Court Opinion

ID: 8991573
Source: CourtListenerOpinion
Date Created: 2022-11-27 12:16:26.256355+00
Date Added: 2024-06-11T17:10:56.618672
License: Public Domain

FLETCHER, Circuit Judge,
dissenting:
I respectfully dissent.
In enacting the Retirement Equity Act, Congress sought to “provide for greater equity under private pension plans for workers and their spouses and dependents by taking into account changes in work patterns, the status of the marriage as an economic partnership, and the substantial contribution to that partnership of spouses who work both in and outside the home,” S.Rep. No. 98-575, 98th Cong.2d Sess. 1, reprinted in U.S.Code Cong. & Ad.News 2547 (1984). The Act recognizes that both the employee and non-employee spouse make substantial contributions to the economic partnership formed by marriage, and that both have an interest in the pension benefits of the employee. The majority’s opinion turns the purpose of the Act on its head, somehow discerning within it an intent on the part of Congress to deprive the non-employee spouse of property rights in the pension granted her under state law. As amended by the REA, the majority tells us, ERISA would allow the employee spouse to bequeath his property interest in the pension plan to any third party he chooses; should the non-employee spouse seek to make a bequest of her property interest in the pension plan for the benefit of her children, however, the majority tells us, she would do “major damage” to the policies underlying ERISA. As a matter of law, policy, and common sense the decision cannot be justified.
I.
Contrary to the doubt expressed by the majority as to whether state law authorizes a bequest by a spouse of her community property interest in her spouse’s pension, California law clearly authorizes a bequest of the type at issue. The district court relied on California’s “terminable interest rule” as a ground for barring the decedent’s bequest. California, however, has *1461both by legislative and judicial pronouncement reversed the terminable interest rule.
The California Supreme Court announced the terminable interest rule in Benson v. City of Los Angeles, 60 Cal.2d 355, 33 Cal.Rptr. 257, 384 P.2d 649 (1963), and explicated it in Waite v. Waite, 6 Cal.3d 461, 99 Cal.Rptr. 325, 492 P.2d 13 (1972). “Briefly stated, this judicially created rule recognize[d] that an interest in a retirement plan traceable to contributions of community funds or to community labor constitutes community property; however, the interest of the non-participant spouse does not extend to benefits payable after the death of either spouse.” Chirmside v. Board of Administration, 143 Cal.App.3d 205, 208, 191 Cal.Rptr. 605 (1983) (footnote omitted). As laid out by the California Supreme Court, the rule consisted of two separate tenets. First, the terminable interest doctrine postulated that the community interest in accrued benefits did not survive the death of the employee spouse. Thus, the non-employee spouse could not claim any pension benefits accrued during the marriage if the employee spouse designated a third party to receive them after his death. Second, the terminable interest doctrine postulated that the non-employee spouse’s interest terminated upon the death of the employee spouse, so that the non-employee spouse could not bequeath those benefits by will. See Bowman v. Bowman, 217 Cal.Rptr. 174, 176, 171 Cal.App.3d 148, 152 (1985) (citing Culhane, Terminable Interest Doctrine, 14 Sw.U.L.Rev. 613, 615-16 (1984)).
The terminable interest doctrine existed uneasily in California law for the next two decades as courts critical of its rationale either followed it with obvious reluctance, see, e.g., In re Marriage of Peterson, 41 Cal.App.3d 642, 115 Cal.Rptr. 184 (1974), or sought to elude the dictates of the rule by limiting its application to continually narrower factual circumstances, see, e.g., Bowman v. Bowman, 171 Cal.App.3d 148, 217 Cal.Rptr. 174 (1985); Chirmside v. Board of Administration, 143 Cal.App.3d 205, 191 Cal.Rptr. 605 (1983). Perhaps the California courts’ discomfort with the terminable interest rule was best summed up in In re Marriage of Peterson, 41 Cal.App.3d 642, 115 Cal.Rptr. 184 (1974), in which the Court of Appeals commented, “We do not believe the rule which we must follow is fair. [Husband’s] pension rights constitute a bundle to which [wife], as a partner in the community during the years of marriage contributed her equal share. Why should she be deprived of her right to any single stick in the bundle?” 115 Cal.Rptr. 184; see also Chirmside, 191 Cal.Rptr. at 607 (“The doctrine has been criticized by both legal commentators ... and the courts which must apply it_ The primary complaints include its patent unfairness to the non-employee spouse, its reliance on the implied repeal of statutes prohibiting the unilateral gift of community funds, and its failure to take into account the nature of the death benefits involved. All these criticisms have merit_”) (citations omitted).
