Qualified Domestic Relations Order is
Invalid if Not Filed with Plan

The U.S. Supreme Court will consider a ruling by the U.S. Court of Appeals for the Fifth Circuit. The Fifth Circuit overturned a lower court's ruling and found that if a qualified domestic relations order is not filed with a plan, it is invalid.

In Kennedy v. Plan Administrator for DuPont Savings and Investment Plan, Liv Kennedy was designated as the sole beneficiary of William Kennedy's pension and retirement savings plans. As part of the couple's divorce settlement, Liv Kennedy and her ex-husband signed a qualified domestic relations order (QDRO), but never filed it with William Kennedy's pension and retirement savings plan. In the QDRO, Liv Kennedy gave up her rights to receive any benefits from her ex-husband's pension and retirement savings plan.

When William Kennedy died in 2001, the plan paid out his benefits to his ex-wife because she was still designated as his beneficiary. William Kennedy's estate then argued that because a QDRO had been issued by a court, his benefits should revert to the estate and not go to Liv Kennedy, who had given up her rights to the benefits when she signed the QDRO.

The court found that because the QDRO had not been filed with the plan, it was invalid and that the plan was correct in paying William Kennedy's benefit to Liv Kennedy.

The Supreme Court will only address the question of whether a QDRO is the only way in which an individual may waive his or her right to a benefit from a pension or retirement savings plan.

Read the Fifth Circuit's decision in Kennedy v. Plan Administrator for DuPont Savings and Investment Plan.