ESTATE OF Thomas Angelo ALTOBELLI, Plaintiff-Appellee, v. INTERNATIONAL BUSINESS MACHINES CORPORATION, Defendant-Appellant, and The Prudential Insurance Company of America, Defendant, and Helen V. Dietsch, formerly known as Helen V. Altobelli, Third Party Defendant.
No. 94-1592.
United States Court of Appeals, Fourth Circuit.
Argued Oct. 31, 1995. Decided Feb. 28, 1996.
77 F.3d 78
Applying our holding here, we conclude the district court erroneously delegated its authority to set the amount and timing of Miller‘s fine and restitution payments to the Bureau of Prisons and/or the probation officer, without retaining ultimate authority over such decisions. Therefore, the portion of Miller‘s sentence relating to the fine and restitution must be vacated.
V.
In conclusion, we affirm the district court‘s refusal to reduce Miller‘s offense level for acceptance of responsibility, see 3E1.1., but vacate Miller‘s sentence with respect to the six-level enhancement under USSG § 2B5.1(b)(2) and the district court‘s delegation of the determination of the amount and timing of Miller‘s restitution and fine payments to the Bureau of Prisons and/or the probation officer. On both these last issues, we remand the case for resentencing.
AFFIRMED IN PART, VACATED IN PART, AND REMANDED FOR RESENTENCING
WIDENER, Circuit Judge, concurring and dissenting:
I concur in all of the opinion of the majority except Part III.
As to part III, I do not agree with its implicit conclusion as clearly erroneous the finding of the district court that the counterfeit notes were not so obviously counterfeit that they were unlikely to be accepted even if subjected to only minimal scrutiny. As to that conclusion, I respectfully dissent. I would affirm.
ARGUED: John Mark Vine, Covington & Burling, Washington, D.C., for Appellant. Alan Barry Sternstein, Shulman, Rogers, Gandal, Pordy & Ecker, P.A., Rockville, Maryland, for Appellee. ON BRIEF: Jeffrey G. Huvelle, Michael R. Bergmann, Covington & Burling, Washington, D.C., for Appellant.
Before WILKINSON, Chief Judge, and WIDENER and ERVIN, Circuit Judges.
Affirmed by published opinion. Judge ERVIN wrote the opinion, in which Judge WIDENER joined. Chief Judge WILKINSON wrote a dissenting opinion.
OPINION
ERVIN, Circuit Judge:
I.
From October 13, 1969, until his death on June 14, 1993, Thomas Altobelli worked for IBM and participated in two IBM-sponsored employee pension benefit plans. Altobelli did not designate a beneficiary under either plan, but designated his ex-wife, Ms. Helen Dietsch, as the beneficiary of his IBM Group Life Insurance Plan. The pension plans pro-
Altobelli and Dietsch divorced on December 27, 1985. They incorporated into the divorce decree a Voluntary Separation and Property Settlement Agreement, which provided that Dietsch surrendered any rights in Altobelli‘s IBM plans:
“All of the following property is hereafter the sole and exclusive property of the Husband, and the Wife hereby waives and transfers to the Husband any interest that she may have in the property:
*
*
*
*
*
*
(g) Husband‘s IBM pension and other deferred compensation plans, if any.”
Altobelli likewise surrendered any rights he had in Dietsch‘s IBM plans:
“All of the following property is hereafter the sole and exclusive property of the Wife, and the Husband hereby waives and transfers to the Wife any interest that she may have in the property:
*
*
*
*
(g) Wife‘s IBM pension and other deferred compensation plans, if any.”
Both parties signed the agreement and their signatures were notarized.
Altobelli did not designate a new beneficiary under either the pension plans or the life insurance plan. After he died, IBM notified his estate‘s representative that it intended to distribute the pension-plan proceeds to Dietsch, despite the separation agreement, because she still was the default beneficiary under the plans’ terms. The estate responded by bringing this action for a Declaratory Judgment, claiming that Dietsch had waived her interest in both the life insurance proceeds and the pension-plan proceeds. Dietsch intervened as a defendant, but contested only the estate‘s claim to the life insurance proceeds. Agreeing that the facts were undisputed, the parties moved for summary judgment.
