Hamilton v. Washington State Plumbing and Pipefitting Industry Pension Plan , 433 F.3d 1091 ( 2006 )

FOR PUBLICATION
UNITED STATES COURT OF APPEALS
FOR THE NINTH CIRCUIT
DAVID HAMILTON; SARAH 
HAMILTON, a minor,
Plaintiffs-Appellees,
v.
WASHINGTON STATE PLUMBING &
PIPEFITTING INDUSTRY PENSION No. 04-35526
PLAN; PLUMBERS & PIPEFITTERS
NATIONAL PENSION FUND; WESTERN
 D.C. No.
CV-03-02438-TSZ
WASHINGTON U.A. SUPPLEMENTAL
PENSION TRUST,
Defendants-Appellants,
MARY HAMILTON,
Defendant-intervenor-
Appellant.

137
138 HAMILTON v. WASHINGTON STATE PLUMBING
LINDA OPPEGAARD, guardian of 
Sarah Hamilton,
Plaintiff,
and
DAVID HAMILTON; SARAH
HAMILTON, a minor,
Plaintiffs-counter-
defendants-Appellees,
v.
No. 04-35828
PLUMBERS & PIPEFITTERS NATIONAL
PENSION FUND,
 D.C. No.
CV-03-02438-TSZ
Defendant-cross-defendant,
MARY HAMILTON,
Defendant-intervenor,
and
WASHINGTON STATE PLUMBING &
PIPEFITTING INDUSTRY PENSION
PLAN, Local Union #32,
Defendant-cross-defendant-
Appellant.

HAMILTON v. WASHINGTON STATE PLUMBING 139
LINDA OPPEGAARD, guardian of 
Sarah Hamilton,
Plaintiff,
and
DAVID HAMILTON; SARAH
HAMILTON, a minor,
Plaintiffs-counter- No. 04-35798
defendants-Appellees,
v.  D.C. No.
CV-03-02438-TSZ
PLUMBERS & PIPEFITTERS NATIONAL OPINION
PENSION FUND,
Defendant-cross-
defendant-Appellant,
and
MARY HAMILTON,
Defendant-intervenor.

Appeal from the United States District Court
for the Western District of Washington
Thomas S. Zilly, District Judge, Presiding
Argued and Submitted
October 17, 2005—Seattle, Washington
Filed January 10, 2006
Before: Richard D. Cudahy,* Thomas G. Nelson, and
M. Margaret McKeown, Circuit Judges.
Opinion by Judge McKeown
*The Honorable Richard D. Cudahy, Senior United States Circuit Judge
for the Seventh Circuit, sitting by designation.
142 HAMILTON v. WASHINGTON STATE PLUMBING
COUNSEL
Ann E. Senter and Richard H. Robblee, Rinehart & Robblee,
Seattle, Washington; Donald A. Cable and Neil A. Cable,
Cable Langenbach Kinerk & Bauer LLP, Seattle, Washington,
for the defendants-appellants.
Nicholas P. Scarpelli, Jr., Carney Badley & Spellman, P.S.,
Seattle, Washington; Jerome C. Scowcroft, Scowcroft Law
Office, Seattle, Washington, for the plaintiffs-appellees.
Jonathan P. Meier, Sirianni Youtz Meier & Spoonemore,
Seattle, Washington, for the defendant-intervenor-appellant.
OPINION
McKEOWN, Circuit Judge:
The alphabet soup world of pension benefits has spawned
a dizzying array of acronyms, like ERISA, QDRO, and
QPSA, and a complex web of interrelated statutory provi-
sions. In a case of first impression, our challenge is to cut
through the dense language to figure out what Congress
meant in terms of surviving spouse benefits under the
Employee Retirement Income Security Act of 1974
(“ERISA”), 88 Stat. 832, as amended, 29 U.S.C. § 1001 et
seq.
HAMILTON v. WASHINGTON STATE PLUMBING 143
In the case before us, two ERISA-governed pension funds,
the Plumbers & Pipefitters National Pension Fund (National
Pension Fund) and the Washington State Plumbing & Pipefit-
ting Industry Pension Plan for Local Union #32 (State Plan)
(collectively the “Plans”),1 and Mary Hamilton, the surviving
spouse of plan participant Michael Hamilton, appeal the dis-
trict court’s summary judgment and award of attorneys’ fees
to Michael’s children from a previous marriage, David and
Sarah Hamilton (the “Children”). After Michael’s pre-
retirement death, Mary and the Children claimed competing
rights to survivor benefits. The district court found that the
marital dissolution order, which required Michael to name the
Children as beneficiaries under the Plans, was a valid Quali-
fied Domestic Relations Order (“QDRO”) under ERISA that
took precedence over Mary’s right to a Qualified Preretire-
ment Survivor Annuity (“QPSA”).
