Court Upholds ERISA Compliance in Adjusting Annuity Payments

The 4th U.S. Circuit Court of Appeals has confirmed EIDP, Inc.'s retirement plan administrator's decision to adjust annuity payments for an ex-spouse, aligning with ERISA guidelines and regulatory compliance requirements. The ruling affirms the lower court's decision showing adherence to a Qualified Domestic Relations Order (QDRO) for managing marital property in retirement plans.

David Gasper, post-divorce in 2010, saw his company-sponsored plan classified as marital property. Under the QDRO, he was entitled to lifetime monthly annuity benefits, with his ex-spouse receiving a share during his lifetime. Adjustments, however, were made to offset the joint survivor annuity cost allotted to Gasper. These adjustments sparked Gasper's appeal when his retirement benefits were adjusted, reflecting the legal and regulatory nuances impacting payer and carrier decisions in benefits administration.

In 2023, Gasper contested the denial of these adjusted benefits, claiming it violated ERISA guidelines. Despite his litigation for damages due to delayed document provision, the appellate court upheld the initial rulings, supporting the administrator's discretion under QDRO and statutory requirements. The judgment, penned by Judge Barbara Milano Keenan, stressed that QDRO interpretation falls under state law contracts and emphasized no breach in regulatory compliance. This case underscores the intricacies of regulatory adherence in claims and risk management within the insurance industry.