Court Opinion

ID: 9498358
Source: CourtListenerOpinion
Date Created: 2023-08-05 17:15:37.097955+00
Date Added: 2024-06-11T17:58:47.433958
License: Public Domain

BECKER, Circuit Judge,
concurring.
I agree with the result reached in Part III.A of Judge Van Antwerpen’s opinion, which holds that we should embrace the “minority rule,” thus rendering ineffective Rosemary’s purported waiver of her rights as beneficiary and McGowan’s subsequent nomination of his present wife, Donna, as the new beneficiary. I also agree with Judge Van Antwerpen’s disposition, in Part III.B, of the civil penalties issue. As *251the foregoing suggests, I join in the judgment affirming the District Court.
Judge Van Antwerpen relies on three theories to support his conclusion that Rosemary’s waiver is ineffective. First, he reasons that, because the Plan documents in this case designate Rosemary as the beneficiary, any requirement imposed on Plan administrators to look beyond these documents would violate the specific command of 29 U.S.C. § 1104(a)(1)(D). Second, and relatedly, he argues that this holding is necessary to promote one of the principal goals underlying ERISA — ensuring that “plans be uniform in their interpretation and simple in their application.” McMillan v. Parrott, 918 F.2d 310, 312 (6th Cir.1990). Third, he points out that recognition of Rosemary’s waiver in this case would contravene ERISA’s prohibition of assignment or alienation of benefits under 29 U.S.C. § 1056(d)(1). I write separately to explain why I disagree with the first and second justifications, and thus do not join Part III.A.1. I agree with the third justification, and thus join Part III. A.2. However, since Judge Van Antwer-pen’s discussion of that point is brief, I think it useful to expand upon it, and begin with that issue.
I.
The anti-alienation or spendthrift provision, 29 U.S.C. § 1056(d), provides:
Assignment or alienation of plan benefits
(1) Each pension plan shall provide that benefits provided under the plan may not be assigned or alienated.
As Judge Van Antwerpen notes, “assignment” or “alienation” is defined by regulation to include:
Any direct or indirect arrangement (whether revocable or irrevocable) whereby a party acquires from a participant or beneficiary a right or interest enforceable against the plan in, or to, all or any part of a plan benefit payment which is, or may become, payable to the participant or beneficiary.
26 C.F.R. 1.401(a)-13(c)(l)(ii).7 Under this definition, I think that the purported waiver in this case was clearly a prohibited assignment or alienation. Rosemary’s waiver was more than a renunciation of her right to benefits under the plan; rather, it was an attempt to transfer her interest in the plan to McGowan, with the expectation that he would then be permitted to assign that interest to someone else, as he in fact attempted to do on two separate occasions. I see nothing in the anti-alienation provision that excepts transfers from plan beneficiaries to plan participants, particularly when the plan participant then seeks to transfer that interest to a third party. The purported waiver in this case fits squarely within the definition of assignment or alienation as an “indirect arrangement ... whereby a party acquires from a participant or beneficiary a right or interest enforceable against the plan.” ■
In this context, it is also useful to reference the QDRO provisions, for they shed additional light upon the subject. Congress added the QDRO provisions at the same time it required plans to offer benefits in the form of qualified joint and survivor annuities. See Retirement Equity Act of 1984, Pub.L. No. 98-397, 98 Stat. 1426 (1984). I believe that Congress saw QDROs as the only means by which a participant or beneficiary could assign or *252alienate his or her interest in the plan.8 This is confirmed by the language from the 1984 Senate Report noting that, absent a QDRO, the participant’s first spouse is still entitled to benefits upon the participant’s death.9 Since the waiver at issue in this case was not a QDRO, it is prohibited by ERISA’s anti-alienation clause.
Nevertheless, some courts have concluded that the anti-alienation clause was intended solely to prevent the participant from alienating his or her benefits and should not act to prevent a secondary beneficiary from alienating his or her rights. For instance, Judge Harlington Wood, Jr., speaking for the full Court of Appeals for the Seventh Circuit, stated:
The spendthrift provisions of ERISA are designed to “ensure that the employee’s accrued benefits are actually available for retirement purposes,” by preventing unwise assignment or alienation. These provisions focus on the assignment or alienation of benefits by a participant, not the waiver of a right to payment of benefits made by a designated beneficiary.
Fox Valley & Vicinity Constr. Workers Pension Fund v. Brown, 897 F.2d 275, 279 (7th Cir.1990) (en banc) (citation omitted); see also Estate of Altobelli v. International *253Business Machines Corp., 77 F.3d 78, 81 (4th Cir.1996) (“We agree with the Seventh Circuit that the anti-alienation clause does not apply to a beneficiary’s waiver.”).
This approach is not without appeal. It does seem untoward that McGowan should not be able to have his pension awarded to his present wife, rather than to a woman from whom he is long divorced. The anti-alienation clause, however, does not distinguish between benefits provided to participants and those provided to secondary beneficiaries; rather, it simply states that “benefits provided under the plan may not be assigned or alienated.” 29 U.S.C. § 1056(d)(1). Additionally, while the legislative history supports the view that the purpose of the clause was to prohibit a spendthrift from unwisely selling his or her interests in a plan, there is no reason why this focus of this concern should be limited to plan participants. If, hypothetically, McGowan were still married to Rosemary, but she wanted to sell her rights under the plan, I believe that most courts would find such a sale to be prohibited. This view finds support in Judge Easter-brook’s dissenting opinion in Fox Valley:
Although the majority holds that this rule applies only to “participants” in a pension plan as 29 U.S.C. § 1002(7) defines that term, it is not so limited. Section 1056(d)(1) bars the assignment of “benefits” — that is, payments under the plan — without regard to the identity of the person making that assignment. Section 1056(d)(2) reinforces this in saying that “a loan made to a participant or beneficiary shall not be treated as an assignment or alienation”, an exemption unnecessary if the anti-alienation clause does not apply to beneficiaries in the first place. So Laurine could not have transferred the money to Dessie in exchange for a sofa — at least, Dessie could not have enforced the promise by attaching the benefits as they came in. Why, then, should Laurine be allowed to transfer the money to Dessie without getting a sofa?
897 F.2d at 283 (Easterbrook, J., dissenting).
In view of the foregoing, I do not see how the fact that McGowan and Rosemary are divorced changes this analysis. Since the waiver in this case occurred in the context of a divorce settlement, it would not be unreasonable to assume that Rosemary received something — perhaps not a sofa, but probably a greater share of some other portion of McGowan’s assets — in return for her agreement to waive her interest in McGowan’s pension plan. While Congress may have only intended to bar the “unwise” alienation of benefits, the plain language of the anti-alienation clause prohibits us from inquiring into the wisdom of a beneficiary’s decision to transfer her interest to someone else.
Finally, as Judge Van Antwerpen correctly notes, this interpretation finds further support in Boggs. In that case, the Court held that the anti-alienation clause preempted a state law permitting a testamentary transfer by a plan beneficiary. See 520 U.S. at 851,117 S.Ct. 1754. At the very least, Boggs stands for the proposition that the anti-alienation clause applies equally to beneficiaries and participants, and thus it implicitly rejects the reasoning relied on by the Seventh Circuit in Fox Valley.
For all these reasons, I agree with Judge Van Antwerpen that the anti-alienation clause prohibits Rosemary’s waiver.
II.
A.
, Most courts adopting the minority rule have not relied on ERISA’s anti-alienation clause; rather, like Judge Van Antwerpen, *254they have looked to 29 U.S.C. § 1104(a)(1). That section provides:
... [A] fiduciary shall discharge his duties with respect to a plan solely in the interest of the participants and beneficiaries and—
(D) in accordance with the documents and instruments governing the plan insofar as such documents and instruments are consistent with the provisions of this subchapter and subchap-ter III of this chapter.
Judge Van Antwerpen concludes that this provision “dictates that it is the documents on file with the Plan, and not outside private agreements between beneficiaries and participants, that determine the rights of the parties.” See Maj. Op. at 9. I am not persuaded that this is the case. In my view, § 1104(a)(1)(D) simply embodies the common-sense notion that a plan administrator should not take actions that are inconsistent with the plan’s guidelines. Nothing in the language prohibits the administrator from consulting other documents, insofar as those documents do not conflict with the language of the plan. Indeed, an administrator must consult other documents to determine whether a participant has obtained a valid QDRO.
In this regard, it is important to note that the provision authorizing QDROs explicitly states that such orders are exempt from ERISA’s anti-alienation clause but says nothing whatsoever about § 1104(a)(1)(D). This suggests that Congress simply did not see a conflict between the requirement that plan administrators perform their duties “in accordance with the documents and instruments governing the plan” and the requirement that they give effect to a transfer of benefits pursuant to a QDRO, underscoring my view that the real obstacle to the waiver in this case is the anti-alienation clause, not § 1104(a)(1)(D).
The plan documents in this case do not explicitly prohibit waivers of the sort Rosemary sought to execute.10 Rather, the documents mirror the statutory language regarding the ability of a participant to waive the qualified joint and survivor annuity provided his spouse consents and does so prior to the date the spouse begins receiving benefits. Thus, the Plan documents do not prohibit waivers of the sort at issue here.
B.
Judge Van Antwerpen also argues, in accord with many of the courts that have adopted the minority rule, that concerns of efficiency and uniformity justify refusing to permit a beneficiary to waive her right to benefits. I am not persuaded by this argument. While Congress clearly intended to promote the uniform and efficient operation of plans, I agree with McGowan that the increased burden on the plan in this case would be minimal, particularly in light of the fact that plan administrators must already review external documents to determine whether they qualify as QDROs.
Judge Van Antwerpen argues that it is inherently easier for plan administrators to evaluate purported QDROs, because the *255statutory authorization for such agreements provides specific criteria for doing so. But I see nothing that would prohibit us from using our authority to fashion federal common law in this area to develop similarly clear criteria for evaluating purported waivers.
In addition, as both parties acknowledge, plan administrators would need to make further actuarial calculations when a beneficiary waives her right to benefits. But administrators already need to make such calculations in the context of QDROs, and indeed in most cases of this genre. These kinds of calculations are de rigeur for plan administrators; it is the “stuff’ of their work. Thus, while there would be some additional burden, I do not think it is nearly as great as Judge Van Antwerpen suggests.
III.
For the above reasons, while I do not agree with some of the justifications offered in Judge Van Antwerpen’s opinion, I concur in the result and in the judgment. The plain language of ERISA prohibits waivers of the type at issue here, so we have no choice but to affirm the decision of the District Court.
McGowan v. NJR Service Corporation; New Jersey Natural Gas Company, No. 04-3620