This scenario requires us to address the intersection
between a surviving spouse’s statutorily-guaranteed survivor
annuity, a QPSA, and a marriage dissolution order, a QDRO,
that is silent with respect to surviving spouse rights. Relying
on the plain language of the statute, we hold that the pur-
ported assignment of pension rights did not meet the strict
requirements of a QDRO. Even if the dissolution order is lib-
erally construed as a QDRO, under the statutory language
coupled with a complementary interpretation of the plans, the
surviving spouse benefit must be explicitly assigned to a for-
mer spouse in a QDRO in order to overcome the surviving
spouse’s right to an annuity under ERISA. Consequently,
Mary, the surviving spouse, prevails over the Children in this
1
The Children and Mary Hamilton also assert competing claims to bene-
fits under a third plan, the Supplemental Pension Plan for Washington
State Plumbing and Pipefitting Industry Pension Plan for Local Union #32
(the “Supplemental Plan”). Although the Supplemental Plan was a named
defendant in the underlying suit, it did not appeal the district court’s judg-
ment. The district court noted that the Supplemental Plan “does not take
a position on the merits of this action and agrees to pay the prevailing
party.”
144 HAMILTON v. WASHINGTON STATE PLUMBING
debate over statutory construction, plain language, and plan
language, and we reverse the judgment of the district court.
BACKGROUND
The essential facts are not in dispute. Michael was a partici-
pant in the National Pension Fund, the State Plan and the Sup-
plemental Plan. The Plans are defined benefit pension plans
subject to the provisions of ERISA. Michael and his first wife,
Linda Oppegaard, were divorced in April 1996. A marital dis-
solution order filed with the state court provided that, with
regard to the Plans, Michael “shall name the children of the
marriage, David and Sarah, as the beneficiaries under the pen-
sion in lieu of life insurance which he is presently unable to
obtain, which obligation shall terminate when the youngest
child reaches 18 years of age.” The dissolution order made no
reference to surviving spouse rights nor did it delineate which
pension rights were at issue, the amounts to be paid or when
the payments were to begin.
About two months after the divorce, Michael married Mary
Hamilton. Soon after they were married, Michael named
Mary as the beneficiary for death benefits payable under the
National Pension Fund and State Plan.2 Mary only asserts her
rights to benefits as a result of her status as the “surviving
spouse,” not as the designated beneficiary. Michael died in a
car accident in 2002 at the age of 49. At the time of his death,
he was still married to Mary and both Children were under the
age of 18. He was a fully vested participant in the Plans, had
not yet retired and was not receiving pension benefits.
The Plans provide that if a vested participant dies before
retirement, benefits will be paid to a surviving spouse or, in
the event that such surviving spouse benefits are not payable,
a lump sum death benefit will be paid to another beneficiary
2
The record does not reflect whether Mary Hamilton was the named
beneficiary under the Supplemental Plan.
HAMILTON v. WASHINGTON STATE PLUMBING 145
designated by the plan participant. Once Mary asserted rights
to surviving spouse benefits under the Plans, the Children
asserted competing rights on the ground that the marital disso-
lution order entitled them to benefits. The National Pension
Fund and the State Plan denied the Children’s claims, reason-
ing that Mary was entitled to a surviving spouse benefit under
ERISA. The Supplemental Plan took no position on the merits
of the claims.
In the course of the inevitable litigation over this clash of
rights, the district court granted summary judgment to the
Children and entered a judgment in their favor in an amount
totalling the contributions made to the Plans on Michael’s
behalf. The district court determined that the Plans’ respective
denials of the Children’s claims were arbitrary and capricious
because the dissolution decree was a valid QDRO under
ERISA, and the designation of the Children as “alternate pay-
ees” in the QDRO took precedence over Mary’s right as the
surviving spouse. The court also awarded the Children attor-
neys’ fees, costs, and prejudgment interest pursuant to 29
U.S.C. § 1132(g)(1).
ANALYSIS
I. STATUTORY FRAMEWORK
Congress enacted ERISA to ensure the proper administra-
tion of employee benefit plans, including pension plans, both
during the years of an employee’s active service and after
retirement. See Boggs v. Boggs, 520 U.S. 833, 839 (1997).
The principal object of ERISA is to “protect plan participants
and beneficiaries.” Id. at 845 (citing Shaw v. Delta Air Lines,
Inc., 463 U.S. 85, 90 (1983) (“ERISA is a comprehensive
statute designed to promote the interests of employees and
their beneficiaries in employment benefit plans”)); see also 29
U.S.C. § 1001(b) (stating that the policy of ERISA is to “pro-
tect . . . the interest of participants in employee benefit plans
and their beneficiaries”). To this end, ERISA requires pension
146 HAMILTON v. WASHINGTON STATE PLUMBING
plans to conform to a myriad of reporting, disclosure, partici-
pation, vesting and funding requirements. See 29 U.S.C.
§§ 1021-1031, 1101-1114, 1051-1086.
[1] The Retirement Equity Act of 1984 (“REA”), Pub.L.
98-397, 98 Stat. 1426, amended ERISA in two important
ways with respect to surviving spouses. REA first sought to
“ensure a stream of income” to surviving spouses by requiring
pension plans to provide automatic surviving spouse benefits.
