Exchange of similar pension annuity contracts qualifies under s. 1035 where annuitant sought diversification of holdings

Article Abstract:

The IRS has in recent revenue rulings tried to make it easier for holders of life insurance and annuity contracts from financially troubled insurance companies to make tax-exempt exchanges of these contracts. A serially funded tax-free Section 1035 exchange of a financially troubled insurance company's contract for a new contract is possible after Revenue Ruling 92-43. The Service has also held that IRC 401(g) restrictions on the transferability of annuity contracts are not violated by the exchange of annuities since the identity of the issuer, not the annuity interest, would be the only change.

Management, Tax exemption, Tax exemptions

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Divorce decree waiving former spouses' rights to ERISA-plan life insurance benefits not a QDRO

Article Abstract:

A US district court in Michigan ruled in Metropolitan Life insurance Co. v. Barlow that an ex-spouse's waiver of rights under her ex-husband's qualified life insurance plan did not constitute a qualified domestic relations order and was not exempt from Employee Retirement Income Security Act preemption. Met Life had taken the position that the ex-wife was still the beneficiary because the employee had never changed his beneficiary designation. The court found the benefits to be payable to the employee's daughter because the waiver was effective under federal common law.

United States, Taxation, Beneficiaries

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Divorce decree not a QDRO where it requires plan distribution to be made be made before earliest time distribution is permitted under the plan

Article Abstract:

A federal court held in Dickerson v Dickerson that a final decree of divorce regarding a participant in the Southern Electrical Retirement Fund did not constitute a qualified domestic relations order (QDRO) and that therefore the fund could not be legally forced to pay pension benefits to the ex-wife. According to ERISA Section 206(d), a divorce decree which calls for pension benefit payments before the earliest retirement age possible under that law is not a QDRO. ERISA's purpose would be contravened if courts allowed pension fund withdrawals long before retirement.

Cases

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