The California legislature stepped in to recognize the validity of the criticism of the terminable interest rule by adding Civil Code Section 4800.8, which empowers a court to issue “whatever orders are necessary or appropriate to assure that each party receives his or her full community property share in any retirement plan, whether public or private, and including all survivor and death benefits.” Section 2, though uncodified, provides: “It is the intent of the Legislature to abolish the terminable interest rule as set forth in Waite v. Waite ... and Benson v. City of Los Angeles ... in order that retirement benefits shall be divided in accordance with Section 4800.” (Stats.1986, ch. 686, § 2, p. 471). Subsequent case law confirms that the “the much-criticized terminable interest rule has itself been terminated.” In re Estate of MacDonald, 213 Cal.App.3d 456, 261 Cal.Rptr. 653, 656 (1989); see Estate of Austin, 206 Cal.App.3d 1249,1253, 254 Cal.Rptr, 372, 373 (1988) (“the underlying premise ... that there is such a thing as a terminable interest has been legislatively abolished”); see also In re Marriage of Powers, 218 Cal.App.3d 626, 641, 267 Cal.Rptr. 350, 358 (1990) (“By abrogation of the terminable interest rule the Legislature affirmed the right of the non-employee *1462spouse to what was his or hers by virtue of the community effort and eliminated a windfall profit to the employee spouse. This basic objective of the statute is not dependent on whether the non-employee spouse is living or dead at the time these rights accrue.”). Consequently, “under section 4800.8, the community property interest of a non-employee spouse is now inheritable.” Id,., 267 Cal.Rptr. at 360.
II.
Contrary to the majority’s opinion, the non-employee spouse’s community property interest in the pension that is created by California law poses no conflict with federal law that justifies preemption. The majority holds that ERISA preemption precludes the disposition of the property interest at issue in this case by the non-employee spouse based on its determination that the testamentary transfer of spouse’s interest in a pension plan is not encompassed within the QDRO exception to ERISA’s spendthrift provision. By construing the appellant’s claim in this manner, the majority gives short shrift to the chief thrust of appellant’s argument: that the QDRO issue need not be reached at all because California community property law does not create a fundamental conflict with ERISA’s spendthrift provision. Appellant’s argument is squarely on target.
A.
The Supreme Court requires that the preemptive effect of ERISA be construed narrowly where state family-property law is at issue:
“The whole subject of domestic relations of husband and wife, parent and child, belongs to the laws of the States and not to the laws of the United States.” On the rare occasion when state family law has come into conflict with a federal statute, this Court has limited review under the Supremacy Clause to a determination whether Congress has “positively required by direct enactment” that state law be preempted.... A mere conflict in words is not sufficient. State family and family-property law must do “major damage” to “clear and substantial” federal interests before the Supremacy Clause will demand that state law be overridden.
The approach must be practical.... The pertinent questions are whether the right as asserted conflicts with the express terms of federal law and whether its consequences sufficiently injure the objectives of the federal program to require nonrecognition.
