939 F. Supp. 2d 944
S.D. Iowa2013Background
- ERISA-governed DPSG employee benefits plan at issue; Sun Life interpleader deposited $183,376.58 due to competing claims to Daniel Wasko’s life-insurance proceeds.
- Policy defines basic life ($40,000) and optional life ($138,000) with a total of $178,000; optional life designated Bonnie as primary beneficiary per enrollment changes.
- November 19, 2008, Wasko attempted to change beneficiary during DPSG’s enrollment period; communication occurred with Hewitt Associates; no signed enrollment card is in the record.
- Hewitt/plan administrator processed changes via telephone and on-line methods during a 2008 electronic enrollment, with no signed document required by the plan at that time.
- Bonnie was named as primary beneficiary for the optional life coverage; the basic life designation remained ambiguous due to the lack of explicit correction in the confirmation notice.
- Court must determine the proper beneficiary under ERISA and the appropriate standard of review and procedure for resolving conflicting claims under the plan documents.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| ERISA standard of review for Sun Life’s decision | Children argue de novo review; plan documents require strict compliance | Bonnie argues Sun Life’s discretionary authority supports de novo review only when exercised | De novo review applied; Sun Life did not exercise discretion in this case |
| Proper beneficiary of optional life coverage | Children contend lack of written change invalidates designation against Bonnie | Bonnie relies on substantial compliance and telephone-change protocol | Bonnie is the primary beneficiary for the optional life coverage under substantial compliance |
| Effect of basic life coverage beneficiary designation | Children maintain basic life beneficiaries were not changed | Sun Life's actions purported to change only optional life | Basic life beneficiaries remained the children |
| Effect of on-line/telephone enrollment protocol on validity of designation | Strict writing/signature requirements must be met | Substantial compliance via verbal change and confirmation suffices under ERISA doctrine | Substantial compliance applicable; telephone-change for optional life upheld; basic life unchanged |
| Role of interpleader posture in resolving competing claims | Not directly addressed in decision | Interpleader enables court resolution when plan administrator records inconclusive | Interpleader posture used to frame de novo determination of beneficiaries |
Key Cases Cited
- Kennedy v. Plan Administrator for DuPont Savings and Investment Plan, 555 U.S. 285 (2009) (plan documents control ERISA-beneficiary changes; divorce decrees do not alter plan terms without proper change)
- Matschiner v. Hartford Life and Acc. Ins. Co., 622 F.3d 885 (8th Cir.2010) (plan documents control; divorce decree does not override beneficiary designation in ERISA group policy)
- Davis v. Combes, 294 F.3d 931 (7th Cir.2002) (substantial compliance doctrine under ERISA framework when strict compliance lacking)
- Phoenix Mutual Life Ins. Co. v. Adams, 30 F.3d 554 (4th Cir.1994) (substantial compliance doctrine—intent and practical steps to effect change)
- Alliant Techsystems, Inc. v. Marks, 465 F.3d 864 (8th Cir.2006) (ERISA beneficiary-change procedures and standard of review discussion)
- Trustees of Electricians’ Salary Deferral Plan v. Wright, 688 F.3d 922 (8th Cir.2012) (de novo review when administrator did not exercise discretion)