Summary
The Seventh Circuit held that under Wisconsin’s Uniform Power of Attorney for Finances and Property Act, an agent must have an express, specific grant of authority to waive a principal’s right to a survivor annuity under a retirement plan, as required by Wis. Stat. § 244.41(1)(f); a general grant of authority or a power to change beneficiaries does not satisfy ERISA’s spousal consent requirements under 29 U.S.C. § 1055(c). The court also affirmed that state-law negligence claims against a non-fiduciary recordkeeper were preempted by ERISA, and denied certification of a state-law question to the Wisconsin Supreme Court.
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Questions Presented
- Whether the 2019 spousal waiver of survivor annuity benefits complied with Wisconsin's power of attorney statute, requiring an express grant of authority under Wis. Stat. § 244.41(1)(f), or whether a general grant under § 244.51(2)(i) sufficed.
- Whether plaintiffs' motion to certify a question to the Wisconsin Supreme Court should have been granted.
- Whether plaintiffs' claims for breach of fiduciary duty and negligence were properly dismissed.
Holdings
- Under Wisconsin law, an agent under a power of attorney must have an express grant of authority to waive the principal's right to be a beneficiary of a joint and survivor annuity, including a survivor benefit under a retirement plan. Wis. Stat. § 244.41(1)(f). Valerie's power of attorney did not grant Davies the express authority to waive her survivor annuity benefits; therefore, the 2019 spousal waiver was invalid and plaintiffs cannot recover benefits under the plans.
- The motion to certify is denied because the proposed question misstated the issue and certification is not appropriate for case-specific, fact-dependent determinations.
- The fiduciary duty claim fails because defendants acted in accordance with the law and plan documents; the negligence claim against TIAA is preempted by ERISA because it concerns plan administration.
Key quotations
“We conclude that Section 244.41(1)(f) applies here, requiring an express and specific grant under a power of attorney for an agent to effect a spousal waiver of survivor annuity benefits under a retirement plan. Valerie's power of attorney did not contain an express grant of power to her agent Davies for such an action. The 2019 spousal waiver was therefore invalid, and plaintiffs’ claim for benefits due under the plans fails.” (at 14)
“ERISA preemption necessarily requires courts to make case-specific determinations as to when a state statute or claim impermissibly interferes with ERISA and the uniform administration of ERISA-governed plans.” (at 24)
“We also elect not to try to reframe the issue and certify a different question to the state court. “[Flact specific, particularized decisions that lack broad, general significance are not suitable for certification to a state’s highest court.”” (at 21)
Factual background
Edward Lyon participated in two ERISA-qualified retirement plans administered by the University of Chicago, with default benefit as a 50% joint and survivor annuity. In 1998, he designated his wife Valerie and his trust as beneficiaries with Valerie's consent. In 2014, Valerie executed a power of attorney appointing her son-in-law Davies, granting general authority but not explicitly to waive survivor annuity benefits. In 2019, Edward sought to change beneficiaries to grandchildren's trusts, with Davies signing the spousal waiver on Valerie's behalf. TIAA rejected the form as deficient. Edward and later Valerie died. Plaintiffs, as trustees and children, claimed benefits under the 2019 form, but the University denied the claim, finding the power of attorney insufficient under Wis. Stat. § 244.41(1)(f).
Procedural history
Plaintiffs sued the University of Chicago, its retirement plans, and TIAA under ERISA for benefits, alleging the 2019 beneficiary designation form with spousal waiver was valid. The University denied the claim, finding the power of attorney lacked express authority under Wisconsin law. The district court granted defendants' summary judgment motions, and plaintiffs appealed.