Hisquierdo v. Hisquierdo, 439 U.S. 572, 581-83, 99 S.Ct. 802, 808-09, 59 L.Ed.2d 1 (1979) (citations omitted). Thus, the appel-lee may not prevail in this case simply by showing a mere conflict between the bequest and the language of ERISA, or by showing that Congress did not contemplate the type of bequest at issue here. Rather, in order to prevail, the appellee must demonstrate that California law allowing the non-employee spouse to bequeath her community property share of pension benefits would do “major damage” to “clear and substantial” federal interests. See Operating Engineers’ Local No. 428 Pension Trust Fund v. Zamborsky, 650 F.2d 196, 199 (9th Cir.1981) (“In Hisquierdo ..., the Court clearly sets out the standard by which this case must be judged.... By enacting ERISA, Congress has not ‘positively required by direct enactment’ that garnishments of the sort at issue here be preempted.”). This he has utterly failed to do.
B.
ERISA’s spendthrift provision states simply that “[ejach pension plan shall provide that benefits provided under the plan may not be assigned or alienated.” 29 U.S.C. § 1056(d)(1). Because the property transfer does not fall explicitly into the QDRO exception created by the REA, the majority, with only a cursory analysis of ERISA and the proper application of the spendthrift provision, holds that ERISA’s spendthrift provision precludes application of California law. The case law and legislative history preceding the REA belie this conclusion.
It became clear shortly after ERISA’s passage in 1974 that Congress had left *1463open a major question concerning the interpretation of the statute: whether the spendthrift provision enacted in that year preempted state court orders directing transfer of pension benefits incident to divorce and separation to the non-employee spouse and dependents. While the generally worded language of the spendthrift provision on its face would seem to preclude such transfers, “[o]n the other hand, it is a commonplace that a literal interpretation of the words of a statute is not always a safe guide to its meaning.” Cartledge v. Miller, 457 F.Supp. 1146, 1154 (S.D.N.Y.1978) (quoting Peter Pan Fabrics v. Martin Weiner Corp., 274 F.2d 487, 489 (2d Cir.1960) (L. Hand)).
The issue of whether the spendthrift restriction applied to spouses was raised in case after case. See, e.g., Savings & Profit Sharing Funds of Sears Employees v. Gago, 717 F.2d 1088 (7th Cir.1983); Bowen v. Bowen, 715 F.2d 559 (11th Cir.1983) (per curiam); Operating Engineers’ Local No. 428 v. Zamborsky, 650 F.2d 196 (9th Cir.1981); A.T. & T. v. Merry, 592 F.2d 118 (2d Cir.1979); Cody v. Riecker, 594 F.2d 314 (2d Cir.1979); Ball v. Revised Retirement Plan, 522 F.Supp. 718 (D.Col.1981); Central States, Southeast & Southwest Areas Pension Fund v. Parr, 480 F.Supp. 924 (E.D.Mich.1979); Senco of Florida, Inc. v. Clark, 473 F.Supp. 902 (M.D.Fla.1979); Cartledge v. Miller, 457 F.Supp. 1146 (S.D.N.Y.1978); Western Electr. Co. v. Traphagen, 166 N.J.Super. 418, 400 A.2d 66 (1979); Biles v. Biles, 163 N.J.Super. 49, 394 A.2d 153 (1978); Wanamaker v. Wanamaker, 93 Misc.2d 784, 401 N.Y.S.2d 702 (Fam.Ct.1978). Two features of these eases are relevant to determination of the issue at hand. First, the debate was confined to issues of property division and support rights in the divorce or separation context. Application of marital property laws in the context of testamentary bequests was not an issue in this hotly and frequently waged debate in the courts, perhaps because most states either failed to recognize a spousal interest in the other spouse’s pension or, as with California during this period, considered such interests to be terminated at death.1
Second, virtually every court to consider this issue, including this circuit, and every case cited above, recognized that Congress had not intended for the spendthrift provision, despite its general wording, to apply to family property rights in the divorce/separation context. But see General Motors Corp. v. Townsend, 468 F.Supp. 466 (E.D.Mich.1976). Some of these decisions were based on the courts’ perception that Congress did not intend to preclude spousal and child support that the employee’s spouse and children depended upon for their well-being, a factor not relevant here. However, many decisions rested on a rationale applicable to testamentary bequests as well: that the spendthrift provision was not intended to apply to any transfers or allocations between the employee and his or her spouse and dependents. As stated by the Second Circuit:
The purpose of the proscription on alienation and assignment is to protect an employee from his own financial improvidence in dealings with third parties. The provision is not intended to alter traditional support obligations but rather to assure that the employee and his beneficiaries reap the ultimate benefits due upon retirement.
