Sandra D.T. GRIFFIN
David L. GRIFFIN, Deceased, c/o Kimberly Cowser-Griffin, Executrix of the Estate of David L. Griffin.
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J. Roger Griffin, Jr. (Christie, Kantor, Griffin, Smith & Harris, P.C., Virginia Beach, on brief), for appellant.
W. Hunter Old (Christopher T. Page; Kaufman & Canoles, P.C., Williamsburg, on brief), for appellee.
Present: HUMPHREYS, BEALES and HUFF, JJ.
[62 Va.App. 742] Sandra D.T. Griffin (" Mrs. Griffin" ) appeals the order of the Circuit Court of Sussex County (" circuit court" ) denying her [62 Va.App. 743] request for entry of a qualified domestic relations order ("QDRO" ), which she pursues so that a certain term of her prior divorce decree might be enforced. For the following reasons, we reverse the circuit court's order.
" When reviewing a [circuit] court's decision on appeal, we view the evidence in the light most favorable to the prevailing party, granting it the benefit of any reasonable inferences." Congdon v. Congdon, 40 Va.App. 255, 258, 578 S.E.2d 833, 835 (2003). However, the facts relevant to the resolution of this appeal are undisputed.
David L. Griffin (" Mr. Griffin" ) and Mrs. Griffin were married on March 20, 1987 and had two children, James J. Griffin, III, born on October 25, 1987, and Gloria D. Griffin, born on July 6, 1992. The parties were divorced by a final decree of divorce entered in the circuit court on August 12, 1998. The final decree of divorce (" final decree" ) incorporated the Separation and Property Settlement Agreement (hereinafter, " PSA" or " Agreement" ) entered into by the parties on August 30, 1996. The Agreement term that is the subject of this appeal reads: " The parties agree to name the children of the marriage as co-beneficiaries under all 401K Plans and other such plans which would be distributed upon the death of either party."
At the time of his death, Mr. Griffin was employed by Dominion Virginia Power (" Dominion" ). At Dominion, he qualified for retirement benefits and he elected a 401(k) plan, known as Dominion's Salaried Savings Plan (" Salaried Savings Plan" or " Plan" ), which is governed by the Employee Retirement Income Security Act (" ERISA" ). The Salaried Savings Plan is a defined contribution plan designed to encourage retirement savings. Dominion's contributions to the plan depend on the participant's contributions and years of service. There is no actuarial analysis to determine the participant's benefits, and the participant's life expectancy is not a consideration in the Salaried Savings Plan. Under the Salaried Savings [62 Va.App. 744] Plan, the surviving spouse is the beneficiary upon the participant's death unless she has consented to another beneficiary. The Salaried Savings Plan documents also provide that " if you are divorced, benefit payments from the Pension Plan or Savings Plan may be made to your former spouse, your child, or other dependent only in response to a Qualified Domestic Relations Order (QDRO)." The Dominion Plan Administrator testified that the Salaried Savings Plan is not a survivor annuity and it is strictly payable to the designated beneficiary.
In 2002, Mr. Griffin had named his children as his beneficiaries. However, Mr.
Griffin married Kimberly Cowser-Griffin (" Cowser-Griffin" ) in 2007, and in 2008 Mr. Griffin named Cowser-Griffin as his beneficiary for most of his funds, including the Salaried Savings Plan. He named his children only as contingent beneficiaries on the Salaried Savings Plan. Shortly after his marriage to Cowser-Griffin, Mr. Griffin was diagnosed with renal cell cancer. He died on May 26, 2012. He had not retired from Dominion. No party had applied for a QDRO or notified the Dominion Plan Administrator of an alternate payee for the Salaried Savings Plan. In October 2012, Mrs. Griffin sent a draft QDRO to Dominion. Dominion's Plan Administrator responded that the proposed domestic relations order (" DRO" ) would not be treated as a QDRO in light of [62 Va.App. 745] Board of Trustees of the Indiana State Council of Plasterers & Cement Masons Pension Fund v. Steffens, Case No. 4:12CV513 JCH, 2012 WL 5207499 (E.D.Mo.2012), a case concerning a domestic relations order entered after the plan participant's death. However, Dominion continued an administrative hold on Mr. Griffin's Salaried Savings Plan benefits pending the outcome of the litigation concerning the proper beneficiary under the Plan.