Boggs, 520 U.S. at 843. Section 1055, as amended by REA,
provides that if a vested participant dies before the annuity
start date, leaving a surviving spouse to whom he has been
married for at least one year, “a qualified preretirement survi-
vor annuity [QPSA] shall be provided to the surviving spouse.”3
29 U.S.C. § 1055(a)(2). The QPSA is an annuity for the life
of the surviving spouse that must be at least fifty percent of
the annuity amount which would have been payable during
the joint lives of the participant and spouse. Id. at
§ 1055(e)(2). Provision of the QPSA may be waived by the
participant only if the spouse consents in writing to the desig-
nation of another beneficiary. Id. at § 1055(c)(2).4 Applying
these provisions to the case at hand, it is undisputed that Mary
was Michael’s “surviving spouse” at the time of his death,
and Mary never consented to the designation of another bene-
ficiary.
[2] REA also introduced the QDRO exception, id. at
3
Section 1055(a)(1) states that “in the case of a vested participant who
does not die before the annuity starting date, the accrued benefit payable
to such participant shall be provided in the form of a qualified joint and
survivor annuity” (emphasis added). This provision, known as the “QJSA”
provision, does not apply here because Michael died prior to the annuity
starting date.
4
The survivor’s annuity may be waived without spousal consent if “it
is established to the satisfaction of a plan representative” that “there is no
spouse, because the spouse cannot be located, or because of other such cir-
cumstances as the Secretary of the Treasury may by regulations pre-
scribe.” Id. at § 1055(c)(2)(B).
HAMILTON v. WASHINGTON STATE PLUMBING 147
§ 1056(d), which “elevates a plan participant’s legal obliga-
tions, commonly to a former spouse or children of a previous
marriage, over the participant’s express wishes to provide for
other individuals as designated beneficiaries.” Trustees of the
Directors Guild of America-Producer Pension Benefits Plans
v. Tise, 234 F.3d 415, 425 (9th Cir. 2000). The QDRO is a
subset of “domestic relations orders” that recognizes the right
of an alternate payee to “receive all or a portion of the bene-
fits payable with respect to a participant under the plan.” 29
U.S.C. § 1056(d)(3)(B)(i)(I). If a domestic relations order
qualifies as a QDRO, the designated alternate payee— “any
spouse, former spouse, child, or other dependent of a
participant”—shall be considered “a beneficiary under the
plan.” Id. at §§ 1056(d)(3)(J)-(K). “Each pension plan shall
provide for the payment of benefits in accordance with the
applicable requirements of any qualified domestic relations
order.” Id. at § 1056(d)(3)(A).
[3] In addition, the statute specifically contemplates the
assignment of surviving spouse rights (i.e., a QPSA) to a “for-
mer spouse” in a QDRO:
To the extent provided in any qualified domestic relations
order—
(i) the former spouse of a participant shall be treated
as a surviving spouse of such participant for pur-
poses of section 1055 of this title (and any spouse of
the participant shall not be treated as a spouse of the
participant for such purposes)
Id. at § 1056(d)(3)(F)(i) (emphasis added). In crafting the
QDRO exception, “Congress resolved any uncertainty con-
cerning the authority of state courts to adjudicate marital dis-
solutions and to affect ERISA pension plan benefits.”5 See
5
QDROs, unlike domestic relations orders in general, are exempt both
from ERISA’s anti-alienation provision, 29 U.S.C. § 1056(d)(1) (“Each
pension plan shall provide that benefits provided under the plan may not
be assigned or alienated”), and ERISA’s broad preemption of state law, 29
U.S.C. § 1144(b)(7).
148 HAMILTON v. WASHINGTON STATE PLUMBING
Stewart v. Thorpe Holding Co. Profit Sharing Plan, 207 F.3d
1143, 1149 (9th Cir. 2000).
Together, the surviving spouse and QDRO provisions “are
essential to one of REA’s central purposes, which is to give
enhanced protection to the spouse and dependent children in
the event of divorce or separation, and in the event of death,
the surviving spouse.” Boggs, 520 U.S. at 847. Apart from
these detailed provisions, ERISA does not confer beneficiary
status on nonparticipants by reason of their marital or depen-
dent status. Id.II. QDRO ANALYSIS
Without a doubt, the details required in a QDRO present a
drafting morass for the lawyer. We recognize the concern
expressed by courts and commentators that the failure of
domestic relations lawyers to “navigate the treacherous
shoals” of ERISA may harm potential beneficiaries. Metro-
politan Life Ins. Co. v. Wheaton, 42 F.3d 1080 (7th Cir. 1994)
(noting that “[i]deally, every domestic relations lawyer should
be conversant with ERISA, but it is unrealistic to expect all
of them to be”); see also Daniel N. Janich, When Remarriage
Muddies the Waters, 24 FAMILY ADVOCATE 39 (2000)
(“Unfortunately, failure to include a survivorship provision in
the QDRO often goes undetected until the participant dies or
retires, that is, when the survivor benefits irrevocably vest in
the current spouse and it is too late to do anything about it.”).
Despite these drafting pitfalls, Congress “required that
QDROs be specific and clear” because it was “concerned with
reducing the expense to plan providers and protecting them
from suits for making improper payments.” In re Gendreau,
122 F.3d 815, 817-18 (9th Cir. 1997). The mandated specific-
ity makes sense so that a pension plan is on notice of its exact
obligations to a payee other than a plan participant. In practi-
cal terms, a well crafted QDRO could avoid precisely the
clash of claims presented here.