AT & T v. Merry, 592 F.2d at 124.
The Supreme Court of California phrased the proposition in a different way in Mar*1464riage of Campa, 89 Cal.App.3d 113, 152 Cal.Rptr. 362, appeal dismissed, 444 U.S. 1028, 100 S.Ct. 696, 62 L.Ed.2d 664 (1980). According to the court,
The Fund points to ERISA’s restrictions on assignment or alienation of pension benefits ... as evidence of Congress’ concern that the pension benefits be preserved intact until an employee reaches retirement age. But dividing the benefits, once they are received, between an employee and his former spouse in no way clashes with this objective. It merely assures that the ex-wife partakes of the pension to the extent that it was earned as a result of the community effort.... Her rights are those of an owner, not a creditor.
89 Cal.App.3d at 125, 152 Cal.Rptr. at 368 (citations omitted) (emphasis added). For this reason, the California Court of Appeal in Campa held that ERISA does not preempt a state court order in a marriage dissolution action that requires the trustees of a pension plan to divide pension payments between the employee and his or her ex-spouse. After the California Supreme Court denied the pension plan’s petition for rehearing, 89 Cal.App.3d at 132, 152 Cal.Rptr. at 362, the United States Supreme Court entered a summary dismissal for want of a federal question. 444 U.S. 1028, 100 S.Ct. 696, 62 L.Ed.2d 664 (1980); see Stone v. Stone, 632 F.2d 740 (9th Cir.1980), cert. denied, 453 U.S. 922, 101 S.Ct. 3158, 69 L.Ed.2d 1004 (1981). As this circuit has recognized, the Supreme Court’s summary dismissal operated as a decision on the merits for those questions presented in the jurisdictional statement. See Carpenters Pension Trust v. Kronschnabel, 632 F.2d 745, 748 (9th Cir.1980), cert. denied, 453 U.S. 922, 101 S.Ct. 3159, 69 L.Ed.2d 1004 (1981). In Campa, the jurisdictional statement set forth the following question: “Do the provisions of Title I of the Employee Retirement Income Security Act, commonly known as ERISA, supersede the provisions of the California community property law and implementing statutes and court rules insofar as they relate to an employee benefit plan covered by the Act?” This circuit has determined that, by dismissing the appeal, the Supreme Court necessarily found the answer to this question to be “no.” Kronschnabel, 632 F.2d at 748.
Even those courts unwilling to find a blanket exception to the spendthrift provision for spouses recognized that the intent of Congress to apply this provision to spouses was not so clear as to warrant preemption where underlying policies were not in conflict. As stated by the Seventh Circuit:
[T]he Supreme Court has instructed us that when courts face a potential conflict between state domestic relations law and federal law, the strong presumption is that the state domestic relations law is not preempted:
On the rare occasion when state family law has come into conflict with a federal statute, this court has limited review under the Supremacy Clause to a determination whether Congress has “positively required by direct enactment” that state law be preempted. A mere conflict in words is not sufficient. State family and family-property law must do “major damage” to “clear and substantial” federal interests before the Supremacy Clause will demand that state law be overridden.
Hisquierdo v. Hisquierdo, 439 U.S. 572, 581, 583 [99 S.Ct. 802, 808, 809] (citations omitted).... [T]he case before us does not present such strong and clearly defined federal interests.
Saving & Profit Sharing Fund of Sears Employees v. Gago, 717 F.2d 1038, 1041-43 (7th Cir.1983).
Thus, prior to passage of the REA, all courts, including this one, were in virtual agreement that the spendthrift clause did not stand as a bar to recognition of a state marital property interest in a spouse’s pension in all contexts. Further, there was strong support for the proposition that the spendthrift restriction did not apply to marital property law in any context.
C.
