Ninth Circuit Awards Pension Plan Survivor Benefits to Registered Domestic Partner

The Ninth Circuit has ruled that a pension plan administrator abused its discretion in denying survivor benefits to the registered domestic partner of a deceased plan participant. The couple had registered as domestic partners under California law in 2004, and the participant retired and began receiving benefits in 2009. In 2014, the couple was married, and the participant died soon thereafter. Pension benefits ceased, and the plan denied the partner’s claim for survivor benefits, even though the partner was now a legal spouse. The partner sued the plan administrator, but the district court ruled in favor of the plan, agreeing with the plan administrator that the federal Defense of Marriage Act (DOMA), which was in effect when the participant retired, prohibited the plan from recognizing the partners as spouses.

On appeal, the Ninth Circuit reversed, concluding that the plan operated under California law, which has long afforded domestic partners the same rights, protections, and benefits as those granted to spouses. Even though the partners were not legally married when the participant retired, state law required benefits to be determined as if the two were spouses. Observing that neither ERISA nor the Code provided binding guidance inconsistent with this interpretation—but declining to address the impact of DOMA (which was good law at the time, despite its later retroactive invalidation)—the court held that the plan administrator should have awarded spousal benefits upon the participant’s death and remanded the case to the district court to determine the payments owed.

EBIA Comment: The plan administrator has filed a petition for rehearing, arguing that the Ninth Circuit’s decision would require the recalculation of fully paid benefits for “every ERISA retirement plan and countless former participants in the country since DOMA became law 23 years ago.” Regardless of the ultimate outcome, the case serves as a good reminder that certain jurisdictions (e.g., California, the District of Columbia, Maine, New Jersey, and others) continue to provide registered domestic partners with essentially the same rights as married couples. Plan sponsors should be aware of their plan’s choice of law provisions and the impact of applicable state law on plan operations. For more information, see EBIA’s Employee Benefits for Domestic Partners at Sections II (“Same-Sex Marriage, Civil Unions, and Domestic Partnerships Under Federal and State Law”) and VIII (“Retirement Benefits”). See also EBIA’s 401(k) Plans manual at Section XII.C (“Permissible Distribution Event: Death”) and EBIA’s Self-Insured Health Plans manual at Section XIV.E.5 (“Domestic Partner Beneficiaries”).

Contributing Editors: EBIA Staff.