Woman's same-sex wife entitled to survivor benefits under ERISA: Court

Citing the U.S. Supreme Court's partial strike-down of the Defense of Marriage Act in June, a federal judge ruled Monday that a deceased Chicago woman's same-sex wife is entitled to survivor benefits based on her state of residence.

Chicago residents Sarah Ellyn Farley and Jennifer Jean Tobits were legally married in Canada in February 2006. Upon her death in 2010, Ms. Farley's employer —Philadelphia-based law firm Cozen O'Connor — was required under the Employee Retirement Income Security Act to transfer the value of her accounts within the company's profit sharing plan to her designated beneficiary.

Ms. Tobits and Ms. Farley's parents both submitted beneficiary claims for her retirement funds. Unable to reconcile the competing claims on its own, Cozen petitioned the U.S. District Court for the Eastern District of Pennsylvania as an interpleader to settle the dispute.

In light of the U.S. Supreme Court's June 26 decision in United States v. Edith Schlain Windsor — in which the court voted to overturn provisions of the Defense of Marriage Act that had prohibited federal recognition of same-sex spouses — District Court Judge C. Darnell Jones II ruled that Ms. Tobits is Ms. Farley's lawful beneficiary under ERISA.

“Prior to the Court's decision in Windsor, under the plain language of ERISA, the U.S Tax Code, and the (retirement plan) at issue in this case, qualified retirement plans were under no obligation to provide benefits to same-sex spouses,” Judge Jones wrote in his decision. “Post-Windsor, where a state recognizes a party as a 'surviving Spouse,' the federal government must do the same with respect to ERISA benefits — at least pursuant to the express language of the ERISA-qualified Plan at issue here.”

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Illinois law prohibits the state from issuing marriage licenses to same-sex couples but does allow the state to recognize valid marriage licenses issued to same-sex couples in other jurisdictions, including Canada.

“There can be no doubt that Illinois, the couple's place of domicile, would consider Ms. Tobits Ms. Farley's 'surviving Spouse' — indeed it already has made that specific finding under state law,” Judge Jones wrote, adding that although Cozen's profit sharing plan contains a choice-of-law provision that defaults to Pennsylvania state laws — which outlaws any recognition of same-sex marriage, regardless of where it was performed — those laws only apply to the extent that they are not pre-empted by ERISA.

“That this Plan belongs to a company headquartered in Pennsylvania matters not. The issue here regards the definition of 'spouse' as supplied by ERISA — a federal regulation,” Judge Jones wrote. “For the purposes of determining the definition of 'spouse,' if Courts were required to look at the state in which the policy was drafted, this could permit Plan administrators and drafters to forum shop among those jurisdictions with state DOMA statutes, in an effort to avoid providing benefits to same-sex couples with otherwise valid marriages.”