The REA was passed against this legal backdrop. In it, Congress attempted to *1465settle the battle being waged in the courts over spousal support rights in the ERISA context and to ensure that spouses were not deprived of these rights. It did so by explicitly codifying an exemption from ERISA’s spendthrift restrictions for awards of pension rights to ex-spouses in divorce and separation proceedings. The legislative history of the bill, in explaining the need for the QDRO, refers to the battle waged in the courts: “[t]here is a divergence of opinion among courts as to whether ERISA preempts State community property laws insofar as they relate to the rights of a married couple to benefits under a pension, etc., plan.” 1984 U.S.Code Cong. & Ad.News at 2565 (footnote omitted). It characterizes the effect of the QDRO as explanatory rather than restrictive: “the bill clarifies that such [a qualified domestic relations] order does not result in a prohibited assignment or alienation of benefits under the spendthrift provisions of the Code or ERISA.” Id. at 2549 (emphasis added). While the majority argues that Congress, by phrasing the QDRO as an exemption from ERISA’s spendthrift restrictions “expressly chose not to” except probate orders from the spendthrift restriction, there is no indication in the legislative history that the issue of probate orders was considered by Congress, at all. As Congress sought to resolve the debate waged in courts regarding the issue of divorce and separation, and as no debate had yet emerged on the issue of probate, it is unsurprising that the issue of probate orders never reached Congress.
While the majority seeks to apply the REA in a way that somehow operates to preempt community property law in the testamentary context, the legislative history of the REA supports exactly the opposite conclusion. The REA was passed in order to protect the rights of non-employee spouses, generally women, by recognizing that they, too, had an interest in the pension earned by the working spouse. Congress attempted to effectuate this objective by instituting the QDRO exception to the spendthrift provision in order to resolve the issue plaguing the courts by clarifying that state marital property law in the divorce/ separation context was not preempted. At the same time, it set up annuity provisions to ensure that the non-employee spouse received a share of the pension benefits in the event the employee spouse predeceased her. The specific encodement of these provisions in order to “tak[e] ... into account changes in work patterns, the status of the marriage as an economic partnership, and the substantial contribution to that partnership of spouses who work both in and outside the home,” was clearly not meant to strip the non-employee spouse of the benefit of other state laws also based on principles of equity between the employee and non-employee spouse. S.Rep. No. 98-575, 98th Cong.2d Sess. 1, reprinted in U.S.Code Cong. & Ad.News 2547 (1984).
Moreover, the REA’s basic premise of equity for the non-working spouse supports the proposition that the REA is not intended as a bar to testamentary disposition of plan benefits by the non-employee spouse. The majority concedes that a predeceasing employee spouse may properly bequeath any remaining portion of ERISA benefits to a third party. Majority opinion, at 1457 n. 12; see also Art Builders Profit Sharing Plan v. Boseley, 649 F.Supp. 848, 851 (D.Md.1986); Profit Sharing Plan v. MBank Dallas, 683 F.Supp. 592, 595 (N.D.Tex.1988); Naddeo v. Officers & Employees Pension Plan, 637 F.Supp. 82, 84 (E.D.Pa.1986). Congress’ stated goal of ensuring that both parties to a marriage are to be viewed as part of an economic partnership in which both partners have an interest in the pension benefits surely cannot be offended by the application of state community property law that would allow the non-employee spouse the same right to bequeath her interest in the retirement plans.
D.
As Congress’ passage of the REA cannot properly serve as the basis of a finding that ERISA preempts the bequest at issue simply because it does not fall into the QDRO exception to ERISA, the issue must be considered on its own merits. As generally recognized by courts prior to passage of the REA, simply because the general *1466wording of the spendthrift provision would appear to encompass spouses is not sufficient to find preemption. Only if California property law does “major damage” to “clear and substantial” federal interests at issue in ERISA is it preempted.