HAMILTON v. WASHINGTON STATE PLUMBING 149
[4] A domestic relations order6 qualifies as a QDRO only
if it meets the “specificity” requirements set forth in
§ 1056(d)(3)(C): (1) the order must specify the name and
mailing address of the alternate payee and the affected plan
participant, (2) the amount or percentage of the participant’s
benefits to be paid or the means by which that amount will be
determined, (3) the number of payments or time period to
which the order applies, and (4) each plan to which the order
applies. In addition, under § 1056(d)(3)(D), a QDRO must not
(1) require the plan to provide any type of benefit not other-
wise provided, (2) require the plan to provide increased bene-
fits, or (3) require benefits to be paid to an alternate payee
which must be paid to another alternate payee under another
QDRO.7
[5] We require substantial compliance with these require-
ments, Tise, 234 F.3d at 420, and have rejected an unduly nar-
row reading of these requirements. Stewart, 207 F.3d at 1155(recognizing that such a reading may frustrate Congressional
purposes “by making it unreasonably difficult for domestic
relations orders to qualify as QDROs”) (quoting Hawkins v.
Commissioner of Internal Revenue, 86 F.3d 982, 991 (10th
Cir. 1996) (emphasis added)). We have, however, also echoed
the Tenth Circuit’s concerns that an overly expansive inter-
pretation may render the specificity requirements toothless.
Stewart, 207 F.3d at 1155 (rejecting the suggestion that
ERISA’s specificity requirements may be eliminated alto-
6
A “domestic relations order” is defined as any “judgment, decree or
order” concerning “the provision for child support, alimony payments or
marital property rights to a spouse, former spouse, child or other depen-
dent of a participant” that is “made pursuant to a State domestic relations
law (including a community property law).” Id. at § 1056(d)(3)(B)(ii)(I)-
(II).
7
The issue of whether a domestic relations order meets the statutory
requirements of a QDRO, and therefore is enforceable against the pension
plan, is determined in the first instance by the pension plan administrator,
and, if necessary, by a court of competent jurisdiction. See Tise, 234 F.3d
at 421; see also 29 U.S.C. § 1056(d)(3)(H)(I).
150 HAMILTON v. WASHINGTON STATE PLUMBING
gether in certain cases); Hawkins, 86 F.3d at 992 (“Nowhere
. . . has Congress implied that its factual requirements are
optional”). The pivotal question is whether the dissolution
order “clearly contains the information specified in the statute
that a plan administrator would need to make an informed
decision.” Stewart, 207 F.3d at 1154 (internal quotation marks
omitted). Here, the paucity of relevant information in the dis-
solution order compels a negative answer.
Exhibit A to the Decree of Dissolution is a list of property
to be distributed to the husband. The only mention of the chil-
dren and the pension is the cryptic reference with respect to
each pension plan that the husband “shall name the children
of the marriage, David and Sarah, as the beneficiaries under
the pension in lieu of life insurance which he is presently
unable to obtain, which obligation shall terminate when the
youngest child reaches 18 years of age.”
As the Plans pointed out in rejecting the Children’s claim,
the order requires the husband to designate the Children as
beneficiaries but does not require any action by the Plans,
does not assign death benefits to the Children, and does not
specify when payments begin or the amount, calculation, or
form of the payments.8 Nor does the order deal with the issue
of the surviving spouse annuity.
[6] The required details are not hypothetical hurdles. Under
the Plans, before the Children reached maturity, Michael or
his qualified beneficiary was potentially eligible for a variety
of pension benefits, such as a disability pension, an early
retirement pension, death benefits and survivor benefits. The
8
The Plans also point out that the dissolution order does not identify the
Children as “Alternate Payees” under the Plans. This deficiency alone
would not have posed a particular hurdle to finding a valid QDRO. See
Hawkins, 86 F.3d at 990 (explaining that even though the participant’s for-
mer spouse was not “specifically designated” as an alternate payee in the
QDRO, she clearly “come[s] within the statutory definition of an ‘alter-
nate payee’ ”).
HAMILTON v. WASHINGTON STATE PLUMBING 151
dissolution order neither lays out what pension benefits are at
issue nor allocates payment of the benefits.
[7] The district court determined that the references in the
dissolution order met the requirements for a QDRO. On
appeal, the Plans argue that “QDRO or no QDRO,” the statute
mandates payment to the surviving spouse. The dissolution
order did not, in our view, qualify as a QDRO. Nonetheless,
because of the ambiguity of the Plans’ position on appeal—
that is, whether they actually challenge the district court’s
finding—we give the Children the benefit of the doubt and
proceed with the analysis under the statute. Absent a QDRO,
the Children would not even be in a position to parse the stat-
utory provisions.
III. STATUTORY INTERPLAY BETWEEN QDROS AND
SURVIVOR BENEFITS
[8] The Plans and Mary argue that under ERISA, a QDRO
can divest a surviving spouse of her statutorily-guaranteed
right to a QPSA only if the QDRO expressly assigns surviv-
ing spouse rights to a former spouse. See 29 U.S.C.
§1056(d)(3)(F). This is a question of first impression in this
circuit.
