Can a participant designate a beneficiary merely with a phone call?  You need to look at the plan documents.

But are beneficiary designation forms ERISA “plan documents”? It depends, and it makes a difference.

Here’s the case of Mays-Williams v. Williams,  __ F.3d __ (9th Cir. January 28, 2015) (PDF).

The court addresses an issue of first impression: What documents are “plan documents”?  The case also shows why that is such an important issue to resolve.

FACTS: Asa Williams divorced his wife, Carmen, in 2006. In 2007, 2008 and 2011 Williams “telephonically undesignated” his former wife, and named his son as beneficiary.  Each time, however, Williams failed to return a signed beneficiary designation form.  He died in 2011.

After his death his former wife, Carmen, claimed the benefits of the Xerox ERISA-governed benefits. The plan interpleaded the funds into the court.

TRIAL COURT: Because Williams failed to complete the beneficiary form, his former wife was entitled to the ERISA benefits.

NINTH CIRCUIT REVERSES:

  1. Asa Williams “telephonic undesignations” were valid because “[n]othing in the governing plan documents prevents unmarried participants from designating beneficiaries by phone.” Op. at 13.
  2. The beneficiary designation forms are NOT plan documents because these forms “simply confirm the participant’s attempt to change his designated beneficiary….” Op. at 9-10.
  3. “[W]hile the plan documents require written designations for married participants, they decline to impose any sort of writing requirement on unmarried participants.” Op. at 14 (Emph. in original).
  4. “[O]nly [documents] that provide information as to ‘where [the participant] stands with respect to the plan’, such as a [Summary Plan Description] or trust agreement might, could qualify as governing documents with which a plan administrator must comply in awarding [ERISA] benefits….”  Op. at 9.