United States: How To Avoid Costly Beneficiary Designation Litigation – Helpful Hints For All Benefit Plans

When administering an employee benefits plan, it is critically important to provide clear and specific instructions as to how a participant can designate a beneficiary. A recent federal district court opinion in Florida demonstrates the potential pitfalls that plan administrators may face with respect to disputes over beneficiary status and provides guidance as to how administrators may avoid costly disputes.

That case, Ruiz v. Publix Super Markets, Inc. centered around the beneficiary designations made by the now-deceased Iraleth Rizo, a long-time employee of the Publix supermarket chain.

During her employment, Ms. Rizo participated in the company's employee stock ownership plan (ESOP) and 401(k) plan. Both plans' summary plan descriptions (SPD) provided very specific instructions as to how a participant designates a beneficiary:

It is important to remember to change your beneficiary designation when the situation calls for it. . . . If you wish to change your beneficiary(ies), please obtain a Beneficiary Designation Card from your work location's Publix Communication Center and complete, sign and submit it to the Retirement Department, Publix Corporate Office, Lakeland, Florida. Your change of beneficiary designation is not valid under the Plan until the Retirement Department receives and  processes the properly completed Beneficiary Designation Card.

The SPD also provided these instructions:

Remember that a Beneficiary Designation Card is a legal document. It should not contain mark outs, erasures or correction fluid.  It should be typed or printed in ink, and you must sign and date the card.  Your beneficiary designation is not valid under the Plan until the Retirement Department receives and process the properly completed Beneficiary Designation Card.

In October 2008, Ms. Rizo properly named her niece and nephew as her beneficiaries for both the ESOP and the 401(k) Plan. By 2011, however, Ms. Rizo had been diagnosed with cancer and no longer worked for the company.  On January 15 of that year,  she called the employer and asked about how she could update her beneficiary designations.  The company's representative instructed her that because she was not an active employee, she could write a letter to update her beneficiary designation.  The representative further directed Ms. Rizo that in the letter she must state her name, her Social Security number, the name(s) of her new beneficiary(ies), and their Social Security numbers.  Alternatively, Ms. Rizo was told that if she could obtain them, she could submit new completed Beneficiary Designation Cards.

Following these oral instructions, Ms. Rizo submitted a dated and signed letter including all of the required information and naming her good friend, Arlene Ruiz, as her sole beneficiary. However, she also submitted new Beneficiary Designation Cards.  But, instead of  dating and signing the cards, she simply wrote "As stated in letter."  Unfortunately, Ms. Rizo died the day after the letter and cards were mailed to Publix.

The Plans paid both death benefits to Ms. Rizo's niece and nephew, in accord with the original 2008 designations. When the friend, Ms. Ruiz filed a claim for the death benefits, the Plans denied the claim because properly completed Beneficiary Designation Cards had not been filed naming her as the sole beneficiary.  The denial referenced the SPDs' specific language about the requirements of how to make a proper beneficiary designation, including the requirement that the card be signed by the participant.  Ms. Ruiz sued the Plan, claiming that the letter identifying her as the beneficiary was sufficient to entitle her to the death benefits.

In a decision that is a boon to plan administrators, the court rejected Ms. Ruiz's claim, and concluded that the niece and nephew were the correct beneficiaries. In ruling against Ms. Ruiz, the court based its decision on a 2009 United States  Supreme Court case, Kennedy v. Plan Administrator for DuPont Savings and Investment Plan. In that case, as part of an executed divorce settlement, a plan participant's former spouse agreed to give up her claim to death benefits.  However, the participant never updated his beneficiary designation.  Accordingly, when he died several years later, the plan paid death benefits to the ex-wife, not to his estate.  In finding in favor of the plan, the Supreme Court instructed that one of the purposes of The Employee Retirement Income Security Act of 1974 (ERISA),  with respect to a written plan document is to inform employees of their rights and obligations under the plan.  When there is a beneficiary dispute, the plan's written terms must be followed, to save the plan and its sponsor from costly litigation, avoid double liability, eliminate the need to examine and evaluate extrinsic documents to discern an employee's intent, and to make sure that benefits are paid quickly.