“In interpreting the statutes in question, ‘[o]ur task is to
construe what Congress has enacted. We begin, as always,
with the language of the statute.’ ” Navajo Nation v. Dep’t
Health & Human Services, 325 F.3d 1133 (9th Cir. 2003) (en
banc) (quoting Duncan v. William, 533 U.S. 167, 172 (2001)).
When looking to the plain language of a statute, “we do more
than view words or subsections in isolation. We derive mean-
ing from context, and this requires reading the relevant statu-
tory provisions as a whole.” California ex rel. Locklear v.
F.E.R.C., 383 F.3d 1006, 1016 (9th Cir. 2004) (internal quota-
tion marks omitted).
[9] Under ERISA, “a qualified preretirement survivor annu-
ity [QPSA] shall be provided to the surviving spouse,” 29
152 HAMILTON v. WASHINGTON STATE PLUMBING
U.S.C. § 1055(a)(2) (emphasis added), absent one exception
—spousal consent to waiver of the benefit, id. at § 1055(c)(2).
As the Supreme Court observed in Boggs, congressional con-
cern for the “economic security of surviving spouses,” is evi-
dent from the “expansive coverage of § 1055[‘s]”
requirements, which apply to all individual account plans and
defined benefit plans, see 29 U.S.C. § 1055(b)(1), and the
requirement of spousal consent, which prevents “[e]ven a plan
participant [from] defeat[ing] a nonparticipant surviving
spouse’s statutory entitlement to an annuity.” Boggs, 520 U.S.
at 843.
[10] Section 1055 must be read in conjunction with
§ 1056(d)(3)(F), which provides that “[t]o the extent provided
in any qualified domestic relations order,” surviving spouse
rights may be assigned to a “former spouse.” The ordinary
interpretation of the phrase “to the extent provided” means
that any assignment of surviving spouse rights in a QDRO
must be explicit, rather than implicit. In other words, any
effort to alienate surviving spouse rights in advance must be
spelled out in the QDRO. The provision also makes clear that
surviving spouse rights must be assigned to a “former
spouse.” By statutory fiat, a former spouse can be treated as
“the surviving spouse” in this limited circumstance. But the
bottom line is that the survivor spouse annuity is payable only
to the individual qualifying as a “surviving spouse” or “for-
mer spouse.”
The Children argue that § 1056(d)(3)(F) does not exhaus-
tively delineate how a QDRO can assign surviving spouse
rights, but instead exemplifies one particular scenario: where
the “alternate payee” happens to be a “former spouse.” The
Children urge that their QDRO is not governed by the lan-
guage of §1056(d)(3)(F). To accept this argument, we would
have to assume that while Congress intended for there to be
multiple ways to assign surviving spouse rights in a QDRO—
e.g., to children as well as to a former spouse—the legislature
decided to reference explicitly only one of those ways in
HAMILTON v. WASHINGTON STATE PLUMBING 153
§ 1056(d)(3)(F)—the former spouse scenario—and leave us
guessing about the rest—e.g., the children scenario. Such an
interpretation is not only unlikely given the comprehensive
nature of the QDRO provision, but it is also at odds with the
mandatory language and strict spousal consent provisions of
§ 1055. Together these provisions make clear that Congress
intended to tightly circumscribe exceptions to the mandatory
surviving spouse annuity.
[11] Although § 1056(d)(3)(A) requires a pension plan to
“provide for the payment of benefits in accordance with the
applicable requirements of any [QDRO],” this directive does
not change our conclusion. Section 1056(d)(3)(A) cannot be
read in isolation as the Children suggest. A QDRO must gen-
erally be enforced, it is true. But it may intrude on a surviving
spouse’s preretirement annuity only in the specific manner set
forth in § 1056(d)(3)(F). Giving meaning to the plain lan-
guage of the statute, we conclude that Mary cannot be
divested of her right to a QPSA under § 1055 unless the
QDRO explicitly assigned those rights to a former spouse.9
Here, the purported QDRO did not do so.
9
In a similar vein, the Children argue that §1056(d)(3)(F) should be read
as an extension of § 1056(d)(3)(C)’s specificity requirements, applicable
to one particular scenario: where the “alternate payee” happens to be a
“former spouse.” As noted earlier, the “specificity requirements” for a
QDRO are set forth in § 1056(d)(3)(C), which provides that “[a] domestic
relations order meets the requirements of this subparagraph only if such
order clearly specifies . . .” (emphasis added). By contrast, the language
of § 1056(d)(3)(F) already assumes that a valid QDRO exists: “To the
extent provided in any qualified domestic relations order . . .” (emphasis
added). Thus, while § 1056(d)(3)(F) does not technically set forth another
specificity requirement for a potential QDRO, it does require a valid
QDRO to specifically assign surviving spouse rights.
These provisions are best viewed as a series of separate hurdles. The
first hurdle is subsection C’s specificity requirements, which apply no
matter what type of pension right is being assigned in a dissolution order.
But if parties to a dissolution order seek to assign surviving spouse rights,
then the second hurdle— § 1056(d)(3)(F)—comes into play. Ultimately,
the question remains the same: whether Congress intended for the second
hurdle to apply whenever surviving spouse rights were at issue. We con-
clude that Congress did.