The district court determined that Dietsch was entitled to the life insurance proceeds, but that she had waived her interest in the pension-plan proceeds. It awarded the pension-plan proceeds to the estate. The estate elected not to appeal the disposition of the insurance proceeds, and Dietsch does not contest the finding of waiver regarding the pension-plan proceeds. But IBM timely appealed, arguing that it must administer the pension plans only according to their terms, without regard to the separation agreement.
II.
Summary judgment is proper if “there is no genuine issue as to any material fact.” E.g., Celotex Corp. v. Catrett, 477 U.S. 317, 322, 106 S.Ct. 2548, 2552, 91 L.Ed.2d 265 (1986) (quoting
III.
The issue before this court is whether a divorced spouse, who was the designated beneficiary under her ex-husband‘s ERISA plan, effectively waived her benefits via a marital settlement agreement that was incorporated into a divorce decree. ERISA does not address this topic directly, so federal courts may resolve it by developing federal common law. See Phoenix Mut. Life Ins. Co. v. Adams, 30 F.3d 554, 562 (4th Cir. 1994).
IBM presents two arguments to support its position that the waiver should be ineffective. First, it notes that one of ERISA‘s purposes is to facilitate “uniform, uncomplicated administration” of pension plans. Krishna v. Colgate Palmolive Co., 7 F.3d 11, 16 (2d Cir.1993). ERISA expressly requires that the plan be administered “in accordance with the documents and instruments governing the plan.”
Several other circuits have addressed the issue of waiver by a beneficiary. On facts very similar to this case, the Seventh Circuit decided that a nonparticipant beneficiary can waive her benefits through specific language in a divorce settlement. Fox Valley & Vicinity Constr. Workers Pension Fund v. Brown, 897 F.2d 275, 280-81 (7th Cir.) (en banc), cert. denied, 498 U.S. 820, 111 S.Ct. 67, 112 L.Ed.2d 41 (1990). The anti-alienation clause, the court determined, is a spendthrift device intended to ensure that employees’ accrued benefits are available for retirement: “These provisions focus on the assignment or alienation of benefits by a participant, not the waiver of a right to payment of benefits made by a designated beneficiary.” Id. at 279.
The Eighth Circuit did not address the anti-alienation clause, but held that an ex-spouse can waive pension benefits in a divorce settlement if the waiver specifically refers to and modifies the beneficiary interest. Lyman Lumber Co. v. Hill, 877 F.2d 692, 693-94 (8th Cir.1989). The Tenth Circuit agreed, holding that the beneficiary designation on file only controls absent a divorce decree dictating otherwise. Metropolitan Life Ins. Co. v. Hanslip, 939 F.2d 904, 907 (10th Cir.1991).
Two circuits disagree. The Sixth Circuit, like the Eighth and Tenth Circuits, did not address the anti-alienation clause, but held that a divorce settlement cannot effectively waive pension plan benefits because the plan administrator is to consider only the designation on file. McMillan v. Parrott, 913 F.2d 310, 311-12 (6th Cir.1990). To look at other documents, it believed, would be unnecessarily burdensome. Id.; accord Krishna v. Colgate Palmolive Co., 7 F.3d 11, 16 (2d Cir. 1993) (“It would be counterproductive to compel the Policy administrator to look beyond those designations into varying state laws regarding wills, trusts and estates, or domestic relations to determine the proper beneficiaries of Policy distributions.“).
We agree with the Seventh Circuit that the anti-alienation clause does not apply to a beneficiary‘s waiver. As the Supreme Court has noted, the purpose of the clause is “to safeguard a stream of income for pensioners (and their dependents . . .).” Guidry v. Sheet Metal Workers Nat. Pension Fund, 493 U.S. 365, 376, 110 S.Ct. 680, 687, 107 L.Ed.2d 782 (1990). To bar a waiver in favor of the pensioner himself would not advance that purpose.
We also agree that giving effect to a waiver contained in a domestic relations order does not burden plan administrators in a manner violative of ERISA. ERISA was designed to simplify plan administration as much as possible, but it still requires administrators to consider divorce decrees to determine whether they are Qualified Domestic Relations Orders,* which are enforceable.
In this case, each party clearly intended to relinquish all interests in the pension plans of the other. Congress‘s provision for QDROs reveals that, in some situations, it deems the intent of the parties sufficiently important to override the policy of simplified administration. Because enforcement of a divorce agreement‘s specific waiver of ERISA pension-plan benefits would require no marginal
IV.
