By: dmc-admin//July 22, 2002//
“Under an ERISA plan, benefits must be paid to a ‘beneficiary’ who is ‘designated by a participant, or by the terms of [the] plan.’ 29 U.S.C. § 1002(8). The plan administrator’s determination, and a court’s interpretation, of the identity of that beneficiary clearly ‘relates to’ ERISA insofar as it ‘governs the payment of benefits, a central matter of plan administration.’ Egelhoff, 532 U.S. at 148. Egelhoff stands for the proposition that a state law cannot invalidate an ERISA plan beneficiary designation by mandating distribution to another person. Similarly to the operation of the Washington statute under consideration in Egelhoff, the application of the legal doctrine of substantial compliance mandates a conclusion as to the identity of the proper recipient of such payments. It is thus very different from state laws which may have an incidental effect on ERISA plans, but which do not mandate certain choices or conclusions. See, e.g., supra note 7. The Ninth Circuit’s reasoning that the state law doctrine of substantial compliance would not affect the administration of the plan, but would merely ‘aid in determining the identity of the proper recipient of the proceeds,’ McMath, 206 F.3d at 829, seems to us a distinction without a difference.”
Affirmed.
Appeal from the United States District Court for the Northern District of Illinois, Lefkow, J., Manion, J.