO was issued was the beneficiary designation with the pension fund.

>After being agreed upon by all parties, a copy of the QDRO was delivered to TIAA-CREF, which spurred a letter from the plan’s administrator notifying Silber that he may want to change the beneficiary designations on his pension plan.   Dr Silber did not respond to the letter and later that year passed away.   

>Following his passing, his second wife sought a declaration that she was entitled to 100% of the TIAA-CREF death benefits, alleging that the QDRO constituted a waiver of the first wife’s rights in the death benefits and that the change of beneficiary forms executed in 1993 was superseded by the QDRO.   A lower trial court determined the QDRO was a valid waiver of the former spouse’s claims.   The state appeals court affirmed this decision.  

The case is Silber v Silber, U.S., Number 02-170.