Dietsch specifically waived, in her marital settlement agreement, any interest she had in her husband‘s pension plans. Because we hold that her waiver is effective, we affirm the district court‘s order awarding the pension benefits to Altobelli‘s estate.
AFFIRMED.
WILKINSON, Chief Judge, dissenting:
The majority decides this case on grounds of federal common law when it need look no further than the terms of the statute. As we have explained, “resort to federal common law generally is inappropriate when its application would conflict with the statutory provisions of ERISA.” Singer v. Black & Decker Corp., 964 F.2d 1449, 1452 (4th Cir.1992). Here, the equities of the majority‘s disposition seem tempting, but ERISA‘s provisions compel a contrary outcome. Fearing the long term consequences of replacing rules of Congress with our own, I respectfully dissent.
ERISA requires that plan administrators perform their obligations “in accordance with the documents and instruments governing the plan.”
IBM‘s pension plans allow participants to designate or change a beneficiary: “Such designation or change of designation shall be in writing in a form satisfactory to the Plan Administrator and shall be submitted to the Company‘s Payroll Department and shall be effective upon receipt by that Department.” Following Altobelli‘s divorce from Dietsch, however, he did not specify a new beneficiary under his pension plans, nor did he remove Dietsch as the beneficiary under his life insurance plan. Thus, according to the “documents and instruments governing the plan,”
Sound reasons support the statutory rule of assigning benefits in accordance with plan documents. Heeding “the federal rule favoring beneficiary designations filed with a plan administrator” promotes the “strong interest in uniform, uncomplicated administration of ERISA plans.” Krishna v. Colgate Palmolive Co., 7 F.3d 11, 16 (2d Cir.1993); see also Fox Valley & Vicinity Construction Workers Pension Fund v. Brown, 897 F.2d 275, 283 (7th Cir.) (en banc) (Easterbrook, J., dissenting), cert. denied, 498 U.S. 820, 111 S.Ct. 67, 112 L.Ed.2d 41 (1990). “[R]eliance on the face of written plan documents” also furthers another of ERISA‘s central goals, that of “enabling beneficiaries [and employees] to learn their rights and obligations at any time.” Curtiss-Wright Corp. v. Schoonejongen, 514 U.S. 73, 115 S.Ct. 1223, 1230, 131 L.Ed.2d 94 (1995). Strict adherence to
Because the majority ignores the beneficiary designation on file with the IBM plans, its approach compromises the principles underlying
These concerns are not alleviated by construing the majority‘s ruling to apply only to beneficiary waivers in divorce decrees. Interpreting those decrees will cause problems for plan administrators. For instance, waiver provisions are often sweeping in their terms, leaving their precise effect on plan benefits unclear. See Equitable Life Assurance Soc‘y v. Stitzel, 299 Pa.Super. 199, 445 A.2d 523 (1982) (waiver of “any and all claims . . . of whatsoever kind or nature” found not to waive claim to beneficiary interest in life insurance plan). Even when facing waiver terms that reference the affected plans, plan administrators will have to assess whether the waiver is executed with sufficient specificity to trump the beneficiary designation in the plan documents. Courts have reached contradictory conclusions in such situations. Compare Lyman Lumber Co. v. Hill, 877 F.2d 692 (8th Cir.1989) (term stating that husband “shall have as his own, free of any interest of [his wife], his interest in the profit-sharing plan of his employer” held not to waive wife‘s beneficiary interest in plan), with Fox Valley, 897 F.2d at 275 (term stating that the parties “waive any interest or claim in and to any retirement, pension, profit-sharing and/or annuity plans resulting from the employment of the other party” held to waive wife‘s beneficiary interest in pension plan). Forcing plan trustees to make such determinations will only complicate plan administration and will leave all parties unsure of their rights and obligations. The better rule is the one dictated by the statute—to honor the designations on file with the plan documents.
The majority contends that examining the enforceability of waiver provisions in divorce decrees will not unduly compromise plan administration because plan trustees already must review divorce decrees to determine whether they constitute Qualified Domestic Relations Orders (“QDROs“).*
Robert A. HALEY, Plaintiff-Appellant, v. The PAUL REVERE LIFE INSURANCE COMPANY, Defendant-Appellee.
No. 95-1701.
United States Court of Appeals, Fourth Circuit.
Argued Nov. 1, 1995. Decided March 4, 1996.