. Neither party has challenged the validity of this definition, and the Supreme Court’s reliance on it in Boggs v. Boggs, 520 U.S. 833, 851, 117 S.Ct. 1754, 138 L.Ed.2d 45 (1997), suggests that we owe it deference.

. While I join in Part III.A.2 of the majority opinion, believing that Judge Van Antwerpen correctly interprets the Supreme Court's discussion of the QDRO provision in Boggs v. Boggs, 520 U.S. 833, 117 S.Ct. 1754, 138 L.Ed.2d 45 (1997), I feel constrained to note that the Supreme Court’s congressional silence jurisprudence is somewhat of a patchwork. To be sure, a number of cases use silence as evidence of legislative intent, see, e.g., Morrison-Knudsen Construction Co. v. Director, Office of Workers' Compensation Programs, 461 U.S. 624, 632-33, 103 S.Ct. 2045, 76 L.Ed.2d 194 (1983); Johnson v. Transportation Agency, 480 U.S. 616, 629 n. 7, 107 S.Ct. 1442, 94 L.Ed.2d 615 (1987). However, Justice Scalia dissented in Johnson, delivering a critique of the majority’s discussion of silence. First, Justice Scalia argued that the assumption that Congress's failure to amend a statute demonstrates that a prior judicial interpretation of the statute is correct should be abandoned because ”[i]t is based ... on the patently false premise that the correctness of statutory construction is to be measured by what the current Congress desires, rather than by what the law as enacted meant.” Id. at 671, 107 S.Ct. 1442 (Scalia, J., dissenting). Justice Scalia also argued that it is impossible to determine whether congressional silence demonstrates "(1) approval of the status quo, as opposed to (2) inability to agree upon how to alter the status quo, (3) unawareness of the status quo, (4) indifference to the status quo, or even (5) political cowardice.” Id. at 672, 107 S.Ct. 1442.
Moreover, a number of cases have rejected silence as evidence of legislative intent. See e.g. Fogerty v. Fantasy, Inc. 510 U.S. 517, 527-33, 114 S.Ct. 1023, 127 L.Ed.2d 455 (1994); Borough of Ridgefield v. New York Susquehanna & Western Railroad, 810 F.2d 57, 60 (3d Cir.1987).

. The Report stated:
The bill provides that a qualified joint and survivor annuity is not required to be provided by a plan unless the participant and spouse have been married throughout the one-year period ending on the earlier of (1) the participant’s annuity starting date (the first day of the first period for which an amount is received as an annuity (whether by reason of retirement or disability)), or (2) the date of the participant's death. If a participant dies after the annuity starting date, the spouse to whom the participant was married during the one-year period ending on the annuity starting date is entitled to the survivor annuity under the plan whether or not the participant and spouse are married on the date of the participant’s death. The rule does not apply, however, if a qualified domestic relations orders ... otherwise provides for the division for payment of the participant's retirement benefits. For example, a qualified domestic relations order could provide that the former spouse is not entitled to any survivor benefits under the plan.
S. Rep. No. 98-575, reprinted in 1984 U.S.C.C.A.N. 2547, 2561-62 (emphasis added).

. The applicable provision reads:
The Participant may exercise his right to elect an optional form of benefit at any time during the election period specific in paragraph (b) below; provided, however, that such election ... shall be effective only if made in writing on a form provided by the Committee for that purpose, signed by the Participant and delivered to the Committee during the election period. Such election form shall provide for the Participant to certify (i) that he revokes the automatic surviving spouse option or (ii) that he elects to be covered under such option....