154 HAMILTON v. WASHINGTON STATE PLUMBING
Although the Supreme Court has not addressed the precise
issue here, our interpretation follows the logic of Boggs. In
Boggs, the Supreme Court held that ERISA prohibited a non-
participant spouse from making a testamentary transfer of her
interest in undistributed pension plan benefits to her sons.
Boggs, 520 U.S. at 844. The Court explained that “ERISA’s
silence with respect to the right of a nonparticipant spouse to
control pension plan benefits by testamentary transfer pro-
vides powerful support for the conclusion that the right does
not exist.” Id. at 843, 847-48. The Court went on to note that
“ERISA’s solicitude for the economic security of surviving
spouses would be undermined by allowing a predeceasing
spouse’s heirs and legatees to have a community property
interest in the survivor’s annuity.” Id. at 843. To be sure, a
testamentary transfer is not a QDRO. See Alabamis v. Roper,
937 F.2d 1450, 1455 (9th Cir. 1991). In light of the compre-
hensive nature of the QDRO provision, ERISA’s silence as to
the ability of a QDRO to override a surviving spouse’s QPSA
—except as set forth in § 1056(d)(3)(F)—supports the view
that § 1056(d)(3)(F) is the exclusive override method, not
merely illustrative, as urged by the Children.10
Our reading of the statute is also consistent with the inter-
pretation of other circuits. In Dorn v. International Bhd. of
10
The Third Circuit in McGowan v. NJR Service Corporation recently
applied Boggs’s reasoning in a similar fashion to conclude that the QDRO
exception to ERISA’s anti-alienation provision “is to be narrowly con-
strued” and does not permit the alienation of benefits through waiver:
Applying [Boggs’s] reasoning to the case at hand, ERISA’s
silence with respect to the right to waive benefits supports the
conclusion that such a right does not exist. The comprehensive
nature of the QDRO provision suggests that Congress provided
only one option to individuals in McGowan’s position. In other
words, the QDRO provision, which . . . give[s] rise to the strong
implication that the designation of alternate payees under other
circumstances (i.e., through waivers) is not consistent with the
statutory scheme.
423 F.3d 241 (3rd Cir. 2005) at 249-50 (internal quotation marks omitted).
HAMILTON v. WASHINGTON STATE PLUMBING 155
Elec. Workers, 211 F.3d 938, 941 n.5 and 947 (5th Cir. 2000),
the Fifth Circuit concluded that while a QDRO entitled a for-
mer spouse to a portion of her ex-husband’s monthly pension
annuity during his lifetime, she was not entitled to a survi-
vor’s annuity under ERISA because “the domestic order
nowhere designates her as the surviving or ‘qualified’ spouse
for purposes of any survivor benefit.” The Third Circuit
explained in Samaroo v. Samaroo, 193 F.3d 185, 187 n.2 (3rd
Cir. 1999), that the terms of a divorce decree were insufficient
to entitle a participant’s ex-wife to a preretirement surviving
spouse annuity because the decree “was silent on the issue of
survivor’s rights.” We acknowledge that these cases did not
address a conflict between children of a former marriage and
a surviving spouse. Like us, however, these circuits have
interpreted the statute to require an explicit assignment of sur-
viving spouse rights in a QDRO; a general designation of an
alternate payee as a pension beneficiary does not serve to des-
ignate surviving spouse benefits.
It bears noting that our interpretation is consistent with
Department of Labor (DOL) and Internal Revenue Service
(IRS) publications that provide guidance in the drafting of
QDROs.11 The DOL has explained:
A QDRO may provide for treatment of a former
spouse of a participant as the participant’s spouse
with respect to all or a portion of the spousal survi-
vor benefits that must be provided under Federal
law. . . . Only a spouse or former spouse of the par-
ticipant can be treated as a spouse under a QDRO.
A child or other dependent who is an alternate payee
under a QDRO cannot be treated as the spouse of a
participant.
11
The QDRO exception is codified both in the labor code and the tax
code. Because “the two parallel provisions were created by the same legis-
lative act and contain precisely the same language, they are interpreted
identically.” Hawkins, 86 F.3d at 988 n.5; see also I.R.C. § 401(a)(13)(B)
(2005); 29 U.S.C. § 1056(d)(3).
156 HAMILTON v. WASHINGTON STATE PLUMBING
DOL, Appendix D - Drafting a Qualified QDRO, in QDROS:
THE DIVISION OF PENSIONS THROUGH QUALIFIED DOMESTIC RELA-
TIONS ORDERS (Dec. 2005), available at http://www.dol.gov/
ebsa/publications/qdros_appD.html (“DOL Guide”). The IRS
offers an identical interpretation, namely that the QDRO can
name only a spouse or former spouse as a beneficiary of spou-
sal survivor rights. IRS Notice 97-11, 1997-2 I.R.B. 49, 1996
WL 747904 at app., pt. 1, § E (1997) (“IRS Notice”). Both
agencies recommend that the following express language des-
ignating surviving spouse rights be included in a QDRO to
effectuate the assignment of those rights to an alternate payee:
“The Alternate Payee shall be treated as the Participant’s
spouse under the Plan for purposes of §§ 401(a)(11) and 41712
of the Code.” Id. at app., pt. 2, § E; DOL Guide. The agencies
also caution that such an alternate payee must be a “spouse”
and not a “child or other dependant of the Participant.” Id.
Our interpretation does not render the QDRO’s assignment
of benefits to the Children illusory. If Michael had not remar-
ried, or had he and Mary been married for less than a year
prior to his death, the Children would have been entitled to
death benefits under the terms of the Plans. Alternatively, if
Michael had waived provision of the survivor spouse annuity
with Mary’s consent pursuant to § 1055(c)(2), the Children
would have been eligible for death benefits. Perhaps the most
effective way of ensuring the Children’s receipt of benefits in
the event of Michael’s pre-retirement death (if this, in fact,
was the parties’ intention at the time of divorce) would have
been to assign surviving spouse rights to Michael’s former
spouse in a QDRO, and she in turn could have transferred
those benefits to the Children.
[12] In short, designating children in a QDRO as alternate
payees under a pension plan can provide a myriad of potential
benefits to the children, depending on their ages, the date of
12
Sections 401(a)(11) and 417 of the tax code are analogous to the sur-
viving spouse provisions in the labor code, 29 U.S.C. § 1055.
HAMILTON v. WASHINGTON STATE PLUMBING 157
the participant’s disability, retirement, or death, and the par-
ticipant’s marital status. But as to a preretirement surviving
spouse annuity, ERISA does not permit children to be desig-
nated as alternate payees in a QDRO. Only the surviving
spouse (or a former spouse properly designated) is eligible for
those benefits.
The Children cite a number of cases in which courts have
awarded life insurance proceeds to the alternate payee (chil-
dren or former spouse) named in a QDRO over the competing
claims of the participant’s widow, absent an express designa-
tion of surviving spouse rights. See Metropolitan Life Insur-
ance Co. v. Marsh, 119 F.3d 415, 422 (6th Cir. 1997);
Metropolitan Life Ins. Co. v. Wheaton, 42 F.3d 1080, 1085
(7th Cir. 1994); Carland v. Metropolitan Life Ins. Co., 935
F.2d 1114, 1121 (10th Cir. 1991). These cases are inapposite
because life insurance policies are not subject to § 1055’s sur-
viving spouse provisions, see § 1055(b) (“[T]his section shall
apply to . . . any defined benefit plan [and] any individual
account plan . . .”). The widows in these cases each claimed
benefits as a named beneficiary under the life insurance pol-
icy, not as a surviving spouse under § 1055. Thus, the analysis
in these cases does not alter our conclusion.
IV. INTERPRETATION OF THE PLANS
Our interpretation of the effect of ERISA’s requirements
for payment of benefits under a QPSA also tracks the Plans’
provisions and the plan administrators’ interpretations of that
language, which are entitled to deference. See Nord v. Black
& Decker Disability Plan, 356 F.3d 1008, 1010 (9th Cir.
2004) (holding that a plan administrator’s determinations are
reviewed for an abuse of discretion where a plan gives the
administrator discretionary authority to construe the terms of
the plan).13 We must uphold the plan administrators’ decisions
13
The Children do not dispute that the Plans give their respective plan
administrators discretionary authority to interpret plan terms, nor do they
contend that a serious conflict of interest affected the plan administrators’
decisions which would merit de novo review. See Atwood v. Newmont
Gold Co., Inc., 45 F.3d 1317, 1322-23 (9th Cir. 1995).
158 HAMILTON v. WASHINGTON STATE PLUMBING
to deny the Children lump sum death benefits if they are
based upon a reasonable interpretation of the plan’s terms and
made in good faith. McDaniel v. The Chevron Corporation,
203 F.3d 1099, 1113 (9th Cir. 2000). Of course, because the
Plans require conformance with ERISA, this review collapses,
in practical terms, into a de novo review.
Here, the Plans’ provisions are clear that, in the event of a
Participant’s pre-retirement death, if a surviving spouse is
entitled to an annuity then no lump sum death benefits are
payable to the designated beneficiary.14 Section 7.01 of the
National Pension Fund provides:
[A] Lump Sum Death Benefit equal to the contribu-
tions made by his Employers on his behalf shall be
paid to his designated Beneficiary. However, if a
Preretirement Surviving Spouse Pension is payable
under Section 6.03, no Death Benefit will be paid
under this Section, unless the Participant’s surviving
Spouse elects to receive it in accordance with Sec-
tion 6.03(d). In any event, no benefits shall other-
wise be payable under this Section if a Preretirement
Surviving Spouse Pension is payable to the Spouse
of the Participant under Section 6.03.
Similarly, §§ 7.03 and 7.05 of the State Plan provide:
14
Section 7.8 of the Supplemental Plan provides:
Beneficiaries. A Participant may designate a Beneficiary to
receive any amount payable upon the Participant’s death, subject
to the following rules:
(a) Rules applying to all designations
...
(2) For a married Participant the designation of a Benefi-
ciary other than the Participant’s spouse shall require the
spouse’s consent . . .
HAMILTON v. WASHINGTON STATE PLUMBING 159
[I]f a Participant is Vested and dies before retirement
benefits commence . . . and no beneficiary of his is
eligible for benefit payments under Section 7.01 [the
Pre-Retirement Surviving Spouse Annuity] . . . , then
his designated Beneficiary shall receive a lump sum
death benefit. . . .
[A] lump sum death benefit . . . shall be paid as a
result of [participant’s] death if he dies before the
date retirement benefits commence . . . provided,
however, if the Participant is less than 55 years of
age at his death, and if his surviving spouse will
receive a Pre-Retirement Annuity Benefit under the
terms of Section 7.01, then no lump sum death bene-
fit shall be paid under this paragraph as a result of
the death of the Participant.
It is undisputed that Mary Hamilton meets the requirements
for a preretirement surviving spouse annuity. Thus, the plan
administrators’ decisions to deny the Children lump sum
death benefits were based on a reasonable interpretation of the
plan language, and the district court erred in concluding that
the decisions were arbitrary and capricious.
The Children point specifically to Article 6, § 6.05 of the
National Pension Fund plan, which states that “[a]ny rights of
a former Spouse or other alternate payee under a Qualified
Domestic Relations Order, with respect to a Participant’s pen-
sion, shall take precedence over those of any later Spouse or
the Participant under this Article.” The district court also
relied on § 6.05 in determining that the National Pension
Fund, by its own terms, was not obligated to pay Mary where
a QDRO conferred rights on an alternate payee.
The difficulty with this interpretation is that it does not take
into account that the term “Spouse” is a defined term in the
Plan and is distinguished from “Qualified Spouse,” another
term used in Article 6. Section 6.01 defines “Spouse” and
160 HAMILTON v. WASHINGTON STATE PLUMBING
“Qualified Spouse.” Throughout Article 6, the Plan distin-
guishes between use of the terms. For example, § 6.01(a) pro-
vides that, in general, a pension will be paid as a “50%
Husband and Wife Pension” unless “the Participant and
Spouse elect otherwise” or “the Spouse is not a Qualified
Spouse.” (emphasis added.)
Section 6.05 cannot be read to trump the rights of a “Quali-
fied Spouse” as it expressly employs the term “Spouse.” Nor
can it be read to mean that if the Children are deemed alter-
nate payees, thus allowing them to defeat the rights of a later,
un-Qualified “Spouse,” that their rights take precedence over
a Qualified Spouse’s entitlement to a preretirement surviving
spouse annuity. Section 6.03, the QPSA section, speaks only
to the rights of a “Qualified Spouse.” Because Mary was mar-
ried to Michael “throughout the twelve months” before “the
date of death,” she is deemed a “Qualified Spouse,” and the
designation of the Children as alternate payees would not
trump her rights.
The National Pension Fund points out that § 6.05 cannot be
read in isolation, but must be read in conjunction with § 7.01,
which states that no lump sum death benefits will be payable
“if a Preretirement Surviving Spouse Pension is payable,” and
§ 6.01(d), which states that “[a] former spouse is a ‘Qualified
Spouse’ if . . . the former Spouse is required to be treated as
a Spouse or Surviving Spouse under a Qualified Domestic
Relations Order.” The Fund contends that this reading is con-
sistent with § 1056(d)(3)(F) of ERISA, which requires a
QPSA to be paid to the surviving spouse unless a QDRO
expressly assigns surviving spouse rights to a “former spouse.”15
15
The Fund provides substantial guidance with respect to QDRO draft-
ing and coverage. Its brochure provides the following detailed information
with respect to preretirement spouse benefits:
The parties should note that if the Alternate Payee is named as
the Surviving Spouse for the Participant’s entire benefit, any sub-
sequent spouse of the Participant will receive no benefits upon
HAMILTON v. WASHINGTON STATE PLUMBING 161
Not only do we determine this interpretation to be reasonable,
but in this case, it is the only plan interpretation consistent
with ERISA’s requirements.
[13] We conclude that a surviving spouse benefit must be
explicitly assigned to a former spouse in a QDRO in order to
overcome the surviving spouse’s right to a QPSA under
ERISA. The plan administrators’ decisions to deny the Chil-
dren benefits were based on reasonable interpretations of the
Plans’ terms, and the district court erred in granting summary
judgment to the Children. We reverse the award of summary
judgment, attorneys’ fees,16 costs, and prejudgment interest to
the Children and remand this case to the district court for pro-
ceedings consistent with this opinion.
REVERSED and REMANDED.
the Participant’s death. The parties should also note that if the
Alternate Payee is not designated as a Surviving Spouse for at
least some portion of the Participant’s benefit, nothing will be
payable to the Alternate Payee after the Participant’s death. For
example, if the QDRO does not provide that the Alternate Payee
is to be the Participant’s surviving spouse for the Preretirement
Surviving Spouse Pension, and if the Participant dies before the
Alternate Payee has begun receiving a benefit, no benefits will be
paid under the QDRO.
The advice is unambiguous. (emphasis added.)
16
Under 29 U.S.C. § 1132(g), a court may, in its discretion, award attor-
neys’ fees and costs “to either party;” however, attorneys’ fees and costs
under § 1132(g) are ordinarily recovered by the prevailing party. See
Honolulu Joint Apprenticeship and Training Committee of United Associ-
ation, 332 F.3d 1234, 1239 (9th Cir. 2003).