Using the Supreme Court opinion as a guide, the recent Ruiz opinion thus concluded that it does not matter if a participant "substantially complies" with designation procedures.  Instead, a designation will not be changed unless the plan's specific requirements are precisely followed.

The Publix Plans dodged a bullet with this decision. The case may have been less clear-cut if Ms. Rizo had not included the incomplete Beneficiary Designation Cards along with her letter.  Since the letter indeed complied with all of the Publix representative's directions, it certainly would have been a closer call.

But this risk could have been eliminated entirely, if: (a) the SPDs included the letter procedure for former employees; or (b) the representative simply repeated the SPDs' instructions as to completing the Beneficiary Designation Cards, and not offered the letter procedure.

To avoid costly litigation, employers should review the beneficiary designation language in their plan documents, SPDs, online discussions, and any other employee communications about their plans. As this case highlights, having specific and consistent directions on how to change a beneficiary designation is helpful.  More importantly, it is critical that those who administer the plan follow the plan's written terms.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

To print this article, all you need is to be registered on Mondaq.com.

Click to Login as an existing user or Register so you can print this article.

Similar Articles
Relevancy Powered by MondaqAI
In association with
Related Topics
Similar Articles
Relevancy Powered by MondaqAI
Related Articles
Related Video
Up-coming Events Search
Font Size:
Mondaq on Twitter
Mondaq Free Registration
Gain access to Mondaq global archive of over 375,000 articles covering 200 countries with a personalised News Alert and automatic login on this device.
Mondaq News Alert (some suggested topics and region)
Select Topics
Registration (please scroll down to set your data preferences)

Mondaq Ltd requires you to register and provide information that personally identifies you, including your content preferences, for three primary purposes (full details of Mondaq’s use of your personal data can be found in our Privacy and Cookies Notice):

  • To allow you to personalize the Mondaq websites you are visiting to show content ("Content") relevant to your interests.
  • To enable features such as password reminder, news alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our content providers ("Contributors") who contribute Content for free for your use.

Mondaq hopes that our registered users will support us in maintaining our free to view business model by consenting to our use of your personal data as described below.

Mondaq has a "free to view" business model. Our services are paid for by Contributors in exchange for Mondaq providing them with access to information about who accesses their content. Once personal data is transferred to our Contributors they become a data controller of this personal data. They use it to measure the response that their articles are receiving, as a form of market research. They may also use it to provide Mondaq users with information about their products and services.

Details of each Contributor to which your personal data will be transferred is clearly stated within the Content that you access. For full details of how this Contributor will use your personal data, you should review the Contributor’s own Privacy Notice.

Please indicate your preference below:

Yes, I am happy to support Mondaq in maintaining its free to view business model by agreeing to allow Mondaq to share my personal data with Contributors whose Content I access
No, I do not want Mondaq to share my personal data with Contributors

Also please let us know whether you are happy to receive communications promoting products and services offered by Mondaq:

Yes, I am happy to received promotional communications from Mondaq
No, please do not send me promotional communications from Mondaq
Terms & Conditions

Mondaq.com (the Website) is owned and managed by Mondaq Ltd (Mondaq). Mondaq grants you a non-exclusive, revocable licence to access the Website and associated services, such as the Mondaq News Alerts (Services), subject to and in consideration of your compliance with the following terms and conditions of use (Terms). Your use of the Website and/or Services constitutes your agreement to the Terms. Mondaq may terminate your use of the Website and Services if you are in breach of these Terms or if Mondaq decides to terminate the licence granted hereunder for any reason whatsoever.

Use of www.mondaq.com

To Use Mondaq.com you must be: eighteen (18) years old or over; legally capable of entering into binding contracts; and not in any way prohibited by the applicable law to enter into these Terms in the jurisdiction which you are currently located.

You may use the Website as an unregistered user, however, you are required to register as a user if you wish to read the full text of the Content or to receive the Services.

You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these Terms or with the prior written consent of Mondaq. You may not use electronic or other means to extract details or information from the Content. Nor shall you extract information about users or Contributors in order to offer them any services or products.

