By Jane Meacham
An appellate court sided with a plan administrator’s decision that a deceased plan participant’s stepsons are not entitled to his pension benefits, a ruling that may set the direction for similar plan interpretations under ERISA law.
In the case, Herring v. Campbell , Case 11-40953 (Aug. 7, 2012), John Wayne Hunter, a retiree of Marathon Oil Co. who participated in the company’s pension plan, died in 2005 without designating a beneficiary for his plan proceeds after the death of his wife the year before. His two stepsons, whom he had helped raise with his wife but had never legally adopted, filed suit about two years after Hunter’s death to challenge the distribution of his retirement benefits, totaling about $300,000, to his six siblings.
The Marathon Oil plan administrator, Eileen Campbell, considered and rejected the possibility that Hunter’s stepsons, Stephen and Michael Herring, might be defined as Hunter’s “children” and therefore entitled to his benefits, based on the Marathon Oil plan’s priorities for distribution after a participant’s death.
Citing their close relationship with Hunter, the fact that Hunter left his estate to them and the fact that he had referred to them as his “beloved sons” in his will, the Herrings suggested to Marathon Oil and its plan administrator that they were entitled to Hunter’s retirement benefits under Texas probate law’s doctrine of “equitable adoption,” also known as “adoption by estoppel.” A district court ruling denied the Marathon Oil plan administrator’s motion for a summary judgment, concluding that she “abused her discretion by failing to consider the Herrings’ claim of adoption by estoppel.” The plan administrator appealed that decision.
Noting that Marathon Oil’s retirement plan gives the plan administrator “discretionary authority to determine the eligibility for benefits or construe the terms of the plan,” the judges of the 5th U.S. Circuit Court of Appeals reviewed her decision and found it legally correct.
For the full story, go to Thompson’s HR Compliance eXpert and this link: