Opinion ID: 3035622
Heading Depth: 2
Heading Rank: 4

Heading: interpretation of the plans

Text: Our interpretation of the effect of ERISA’s requirements for payment of benefits under a QPSA also tracks the Plans’ provisions and the plan administrators’ interpretations of that language, which are entitled to deference. See Nord v. Black & Decker Disability Plan, 356 F.3d 1008, 1010 (9th Cir. 2004) (holding that a plan administrator’s determinations are reviewed for an abuse of discretion where a plan gives the administrator discretionary authority to construe the terms of the plan).13 We must uphold the plan administrators’ decisions 13 The Children do not dispute that the Plans give their respective plan administrators discretionary authority to interpret plan terms, nor do they contend that a serious conflict of interest affected the plan administrators’ decisions which would merit de novo review. See Atwood v. Newmont Gold Co., Inc., 45 F.3d 1317, 1322-23 (9th Cir. 1995). 158 HAMILTON v. WASHINGTON STATE PLUMBING to deny the Children lump sum death benefits if they are based upon a reasonable interpretation of the plan’s terms and made in good faith. McDaniel v. The Chevron Corporation, 203 F.3d 1099, 1113 (9th Cir. 2000). Of course, because the Plans require conformance with ERISA, this review collapses, in practical terms, into a de novo review. Here, the Plans’ provisions are clear that, in the event of a Participant’s pre-retirement death, if a surviving spouse is entitled to an annuity then no lump sum death benefits are payable to the designated beneficiary.14 Section 7.01 of the National Pension Fund provides: [A] Lump Sum Death Benefit equal to the contribu- tions made by his Employers on his behalf shall be paid to his designated Beneficiary. However, if a Preretirement Surviving Spouse Pension is payable under Section 6.03, no Death Benefit will be paid under this Section, unless the Participant’s surviving Spouse elects to receive it in accordance with Section 6.03(d). In any event, no benefits shall otherwise be payable under this Section if a Preretirement Surviving Spouse Pension is payable to the Spouse of the Participant under Section 6.03. Similarly, §§ 7.03 and 7.05 of the State Plan provide: 14 Section 7.8 of the Supplemental Plan provides: Beneficiaries. A Participant may designate a Beneficiary to receive any amount payable upon the Participant’s death, subject to the following rules: (a) Rules applying to all designations ... (2) For a married Participant the designation of a Beneficiary other than the Participant’s spouse shall require the spouse’s consent . . . HAMILTON v. WASHINGTON STATE PLUMBING 159 [I]f a Participant is Vested and dies before retirement benefits commence . . . and no beneficiary of his is eligible for benefit payments under Section 7.01 [the Pre-Retirement Surviving Spouse Annuity] . . . , then his designated Beneficiary shall receive a lump sum death benefit. . . . [A] lump sum death benefit . . . shall be paid as a result of [participant’s] death if he dies before the date retirement benefits commence . . . provided, however, if the Participant is less than 55 years of age at his death, and if his surviving spouse will receive a Pre-Retirement Annuity Benefit under the terms of Section 7.01, then no lump sum death bene- fit shall be paid under this paragraph as a result of the death of the Participant. It is undisputed that Mary Hamilton meets the requirements for a preretirement surviving spouse annuity. Thus, the plan administrators’ decisions to deny the Children lump sum death benefits were based on a reasonable interpretation of the plan language, and the district court erred in concluding that the decisions were arbitrary and capricious. The Children point specifically to Article 6, § 6.05 of the National Pension Fund plan, which states that “[a]ny rights of a former Spouse or other alternate payee under a Qualified Domestic Relations Order, with respect to a Participant’s pension, shall take precedence over those of any later Spouse or the Participant under this Article.” The district court also relied on § 6.05 in determining that the National Pension Fund, by its own terms, was not obligated to pay Mary where a QDRO conferred rights on an alternate payee. The difficulty with this interpretation is that it does not take into account that the term “Spouse” is a defined term in the Plan and is distinguished from “Qualified Spouse,” another term used in Article 6. Section 6.01 defines “Spouse” and 160 HAMILTON v. WASHINGTON STATE PLUMBING “Qualified Spouse.” Throughout Article 6, the Plan distinguishes between use of the terms. For example, § 6.01(a) provides that, in general, a pension will be paid as a “50% Husband and Wife Pension” unless “the Participant and Spouse elect otherwise” or “the Spouse is not a Qualified Spouse.” (emphasis added.) Section 6.05 cannot be read to trump the rights of a “Qualified Spouse” as it expressly employs the term “Spouse.” Nor can it be read to mean that if the Children are deemed alternate payees, thus allowing them to defeat the rights of a later, un-Qualified “Spouse,” that their rights take precedence over a Qualified Spouse’s entitlement to a preretirement surviving spouse annuity. Section 6.03, the QPSA section, speaks only to the rights of a “Qualified Spouse.” Because Mary was married to Michael “throughout the twelve months” before “the date of death,” she is deemed a “Qualified Spouse,” and the designation of the Children as alternate payees would not trump her rights. The National Pension Fund points out that § 6.05 cannot be read in isolation, but must be read in conjunction with § 7.01, which states that no lump sum death benefits will be payable “if a Preretirement Surviving Spouse Pension is payable,” and § 6.01(d), which states that “[a] former spouse is a ‘Qualified Spouse’ if . . . the former Spouse is required to be treated as a Spouse or Surviving Spouse under a Qualified Domestic Relations Order.” The Fund contends that this reading is consistent with § 1056(d)(3)(F) of ERISA, which requires a QPSA to be paid to the surviving spouse unless a QDRO expressly assigns surviving spouse rights to a “former spouse.”15 15 The Fund provides substantial guidance with respect to QDRO drafting and coverage. Its brochure provides the following detailed information with respect to preretirement spouse benefits: The parties should note that if the Alternate Payee is named as the Surviving Spouse for the Participant’s entire benefit, any subsequent spouse of the Participant will receive no benefits upon HAMILTON v. WASHINGTON STATE PLUMBING 161 Not only do we determine this interpretation to be reasonable, but in this case, it is the only plan interpretation consistent with ERISA’s requirements. [13] We conclude that a surviving spouse benefit must be explicitly assigned to a former spouse in a QDRO in order to overcome the surviving spouse’s right to a QPSA under ERISA. The plan administrators’ decisions to deny the Children benefits were based on reasonable interpretations of the Plans’ terms, and the district court erred in granting summary judgment to the Children. We reverse the award of summary judgment, attorneys’ fees,16 costs, and prejudgment interest to the Children and remand this case to the district court for proceedings consistent with this opinion. REVERSED and REMANDED. the Participant’s death. The parties should also note that if the Alternate Payee is not designated as a Surviving Spouse for at least some portion of the Participant’s benefit, nothing will be payable to the Alternate Payee after the Participant’s death. For example, if the QDRO does not provide that the Alternate Payee is to be the Participant’s surviving spouse for the Preretirement Surviving Spouse Pension, and if the Participant dies before the Alternate Payee has begun receiving a benefit, no benefits will be paid under the QDRO. The advice is unambiguous. (emphasis added.) 16 Under 29 U.S.C. § 1132(g), a court may, in its discretion, award attorneys’ fees and costs “to either party;” however, attorneys’ fees and costs under § 1132(g) are ordinarily recovered by the prevailing party. See Honolulu Joint Apprenticeship and Training Committee of United Association, 332 F.3d 1234, 1239 (9th Cir. 2003).