The circuit court ruled that it had jurisdiction to reinstate the parties' divorce case upon the docket " for such purposes as may be necessary to grant full relief to all parties," citing Code § 20-121.1, and that Code § 20-107.3(K) grants the circuit court continuing authority and jurisdiction " to make any additional orders necessary to effectuate and enforce any order entered pursuant to [equitable distribution]." The circuit court clarified that if it were to enter the QDRO it would not be modifying the final decree's incorporation of the property settlement agreement, " but rather would effectuate and enforce such an order by entry of a QDRO." However, the circuit court denied Mrs. Griffin's request to enter a proposed QDRO, finding that " under controlling federal law, without a preexisting QDRO, Mr. Griffin's retirement benefits in the Dominion Salaried Savings Plan vested entirely in the designated beneficiary and surviving spouse, [Cowser-Griffin], once the plan participant passed away." The circuit court found that under federal case law,
at the time of retirement or preretirement death the former spouse must have perfected a QDRO at the time the benefits became payable, or that in order to effect a postmortem qualification of the domestic relations order (" DRO" ) as a QDRO, there must have been a DRO awarding the interest in the pension plan and substantially complying with ERISA's QDRO specificity requirements at the time the benefits became payable. Alternatively, Ms. Sandra Griffin could have put the plan on notice of her children's interest in the benefits. Ms. Griffin failed to perfect a QDRO prior to Mr. Griffin's passing, and the final decree of divorce and the PSA do not qualify as a QDRO. Further, there is no evidence in the record that any notice of the children's potential claim under the PSA was ever provided to the [62 Va.App. 746] Plan at any time before the plan participant's death. Thus, Defendant's Motion for Entry of the [QDRO] is denied.
Mrs. Griffin timely appealed to this Court.
Mrs. Griffin's assignment of error is that " [t]he trial court erred in ruling that the court could not properly enter a qualified domestic relations order under the circumstances
of the case." " We review the [circuit] court's statutory interpretations and legal conclusions de novo. " Navas v. Navas, 43 Va.App. 484, 487, 599 S.E.2d 479, 480 (2004) (quoting Sink v. Commonwealth, 28 Va.App. 655, 658, 507 S.E.2d 670, 671 (1998)).
The disbursement of Mr. Griffin's Salaried Savings Plan falls under the federal Employee Retirement Income Security Act of 1974 (" ERISA" ), 29 U.S.C. § 1001 et seq., as stated in the Salaried Savings Plan documents and because it is an " employee pension benefit plan" as defined in 29 U.S.C. § 1002(2). An " employee pension benefit plan" or " pension plan" includes a plan maintained by an employer that provides retirement income to employees or deferred income for employees regardless of the method of calculating the benefits under the plan or the method of distributing benefits from the plan. 29 U.S.C. § 1002(2).
The principal goal of ERISA is to provide " a set of standard procedures to guide processing of claims and disbursement of benefits." Egelhoff v. Egelhoff, 532 U.S. 141, 148, 121 S.Ct. 1322, 1328, 149 L.Ed.2d 264 (2001). 29 U.S.C. § 1144(a) provides that the Act " shall supersede any and all State laws insofar as they may now or hereafter relate to any employee benefit plan." The legislative intent behind ERISA was to establish a uniform administrative scheme governing employee benefit plans to prevent the employer from being subject to differing regulatory requirements in differing states. Fort Halifax Packing Co. v. Coyne, 482 U.S. 1, 9, 107 S.Ct. 2211, 2216, 96 L.Ed.2d 1 (1987). The United States Supreme Court has " not hesitated to enforce ERISA's pre-emption [62 Va.App. 747] provision where state law created the prospect that an employer's administrative scheme would be subject to conflicting requirements." Id. at 10, 107 S.Ct. at 2216.