I submit that the spendthrift provision does not require preemption in this case. First, the spendthrift provision should not apply as between spouses as “the purpose of the proscription on alienation and assignment is to protect an employee from his own financial improvidence in dealing with third parties.” AT & T v. Merry, 592 F.2d 118 (2d Cir.1979); see also Guidry v. Sheet Metal Workers Nat’l Pension Fund, 493 U.S. 365, 110 S.Ct. 680, 687, 107 L.Ed.2d 782 (1990) (the anti-alienation provision was enacted “to safeguard a stream of income for pensioners (and their dependents, who may be, and perhaps usually are, blameless)”) (emphasis added). A spouse is not a third-party creditor who Congress intended to bar.
Second, even were we to assume that the spendthrift provision applies to transfers or allocation between an employee and his or her spouse, the bequest in this case by a non-employee spouse of her community property to her own children poses no fundamental conflict with clear and substantial interests protected by ERISA. The majority attempts to argue that such a bequest would conflict with Congress’ goal of ensuring pension protection for spouses who reach retirement age and their dependents. According to the majority, the bequest “illustrates the manner in which the general statutory purpose of ensuring a stream of income to pensioners and their dependents would be frustrated: Rather than preserving the funds for the use of the employee spouse and his dependents, the dissent would allow a deceased non-employee spouse to strip the living employee spouse and his dependents of pension benefits, in order to transfer those benefits to third parties.” Opinion at 1460 n. 17. The majority’s contention is completely undercut by its concession that ERISA allows the employee spouse to bequeath his share of the community property interest in any manner he chooses if he predeceases a non-employee spouse. Such a bequest to someone other than his dependents would also “strip the ... dependents of pension benefits in order to transfer those benefits to third parties.” Clearly Congress, while seeking to protect the living, has determined that not all pension funds need to be preserved for the living in order to satisfy this goal when one spouse dies. The majority provides no explanation for how the non-employee spouse’s bequest would frustrate ERISA’s purpose when the concededly authorized bequest of an employee-spouse to a third party would not.2 In *1467addition, given Congress’ explicit statement in enacting the REA that it seeks to “provide for greater equity under private pension plans,” application of California’s community property law in this instance would actually further a substantial federal interest.
The majority seeks to bolster its tenuous argument that the spendthrift provision applies to the transaction at issue on the ground that “the United States Supreme Court has consistently held that spendthrift provisions do apply, in general, to [inter-spousal] transactions.” Majority Opinion, at 1458. According to the majority, “[t]he Court has noted a possible exception to the broad sweep of anti-alienation provisions in the case of alimony and child support, but has generally refused to extend this exception to other forms of community property.” The cases cited by the majority in support of this proposition, however, all involve federal programs, which are based on considerably different statutory schemes, and which use federal money. In Hisquierdo v. Hisquierdo, 439 U.S. 572, 99 S.Ct. 802, the Supreme Court specifically distinguished such federal programs from ERISA:
In this case [involving a federal program], Congress has granted a separate spouse’s benefit, and has terminated that benefit upon absolute divorce. Different considerations might well apply where Congress has remained silent on the subject of benefits for spouses, particularly where the pension program is a private one which federal law merely regulates. See Employment Retirement Income Security Act of 1974, 88 Stat. 829, 29 U.S.C. § 101 et seq. Our holding intimates no view concerning the application of community property principles to benefits payable under programs that possess these distinctive characteristics.
