Friday, June 26, 2015

ERISA provisions do not apply to government retirement plans insofar as its prohibition against “assignment and alienation” of benefits is concerned


ERISA provisions do not apply to government retirement plans insofar as its prohibition against “assignment and alienation” of benefits is concerned
2015 NY Slip Op 04949, Appellate Division, First Department

The husband [Son] and his former spouse [Daughter-in-Law] stipulated in a settlement, incorporated by reference, but not merged, into the judgment of divorce, whereby Daughter-in-Law waived her rights to receive payments as the designated beneficiary of her former mother-in-law's New York City Employees' Retirement System [NYCERS] pension plan.

Supreme Court granted Son’s motion to, among other things, direct Daughter-in-Law“to disgorge payments she received as the beneficiary of Son’s mother’s NYCERS pension plan. Daughter-in-Law appealed but the Appellate Division unanimously affirmed the lower court’s ruling.

The Appellate Division explained that Daughter-in-Law’s reliance on her argument that the waiver violated the Federal Employee Retirement Income Security Act's (ERISA) anti-alienation provision* was misplaced as 29 USC § 1003[b][1] provides that “The provisions of this subchapter shall not apply to any employee benefit plan if ,,, (1) such plan is a governmental plan” as defined in 42 USC §1002(32).** 

As NYCERS is a government plan of a political subdivision of a State, the provisions of ERISA cited by Daughter-in-Law in support of her claim did not apply. Thus, said the Appellate Division, Supreme Court “correctly applied standard principles of contract interpretation to the stipulation, as it [was] a settlement agreement in a divorce action.”

The provision in question, titled "Retirement Funds," said the court, evinced an intent to waive the parties' rights to each other's retirement funds. Further, noted the Appellate Division, the clause in which Daughter-in-Lawwaived her right to such benefits included her waiver of "any and all pension funds set up during the marriage in [Daughter-in-Law’s] name by . . . a member of [Son’s] family." This language, said the court, evinced a related intent by Daughter-in-Law to waive her rights to Son's relatives' retirement funds, including her rights to her former mother-in-law's NYCERS pension benefits.

* 29 USC § 1056[d][1] provides that “Each pension plan shall provide that benefits provided under the plan may not be assigned or alienated.”

** 42 USC §1002, Subdivision 32, provides that the term “governmental plan” means a plan established or maintained for its employees “by the Government of the United States, by the government of any State or political subdivision thereof, or by any agency or instrumentality of any of the foregoing.”

The decision is posted on the Internet at:

Handbooks focusing on State and Municipal Public Personnel Law continue to be available for purchase via the links provided below:

The Discipline Book at http://thedisciplinebook.blogspot.com/

Challenging Adverse Personnel Decisions at http://nypplarchives.blogspot.com

The Disability Benefits E-book: at http://section207.blogspot.com/

Layoff, Preferred Lists at http://nylayoff.blogspot.com/

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