In your use of the Website and/or Services you shall: comply with all applicable laws, regulations, directives and legislations which apply to your Use of the Website and/or Services in whatever country you are physically located including without limitation any and all consumer law, export control laws and regulations; provide to us true, correct and accurate information and promptly inform us in the event that any information that you have provided to us changes or becomes inaccurate; notify Mondaq immediately of any circumstances where you have reason to believe that any Intellectual Property Rights or any other rights of any third party may have been infringed; co-operate with reasonable security or other checks or requests for information made by Mondaq from time to time; and at all times be fully liable for the breach of any of these Terms by a third party using your login details to access the Website and/or Services

however, you shall not: do anything likely to impair, interfere with or damage or cause harm or distress to any persons, or the network; do anything that will infringe any Intellectual Property Rights or other rights of Mondaq or any third party; or use the Website, Services and/or Content otherwise than in accordance with these Terms; use any trade marks or service marks of Mondaq or the Contributors, or do anything which may be seen to take unfair advantage of the reputation and goodwill of Mondaq or the Contributors, or the Website, Services and/or Content.

Mondaq reserves the right, in its sole discretion, to take any action that it deems necessary and appropriate in the event it considers that there is a breach or threatened breach of the Terms.

Mondaq’s Rights and Obligations

Unless otherwise expressly set out to the contrary, nothing in these Terms shall serve to transfer from Mondaq to you, any Intellectual Property Rights owned by and/or licensed to Mondaq and all rights, title and interest in and to such Intellectual Property Rights will remain exclusively with Mondaq and/or its licensors.

Mondaq shall use its reasonable endeavours to make the Website and Services available to you at all times, but we cannot guarantee an uninterrupted and fault free service.

Mondaq reserves the right to make changes to the services and/or the Website or part thereof, from time to time, and we may add, remove, modify and/or vary any elements of features and functionalities of the Website or the services.

Mondaq also reserves the right from time to time to monitor your Use of the Website and/or services.


The Content is general information only. It is not intended to constitute legal advice or seek to be the complete and comprehensive statement of the law, nor is it intended to address your specific requirements or provide advice on which reliance should be placed. Mondaq and/or its Contributors and other suppliers make no representations about the suitability of the information contained in the Content for any purpose. All Content provided "as is" without warranty of any kind. Mondaq and/or its Contributors and other suppliers hereby exclude and disclaim all representations, warranties or guarantees with regard to the Content, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. To the maximum extent permitted by law, Mondaq expressly excludes all representations, warranties, obligations, and liabilities arising out of or in connection with all Content. In no event shall Mondaq and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use of the Content or performance of Mondaq’s Services.


Mondaq may alter or amend these Terms by amending them on the Website. By continuing to Use the Services and/or the Website after such amendment, you will be deemed to have accepted any amendment to these Terms.

These Terms shall be governed by and construed in accordance with the laws of England and Wales and you irrevocably submit to the exclusive jurisdiction of the courts of England and Wales to settle any dispute which may arise out of or in connection with these Terms. If you live outside the United Kingdom, English law shall apply only to the extent that English law shall not deprive you of any legal protection accorded in accordance with the law of the place where you are habitually resident ("Local Law"). In the event English law deprives you of any legal protection which is accorded to you under Local Law, then these terms shall be governed by Local Law and any dispute or claim arising out of or in connection with these Terms shall be subject to the non-exclusive jurisdiction of the courts where you are habitually resident.

You may print and keep a copy of these Terms, which form the entire agreement between you and Mondaq and supersede any other communications or advertising in respect of the Service and/or the Website.

No delay in exercising or non-exercise by you and/or Mondaq of any of its rights under or in connection with these Terms shall operate as a waiver or release of each of your or Mondaq’s right. Rather, any such waiver or release must be specifically granted in writing signed by the party granting it.

If any part of these Terms is held unenforceable, that part shall be enforced to the maximum extent permissible so as to give effect to the intent of the parties, and the Terms shall continue in full force and effect.

Mondaq shall not incur any liability to you on account of any loss or damage resulting from any delay or failure to perform all or any part of these Terms if such delay or failure is caused, in whole or in part, by events, occurrences, or causes beyond the control of Mondaq. Such events, occurrences or causes will include, without limitation, acts of God, strikes, lockouts, server and network failure, riots, acts of war, earthquakes, fire and explosions.

By clicking Register you state you have read and agree to our Terms and Conditions