A. 29 U.S.C. § 1055 Does Not Apply to the Salaried Savings Plan
Congress enacted the Retirement Equity Act of 1984 (" REA" ) which " enlarged ERISA's protection of surviving spouses in significant respects." Boggs v. Boggs, 520 U.S. 833, 843, 117 S.Ct. 1754, 1761, 138 L.Ed.2d 45 (1997). The enlarged protections in REA are codified in 29 U.S.C. § 1055. Pursuant to the statutory language, 29 U.S.C. § 1055 applies to,
(A) any defined benefit plan,
(B) any individual account plan which is subject to the funding standards of section 302 [29 USCS § 1082], and
(C) any participant under any other individual account plan  unless —
(i) such plan provides that the participant's non-forfeitable accrued benefit (reduced by any security interest held by the plan by reason of a loan outstanding to such participant) is payable in full, on the death of the participant, to the participant's surviving spouse (or, if there is no surviving spouse or the surviving spouse consents in the manner required under subsection (c)(2), to a designated beneficiary),
[62 Va.App. 748] ii) such participant does not elect the payment of benefits in the form of a life annuity, and
(iii) with respect to such participant, such plan is not a direct or indirect transferee (in a transfer after December 31, 1984) of a plan which is described in subparagraph (A) or (B) or to which this
clause applied with respect to the participant.
29 U.S.C. § 1055(b)(1) (footnotes added). While § 1055 governs most pension plans with surviving spouse benefits, it provides an exception for some individual account plans. Mr. Griffin's estate concedes that the Dominion Salaried Savings Plan is one such plan excepted by the statutory language. Mr. Griffin's estate, however, relies on language from Boggs stating that all pension plans are governed by § 1055, and thus, he argues that despite the statutory exception, the Salaried Savings Plan is nevertheless regulated by § 1055.
Congress' concern for surviving spouses is also evident from the expansive coverage of § 1055, as amended by REA. Section 1055's requirements, as a general matter, apply to all " individual account plans" and " defined benefit plans." § 1055(b)(1). The terms are defined, for § 1055 purposes, so that all pension plans fall within those two categories. See § 1002(35). While some individual account plans escape § 1055's surviving spouse annuity requirements under certain conditions, Congress still protects the interests of the surviving spouse by requiring those plans to pay the spouse the nonforfeitable accrued benefits, reduced by certain security interests, in a lump-sum payment. § 1055(b)(1)(C).
First, we note that the above quoted language from Boggs is dicta and we note that, contrary to the assertion of Mr. Griffin's estate, the Boggs Court's choice of words actually is [62 Va.App. 749] that § 1055 applies " as a general matter ... to all ‘ individual account plans' and ‘ defined benefit plans.’ " Id. (emphasis added). Thus, we do not read Boggs as a judicial revision of the statutory language designed to eliminate exceptions created by Congress. In Boggs, the pension plan at issue in the above quoted analysis was a " qualified joint and survivor annuity mandated by ERISA" in 29 U.S.C. § 1055(a) and (d)(1), id. at 842, 117 S.Ct. at 1761, and not an individual account plan as is the case here. Because the Supreme Court was not faced with deciding whether a particular individual account plan fell within the statutory exception to 29 U.S.C. § 1055, as provided in § 1055(b)(1)(C), the Court's interpretation that § 1055 applies to all individual account plans is dicta and not binding precedent. See Camreta v. Greene, __ U.S. __,
__, 131 S.Ct. 2020, 2045, 179 L.Ed.2d 1118 (2011) (dicta remarks do not establish law or qualify as binding precedent).
The fact that 29 U.S.C. § 1055(b)(1)(C) requires excepted plans to pay a surviving spouse the participant's nonforfeitable accrued benefits in a lump-sum payment does not mean that the other provisions of § 1055 apply to those plans. While § 1055(b)(1)(C) does require excepted plans to pay a surviving spouse the participant's nonforfeitable accrued benefits in a lump-sum payment, this requirement is one of three to be met for an individual account plan to be excepted from § 1055; it would be illogical to conclude that § 1055 applies to an individual account plan excepted by the language of the statute itself.
