S.D. Ohio Notes Split Re How a Beneficiary is Determined Under ERISA

Per Lynch v. Fortis Benefits Ins. Co., Slip Copy, 2007 WL 2331940 (S.D.Ohio Aug 13, 2007) (NO. 1:05CV599):

There is a split among the circuits with respect to the manner in which a beneficiary is determined. Some circuits, finding no explicit answer in the text of ERISA, immediately look to the federal common law for the controlling principles for designating beneficiaries. See, e.g., Guardian Life Ins. Co. of Am. v. Finch, 395 F.3d 238, 240-41 (5th Cir.2004); Hill v. AT & T Corp., 125 F.3d 646, 648 (8th Cir.1997); Estate of Altobelli v. Int'l Bus. Machs. Corp., 77 F.3d 78, 81-82 (4th Cir.1996); Fox Valley & Vicinity Constr. Workers Pension Fund v. Brown, 897 F.2d 275, 280-81 (7th Cir.1990) (en banc).

"The Sixth Circuit takes a different view and holds that ERISA itself supplies the rule of law." Metropolitan Life Ins. Co. v. Pressley, 82 F.3d 126, 130 (6th Cir.1996); see also McMillan v. Parrott, 913 F.2d 310, 311 (6th Cir.1990); Unicare Life & Health Ins. Co. v. Craig, 157 F. App'x 787, 791 (6th Cir.2005). The Sixth Circuit's rule is grounded in the ERISA provision that requires a plan administrator to administer the plan "in accordance with the documents and instruments governing the plan." 29 U.S.C. § 1104(a)(1)(D). See Craig, 157 F. App'x at 791.

"We have consistently held that Section 1104(a)(1)(D) of ERISA establishes 'a clear mandate that plan administrators follow plan documents to determine the designated beneficiary.' " Craig, 157 F. App'x at 791 (quoting Pressley, 82 F.3d at 130); see also Central States, Southeast & Southwest Areas Pension Fund v. Howell, 227 F.3d 672, 678 (6th Cir .2000) ("It is clear that the law of this Circuit requires the ERISA plan administrator to pay out plan proceeds in accordance with the ERISA plan documents."). "A participant is master of his own ERISA plan." McMillan, 913 F.2d at 312. Therefore, under the Sixth Circuit's bright-line rule, the Court must examine the plan documents to determine whether a beneficiary designation has been made in accordance with the plan documents. Howell, 227 F.3d at 678.