University of Dubuque v. Fairchild, 21-0216

Background:

Richard Cowart named his then-wife Sharon as beneficiary on his 1998 TIAA/CREF designation; they divorced five months later and Sharon signed a dissolution stipulation relinquishing claims to Richard’s retirement.
Richard remarried Robilyn in 1998 but did not update the beneficiary form; he died in 2018 and UD/TIAA initially treated Sharon as named beneficiary.
Sharon mailed a written disclaimer to TIAA on July 19, 2018; she later wrote (Sept. 28, 2018) seeking half the account but had earlier attempted to disclaim rights.
UD’s only located formal plan document is a 2009 restated 403(b) Plan (in effect at Richard’s death) that prescribes beneficiary forms, references qualified disclaimers under 26 U.S.C. § 2518, and contains a divorce‑revocation clause that by its terms applies only to divorces on/after the plan’s execution.
The district court found Sharon’s 1998 divorce waiver terminated her beneficiary interest and ordered payment to Robilyn; the court denied Robilyn’s request for attorney fees.
On appeal the court held the 1998 divorce decree could not, by itself under ERISA/ Kennedy, be relied on to defeat Sharon’s beneficiary designation, but affirmed payment to Robilyn because Sharon’s July 2018 written disclaimer was a valid, irrevocable qualified disclaimer under § 2518 (made irrevocable under Iowa law when mailed).

Issues:

Issue	Sharon's Argument	Robilyn's Argument	Held
Whether the 1998 divorce stipulation/decree divested Sharon of beneficiary status under ERISA (plan‑documents rule)	Decree waived Sharon’s rights and thus she lost beneficiary status	Plan documents govern; no pre‑2009 plan shows a revocation provision, so Kennedy’s plan‑documents rule applies	Court: Kennedy applies; the 1998 decree did not automatically divest Sharon under ERISA
Whether the 2009 Plan/SPD or lack of pre‑2009 plan supports Robilyn’s claim	Sharon argued 2009 Plan shouldn’t apply retroactively; SPD cannot override plan	Robilyn argued SPD and plan practice required spousal consent and supported her claim	Court: SPD cannot alter plan terms (CIGNA); no evidence prior plan had revocation clause, so 1998 decree insufficient
Whether Sharon’s July 19, 2018 letter constituted a valid, irrevocable qualified disclaimer under 26 U.S.C. § 2518	Sharon claimed she did not complete required disclaimer formalities and later revoked it	Robilyn argued the July letter met § 2518 elements and was effective	Held: The July letter satisfied § 2518 elements and, under Iowa’s disclaimer statute, became irrevocable on delivery; thus Robilyn is default beneficiary
Whether Robilyn may recover attorney fees under 29 U.S.C. § 1132(g)(1)	Robilyn sought fees as prevailing party under ERISA	UD noted the interpleader nature of the action and district court denied fees	Held: District court did not err; attorney fees denied (no basis under the interpleader procedure here)

Key Cases Cited

Kennedy v. Plan Administrator for DuPont Savings and Investment Plan, 555 U.S. 285 (2009) (establishes the plan‑documents rule: plan instruments govern whether a divorce decree can alter beneficiary rights)
CIGNA Corp. v. Amara, 563 U.S. 421 (2011) (an SPD communicates plan terms but cannot itself modify enforceable plan documents)
Egelhoff v. Egelhoff, 532 U.S. 141 (2001) (ERISA preempts state laws that change designated beneficiary status by operation of state law)
Andochick v. Byrd, 709 F.3d 296 (4th Cir. 2013) (post‑distribution suits against ERISA beneficiaries are not preempted and may be pursued under state law)
Estate of Kensinger v. URL Pharma, Inc., 674 F.3d 131 (3d Cir. 2012) (state breach‑of‑contract claims can be used to recover funds paid pursuant to an ERISA plan)