[62 Va.App. 750] Additionally, the fact that the Salaried Savings Plan requires spousal consent in the same manner as provided in 29 U.S.C. § 1055(c)(2) does not mean that § 1055 applies to the Plan. In fact, the statute itself contemplates that excepted plans may require spousal consent " in the manner required under subsection (c)(2)." 29 U.S.C. § 1055(b)(1)(C)(i). Accordingly, while an ERISA governed plan may require consent in the manner provided in 29 U.S.C. § 1055(c)(2), it may escape § 1055 application. Such is the case here where the Salaried Savings Plan requires spousal consent in
the manner provided in 29 U.S.C. § 1055(c)(2). The Salaried Savings Plan meets § 1055's requirements for excepted plans because (1) the Plan provides that the participant's benefits are payable in full to the surviving spouse upon the participant's death, (2) Mr. Griffin did not elect to receive benefits in the form of a life annuity, and (3) there is no evidence or allegations that the Salaried Savings Plan is a transferee of a previous plan. Moreover, as stated supra, Mr. Griffin's estate concedes that the Salaried Savings Plan is excepted from § 1055 application. Therefore, the Plan is not subject to the regulations that apply to joint and survivor annuities and pre-retirement survivor annuities pursuant to § 1055, nor does the case law interpreting the § 1055 annuity regulations apply.
B. ERISA Allows for Assignment or Alienation of Plan Benefits Pursuant to a QDRO
Turning to Mrs. Griffin's proposed QDRO, we must determine whether it meets the statutory requirements for a QDRO, and if it does, it is not pre-empted. Boggs, 520 U.S. at 848, 117 S.Ct. at 1764. In other words, enforceability of Mrs. Griffin's interest " ultimately depends on whether a state court order is qualified under ERISA." Langston v. Wilson McShane Corp., 828 N.W.2d 109, 116 (Minn.2013).
ERISA generally obligates administrators to manage ERISA plans " in accordance with the documents and instruments governing them." 29 U.S.C. § 1104(a)(1)(D). " At a more specific level, the Act requires covered pension benefit plans to ‘ provide that benefits ... under the plan may not be [62 Va.App. 751] assigned or alienated,’ [29 U.S.C.] § 1056(d)(1), but this bar does not apply to qualified domestic relations orders (QDROs), [29 U.S.C.] § 1056(d)(3)." Kennedy v. Plan Adm'r for DuPont Sav. & Inv. Plan, 555 U.S. 285, 288, 129 S.Ct. 865, 868, 172 L.Ed.2d 662 (2009). " The QDRO provision is an exception not only to ERISA's rule against assignment of plan benefits but also to ERISA's broad preemption of state law." Trs. of the Dirs. Guild v. Tise, 234 F.3d 415, 420 (9th Cir.2000) (citing 29 U.S.C. § 1144(b)(7)). 29 U.S.C. § 1056(d)(3)(A) provides,
Paragraph (1) [stating benefits may not be assigned or alienated] shall apply to the creation, assignment, or recognition of a right to any benefit payable with respect to a participant pursuant to a domestic relations order, except that paragraph (1) shall not apply if the order is determined to be a qualified domestic relations order. Each pension plan shall provide for the payment of benefits in accordance with the applicable requirements of any qualified domestic relations order.
The Dominion Salaried Savings Plan provides under the heading " Death Benefits, Your Beneficiary" :
If you die while employed by Dominion, the entire value of your account is distributed to your beneficiary, including the value of all Company Matching contributions that automatically become vested upon your death.
Federal law requires that, if you are married when you die, your spouse must receive the distribution unless she or he approved your choice of another (or an additional) beneficiary before your death. Your spouse must agree to your choice of that beneficiary by signing the spousal consent portion of a Beneficiary Authorization Form obtained from ACS. ...