A Distinction Without a Difference? ERISA Preemption and the Untenable Differential Treatment of Revocation-on-Divorce and Slayer Statutes

Abstract

The Employee Retirement Income Security Act of 1974 (ERISA) was enacted in large part to protect employee benefit plan participants. Yet ERISA’s broad preemption clause may actually thwart this goal in certain cases by imposing unexpected consequences on participants who die before appropriately updating their beneficiary designations. For instance, although many state laws presume divorce to revoke the former spouse’s beneficiary status, the U.S. Supreme Court’s 2001 decision in Egelhoff v. Egelhoff ex rel. Breiner made clear that ERISA preempts such state-level wills doctrines, enabling a former spouse to benefit when the deceased participant likely intended otherwise. The rationale behind this broad preemption provision applies equally to other wills doctrines such as “slayer statutes,” which prevent murderers from benefitting from their crimes. Therefore, it is likely impossible to confine the impact of this pre-emptive effect to the divorce realm. Moreover, in the wake of Kennedy v. Plan Administrator for DuPont Savings & Investment Plan, decided by the U.S. Supreme Court in 2009, the federal common law no longer appears to be a valid solution to this problem of effecting the likely intent of deceased plan participants. Congressional action to amend ERISA is therefore necessary to avoid these inequitable results.