William Foster worked for PPG Industries, Inc. from 1988 to 1999
and participated in its employee savings plan, a 401(k) pension plan. The plan
required each participant and beneficiary to keep the Plan Administrator advised
of his correct address.
Foster and his wife, Patricia, resided together in Tulsa, Oklahoma
from 1993 until their divorce in 2004. He had received plan-related documents,
including a Summary Plan Description, instructing him to make sure the current
address on file is correct at all times, especially upon divorce, moving or
termination.
His divorce became final in July 2004, but he never advised his
old company that he had moved out of the martial residence or that his mailing
address had changed. In 2005, documents were mailed to the address on the file
that described changes in the way plan participants would access their savings
plan accounts. Among other things, the documents explained that a User ID
created by the participant would replace the participant's Social Security
number for ID purposes.
Patricia Foster received these documents, created an ID, requested
a temporary password, changed the permanent address on the account to her P.O.
Box and made a withdrawal of $4,000 from the account. Over the next several
months, Patricia withdrew all of the available funds totaling over $42,000.
William Foster sued his former employer, demanding it pay back the
money withdrawn by his ex-wife. Seems like an open and shut case, right? Wrong.
The court ruled that the provisions in the plan documents made it clear that
"any wrongful payment of the Plaintiff's benefits in this instance (was)
due only to Plaintiff's failure to notify the Plan of his change of address
coupled with the conduct of the Plaintiff's ex-wife."
LESSON TO LEARN:
Make sure you CHANGE the beneficiary form after life
events and update your address. It will help avoid problems
such as the one described above.
This
is why every three years we request that clients update their beneficiary
forms for accounts through our offices. You have no idea how many times
we meet with people and their beneficiary forms on life insurance policies or
401k plans at work have ex-wives, brothers or sisters who have since passed
away, children that have been disowned years ago, etc.
Please
take a few moments and pass this email along to friends, relatives, coworkers
that have either gotten married, divorced, widowed, etc.