Hisquierdo, 439 U.S. 572, 590 n. 24, 99 S.Ct. 802, 813 n. 24, 59 L.Ed.2d 1 (1979); see also Savings & Profits Sharing Fund of Sears Employees v. Gago, 717 F.2d 1038 (7th Cir.1983) (“We think both McCarty and Hisquierdo are quite distinguishable from the ease before us. In both those cases very specific federal concerns about the goals and administration of federal programs were identified, requiring the preemption of state law. That no similarly identifiable federal concerns seem to be protected by section 206 makes it at least more likely that Congress, in enacting section 206 of ERISA, did not intend to rebut the presumption of non-preemption of state domestic relations law.”). In fact, in contrast to the Court’s treatment of these other cases, the Supreme Court, in dismissing In re Marriage of Campa, 89 Cal.App.3d 113, 152 Cal.Rptr. 362 (1979), appeal dismissed, 444 U.S. 1028, 100 S.Ct. 696, 62 L.Ed.2d 664 (1980), a pre-REA case, held that ERISA does not preempt state community property law. See Carpenters Pension Trust v. Kronschnabel, 632 F.2d 745, 747 (9th Cir.1980). Thus, where ERISA is concerned, the Court has already held that the existence of ERISA’s anti-alienation provision does not serve as an absolute bar that preempts application of state community property law.3
*1468The majority attempts to argue that the scheme it conceives Congress to have created is a sensible one. It tells us that, because pensions are designed “to ensure that both spouses would receive sufficient funds to afford them security during their lifetimes,” it makes sense to ensure that the pension is not transferable when the non-employee spouse dies. The majority does not explain how, from the perspective of protecting the living, it makes sense to allow the employee spouse to bequeath his interest in a pension but not to allow the non-employee spouse to bequeath her interest.
Finally, the majority suggests that Congress intended a counterintuitive and unjust result: if the decedent had divorced her spouse before she died, she would have received as a matter of right her community interest in the pension earned as a result of her community effort and obviously could have bequeathed it. Having remained married, however, she forfeits her property rights in the pension plan and has nothing to bequeath to her family. Certainly Congress could not have intended these anomalous consequences.4
III.
The majority opinion appears to be premised on the outmoded notion that those who forgo careers to work in the home while their partners work outside it are not full partners in the economic partnership thereby formed. Such spouses, the majority acknowledges, are entitled to an interest in the pension if they are left widowed or divorced and therefore may not be able to provide for themselves. Barring these dire circumstances, however, the opinion suggests, they are not entitled to any control over the disposition of the benefits as against the other spouse who has “really earned” them and should be able to dispose of them as he wishes.5 In passing the REA, Congress rejected such outmoded notions of marital property rights; it clearly proclaimed that a spouse’s interest in the pension is a matter of right, not charity. *1469By turning Congress’ intent on its head to find preemption in this case, the majority strips away the rights of those very persons Congress intended to protect.
I would reverse.

. I have located only one district court case in which the issue of ERISA preemption was raised in the testamentary context prior to passage of the REA, Employees Sav. Plan of Mobil Oil Corp. v. Geer, 535 F.Supp. 1052 (S.D.N.Y.1982). In that case, the district court considered whether the non-employee spouse’s right under state law to a community property interest in the predeceasing employee spouse’s pension was preempted. The court in that case based its finding that ERISA did not preempt state community property law in this context on the ground that ”[i]f the expectation of retirement benefits may be reached despite ERISA’s express prohibition of assignment or alienation, then surely the final distribution of a decedent’s vested interest in a plan cannot escape the application of community property principles.” Id. at 1057. Congress addressed the issue of providing for a non-employee spouse who is predeceased by an employee spouse in the annuity provisions of the REA. It is the situation in which the non-employee spouse predeceases the employee spouse which is at issue here.

. The majority suggests that if Congress were to be true to its objective of seeking to ensure the financial well-being of retired employees and their spouses during their lifetimes, it would prohibit both spouses from bequeathing pension benefits without the consent of the other. It further suggests that "[w]ere the dissent to take a position that was truly consistent both with its principle of equal treatment and with the statutory objective of providing financial security for the elderly, it would likewise advocate that view." Op. at 1457 n. 12. The majority seems to miss the question to be answered. It is not whether Congress has crafted the most perfect statute possible to meet the goal of affording employees and their spouses lifetime security, or whether the dissent could craft a better one, but whether state marital property law fundamentally conflicts with the statute that Congress has, in fact, created.
