Michael Schwartz “Lessons Learned” from Beneficiary Designation Case for Daily Business Review
Michael Schwartz authored an article published by Daily Business Review on July 5, 2017 outlining the Federal Court for the Middle District of Florida decision in Ruiz v. Publix Super Market, which demonstrated the need for employers to provide precise instructions to its employee-participants to designate beneficiaries under an employer-provided benefits plan. “Employers should find it prudent to establish a single, uniform procedure for participants to follow when designating plan beneficiaries,” Schwartz said. “The employer ought to provide clear and concise instructions to their employee-participants for how to follow this procedure to designate plan beneficiaries. The employer should also train its plan administrative personnel how to communicate this procedure to plan participants so as to avoid costly and unnecessary litigation.”
The case dates back to 2015 when Irialeth Rizo sought to change the beneficiaries of her Publix-sponsored ESOP and 401(k) plans from her nieces and nephew to her significant other, Arlene Ruiz. She allegedly received instructions over the phone that conflicted with Publix policy, which required her to complete and return a Beneficiary Designation Card with her signature and date. Rizo ultimately did not include her signature on the cards, rather including it in an accompanying letter sent the day before her death. Publix viewed the change of beneficiary designation invalid because it did not strictly comply with policy. The Middle District of Florida agreed, upholding the doctrine of substantial compliance in its ruling that Publix properly distributed the benefits to the originally listed beneficiaries.
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