The plan documents do not always resolve an ERISA dispute
Many of the life insurance beneficiary disputes I evaluate involve coverage obtained through an employer. Generally, such coverage is governed by ERISA. Courts typically find that ERISA disputes can be resolved by evaluating the controlling plan documents. But the plan documents sometimes do not supply sufficient guidance to resolve a dispute.
For example, in I.B.E.W, Pacific Coast Pension Funds v. Lee, an ERISA administrator asked a federal judge to resolve a dispute between two beneficiaries claiming to be entitled to pension survivor benefits. It is important to note that pension survivor benefits are typically treated differently than life insurance benefits under ERISA, with most pension plans requiring that the surviving spouse receive the benefits unless the spouse formally waives such benefits.
The particular plan at issue provided that the spouse was to receive the benefits, absent a waiver. The plan participant specifically designated his purported wife, Lois, to receive his benefits. However, another woman, Cleta, came forward to claim that she was actually the true spouse because they had been married and never actually divorced. The court determined it could not resolve the dispute simply by looking at the plan documents. Instead, it looked to Tennessee law and decided that, upon the facts of the case, that Cleta was still the legally recognized spouse and entitled to the survivor benefits.
This case shows that while courts try to enforce ERISA plan provisions strictly, it is sometimes necessary to look beyond the documents, and even beyond federal law, to determine the proper beneficiary.