For Better or Worse- Lack of Spousal Consent Can Cost You

A woman who claimed that a plan distribution form indicating her consent to her late husband’s distribution election was never properly notarized and therefore invalid has the agreement of a federal judge

The husband had elected a split distribution: one half in a lump sum and one half in an annuity without survivor benefits. The husband passed away after having received the lump sum distribution and two annuity payments. The wife then sued over the waiver's validity.

ERISA requires that the distribution waiver form be witnessed by a plan representative or a notary. In this case the notary had stamped the document without the wife present The US District Court threw out the waiver form signed by the woman, finding it had not been properly witnessed by a plan representative or a notary as required by ERISA.

The form did not include a standard declaration that the wife had executed the form in front of the notary. The plan argued that the requirement of a witness was a mere technicality that should not invalidate the wife's signature, but the court disagreed.

While acknowledging that outside of ERISA courts have found flaws in notarizations to be insufficient to defeat the validity of a document, the court noted that those cases "did not involve the ERISA strict requirements leading to the loss of benefits by a surviving spouse."

The case is Alfieri v. Guild Times Pension Plan, 2006 E.D.N.Y. 2006.

Do You Make This Mistake When You Reveal Your Age to the 401k Administrator?

For years, Maria Zdzienicki told her employer, Con Edison, that she was born in 1939. She provided Con Edison with sworn documents, such as immigration papers, confirming this to be true. Years later, when her pension benefits were about to begin, she reportedly told the company that she had actually been born five years earlier, in 1934. She claimed that she was therefore entitled to a larger pension benefit. In support of this claim, she submitted copies of her Polish birth certificate, Polish marriage license, and Polish passport.

The Con Edison pension plan administrator denied her request for additional benefits, citing the reason that there was sufficient evidence in the record to conclude that Maria was born in 1939, irrespective of what the Polish documents indicated.

Maria sued in federal court under ERISA, arguing that the plan administrator's decision was arbitrary and capricious. The parties stipulated that the administrator did not attempt to investigate the authenticity of the Polish documents. Zdzienicki conceded that the plan granted discretionary authority to the administrator to determine eligibility for benefits, decide factual questions, and resolve issues regarding plan administration.

In ruling for the defendants, the federal court found that "the plan administrator's decision to calculate Zdzienicki's pension benefits was not arbitrary and capricious and therefore did not violate ERISA."
The court explained that the administrator's decision was supported by voluminous documentary evidence, including Zdzienicki's sworn statement at the outset of her employment, her United States government issued Certificate of Naturalization, her New York State driver's abstract, her diploma from the Warsaw University of Technology, her 1990 COBRA forms, her employment authorization form and her 1993 medical laboratory reports. Also supporting the decision was the fact that Zdzienicki did not attempt to correct Con Edison's records of her date of birth until April 2003, when her pension payments were about to begin. This was 23 years after she first told the company that she was born on July 30, 1939.

It would not have been unthinkable for the Con Edison administrator to conclude that if Zdzienicki were truly born in 1934, she would have informed the company of that fact in 1990, when it twice sent her forms showing that her pension benefits would be calculated using 1939 as her year of birth, or at least in 1999, when, had Zdzienicki been born in 1934, she would have turned 65 and thus would have been entitled to pension payments at that time. Thus, "a reasonable mind" could view the evidence in the administrative record "as adequate to support the conclusion" that Zdzienicki was born on July 30, 1939.

The cite is Zdzienicki v. Consolidated Edison Co. of New York, 2006 WL 2482668 (S.D.N.Y. Aug. 29, 2006).