Boggs v. Boggs – Retirement Benefits – ERISA
Boggs v. Boggs, 520 U.S. 833, 117 S. Ct. 1754, 138 L. Ed. 2d 45 (1997).
NATURE OF THE CASE: This Supreme Court family law case involved an issue of whether ERISA preempts state law relating to employee retirement benefit plans.
FACTS: Isaac Boggs (H) worked for South Central Bell from 1949 until his retirement in 1985. He and his first wife Dorothy Boggs had three sons. After Dorothy died in 1979 Isaac married Sandra Boggs. Isaac and Sandra remained married until his death in 1989.
Upon retirement Isaac Boggs received a lump sum distribution of $151,600 from his employer Bell which he rolled over into an IRA. H made no withdrawals from that account and it was worth $180,000 when he died. H also received 96 shares of AT&T stock and a monthly retirement income of $1,777.67 from Bell South’s Retirement Program.
A dispute erupted between Sandra and Isaac’s children from his first marriage. The sons claimed a portion of the benefits from their mother’s will as Dorothy bequeathed 1/3 of her estate to H and a lifetime usufruct in the remaining 2/3rds. The sons then obtained ownership of the 2/3rds subject to H’s usufruct. Sandra contested the validity of Dorothy’s 1980 testamentary transfer based on H’s will, which gave Sandra certain property including the family home and a lifetime usufruct in the remainder of his estate with the naked ownership interest being held by the sons. Sandra argued that the sons’ competing claim based on the purported transfer of her community property interest in undistributed pension plan benefits is preempted by ERISA.
The sons filed suit and Sandra filed a complaint in U.S. District Court seeking a declaratory judgment that ERISA preempts Louisiana community property law. The lower court ruled in favor of the sons and found that Dorothy had a valid community property interest in the plan. The court held that giving her property interest to her sons was not an assignment or an alienation and as such did not violate 29 U.S.C. §1056(d)(1).
The trial court held that H had not transferred anything as the property belonged to Dorothy under Louisiana community property law. Sandra Boggs appealed and the Fifth Circuit affirmed. The United States Supreme Court granted cert.
ISSUE: Does the federal ERISA statute supersede state laws relating to employee benefit plans?
RULE OF LAW: Yes. The federal ERISA statute supersedes state laws relating to employee benefit plans.
HOLDING AND DECISION (Kennedy): Our ruling must be consistent with the congressional scheme to assure the security of plan participants and their families in every state. The ERISA act states very clearly that it shall supersede any and all state laws insofar as they relate to any employee benefit plan. Federal law preempts and supersedes state law and requires the surviving spouse annuity to be paid to her as the sole beneficiary.
The statutory object of the qualified joint and survivor annuity provisions was to ensure a stream of income to surviving spouses. This solicitude for the economic security of surviving spouses would be undermined by allowing predeceased spouse’s heirs and legatees to have a community property interest in the survivor’s annuity. Even a plan participant cannot defeat a nonparticipant surviving spouse’s statutory entitlement to an annuity. It would be odd to say the least, if Congress permitted a predeceasing nonparticipant spouse to do so. Community property law has in the past been preempted in order to ensure the implementation of a federal statutory scheme.
DISPOSITION: Reversed.
Boggs v. Boggs, law, case briefs, family law, Supreme Court, ERISA, community property, Louisiana, choice of law, retirement benefits