The majority's explanation for why a testamentary disposition of a predeceasing employee does not violate ERISA while a testamentary disposition of his predeceasing spouse does is equally fundamentally flawed. According to the majority:
It is true that under ERISA a predeceasing employee spouse can, under some circumstances, name a beneficiary for part of his pension benefits. But that is only because the statute presently affords him a greater pension benefit than the non-employee spouse. If the employee spouse dies first, he cannot designate a beneficiary for the pension to which the surviving spouse is entitled as a survivor’s annuity. He can only bequeath the excess portion of the pension. The beneficiary can receive only the excess portion of the pension. When the non-employee spouse dies first, there is no excess: under ERISA the surviving employee spouse is entitled to 100% of his pension.
Id. The explanation begs the question. The surviving employee spouse is entitled to 100% of his pension only if state marital property law not preempted by ERISA allows him control of the whole. As the above analysis makes clear, *1467California marital property law does not entitle the surviving employee spouse control over 100% of his pension.
Insofar as the majority may be arguing that the REA annuity provisions themselves conflict with state community property law, this argument, too, fails. The annuity provisions created by the REA were intended to provide the nonparticipant spouse protection during her life. They address only two circumstances: the pre- and post-retirement death of a participant spouse. They say nothing about the pre- or post-retirement death of a predeceasing non-employee spouse and certainly cannot be read as creating the testamentary disenfranchisement of a predeceasing spouse. As argued by the executor, these provisions are "barren of any language of ‘positive requirement’ by 'direct enactment' which supersedes and preempts Decedent's state law rights.” Appellant’s Opening Brief (filed July 28, 1989), at 31-32.

. The majority also cites Guidry v. Sheet Metal Workers National Pension Fund, 493 U.S. 365, 110 S.Ct. 680, 107 L.Ed.2d 782 (1990), for the proposition that in the absence of an explicit exception to ERISA's spendthrift clause, alienation of an employee's benefits is prohibited. Guidry concerned whether a constructive trust could be placed on pension benefits in favor of a union where the employee had embezzled funds from the union. The Supreme Court stated that an explicit exception was required to impose such a constructive trust in favor of a *1468third party on the ground that the spendthrift provision "reflects a considered congressional policy choice, a decision to safeguard a stream of income for pensioners (and their dependents, who may be, and perhaps usually are, blameless ), even if that decision prevents others from securing relief for the wrongs done them.” 110 S.Ct. at 687 (emphasis added). The Supreme Court conceived of the spendthrift clause as barring transfers to third parties rather than to spouses.

. Neither, I submit, did Congress intend to introduce the blatant disparities in treatment between the dependents of the employee spouse and the dependents of the non-employee spouse that the majority contends ERISA mandates. The majority bases its contention on general language in the legislative history concerning ERISA’s purpose stating that Congress sought to protect "employees and their dependents," without mentioning the dependents of the employee's spouse. On this basis, the majority asserts, the decedent's bequest of her interest in the pension to her children violates ERISA’s statutory purpose whereas presumably a bequest by the employee to his children would further ERISA’s statutory purpose. Given Congress' recognition in the REA that marriage is an economic partnership and of the substantial contribution to that economic partnership of both spouses, I would not impute to Congress the intent to distinguish between the dependents of the employee and the dependents of the spouse with reference to benefits. As both the employee and spouse contributed to the economic partnership, in my view, Congress would consider the protection of both groups of dependents to be a goal of ERISA.

. The opinion concludes that the non-employee spouse does not have the same right to testamentary transfer of the pension assets as the employee spouse by framing the issue on the assumption that the worker, not the spouse, is the real owner of the pension: it holds that "an employee whose pension interests are covered by ERISA may not be so divested of his entitlement.” Op. at 1452 (emphasis added). Properly framed, the issue is whether the decedent, as one-half of an economic partnership, has a right to transfer her entitlement in the plan benefits pursuant to state marital property law.
Moreover, in justifying the scheme the majority contends Congress intended, it suggests the employee is entitled to his pension, while the employee’s spouse is entitled only to some lesser degree of protection:
Congress wanted to ensure that workers would have the security of a fair pension for their lifetimes. Congress also wanted surviving spouses to have what it considered a reasonable degree of security. In this connection, Congress wisely deemed it necessary to protect the divorced spouse for the remainder of her lifetime.
Majority opinion at 1457.