|Boggs v. Boggs (96-79), 520 U.S. 833 (1997).|
[ Breyer ]
[ Kennedy ]
NOTICE: This opinion is subject to formal revision before publication in the preliminary print of the United States Reports. Readers are requested to notify the Reporter of Decisions, Supreme Court of the United States, Washington, D.C. 20543, of any typographical or other formal errors, in order that corrections may be made before the preliminary print goes to press.
SUPREME COURT OF THE UNITED STATES
SANDRA JEAN DALE BOGGS, PETITIONER v. THOMAS
F. BOGGS, HARRY M. BOGGS and DAVID B. BOGGS
on writ of certiorari to the united states court of appeals for the fifth circuit
We consider whether the Employee Retirement Income Security Act of 1974 (ERISA), 88 Stat. 832, as amended, 29 U.S.C. § 1001 et seq., pre-empts a state law allowing a nonparticipant spouse to transfer by testamentary instrument an interest in undistributed pension plan benefits. Given the pervasive significance of pension plans in the national economy, the congressional mandate for their uniform and comprehensive regulation, and the fundamental importance of community property law in defining the marital partnership in a number of States, the question is of undoubted importance. We hold that ERISA pre-empts the state law.
Isaac Boggs worked for South Central Bell from 1949 until his retirement in 1985. Isaac and Dorothy, his first wife, were married when he began working for the company, and they remained husband and wife until Dorothy's death in 1979. They had three sons. Within a year of Dorothy's death, Isaac married Sandra, and they remained married until his death in 1989.
Upon retirement, Isaac received various benefits from his employer's retirement plans. One was a lump sum distribution from the Bell System Savings Plan for Salaried Employees (Savings Plan) of $151,628.94, which he rolled over into an Individual Retirement Account (IRA). He made no withdrawals and the account was worth $180,778.05 when he died. He also received 96 shares of AT&T stock from the Bell South Employee Stock Ownership Plan (ESOP). In addition, Isaac enjoyed a monthly annuity payment during his retirement of $1,777.67 from the Bell South Service Retirement Program.
The instant dispute over ownership of the benefits is between Sandra (the surviving wife) and the sons of the first marriage. The sons' claim to a portion of the benefits is based on Dorothy's will. Dorothy bequeathed to Isaac one third of her estate, and a lifetime usufruct in the remaining two thirds. A lifetime usufruct is the rough equivalent of a common law life estate. See La. Civ. Code Ann., Art. 535 (West 1980). She bequeathed to her sons the naked ownership in the remaining two thirds, subject to Isaac's usufruct. All agree that, absent pre-emption, Louisiana law controls and that under it Dorothy's will would dispose of her community property interest in Isaac's undistributed pension plan benefits. A Louisiana state court, in a 1980 order entitled "Judgment of Possession," ascribed to Dorothy's estate a community property interest in Isaac's Savings Plan account valued at the time at $21,194.29.
Sandra contests the validity of Dorothy's 1980 testamentary transfer, basing her claim to those benefits on her interest under Isaac's will and 29 U.S.C. § 1055. Isaac bequeathed to Sandra outright certain real property including the family home. His will also gave Sandra a lifetime usufruct in the remainder of his estate, with the naked ownership interest being held by the sons. Sandra argues that the sons' competing claim, since it is based on Dorothy's 1980 purported testamentary transfer of her community property interest in undistributed pension plan benefits, is pre-empted by ERISA. The Bell South Service Retirement Program monthly annuity is now paid to Sandra as the surviving spouse.
After Isaac's death, two of the sons filed an action in state court requesting the appointment of an expert to compute the percentage of the retirement benefits they would be entitled to as a result of Dorothy's attempted testamentary transfer. They further sought a judgment awarding them a portion of: the IRA; the ESOP shares of AT&T stock; the monthly annuity payments received by Isaac during his retirement; and Sandra's survivor annuity payments, both received and payable.
In response, Sandra Boggs filed a complaint in the United States District Court for the Eastern District of Louisiana, seeking a declaratory judgment that ERISA pre-empts the application of Louisiana's community property and succession laws to the extent they recognize the sons' claim to an interest in the disputed retirement benefits. The District Court granted summary judgment against Sandra Boggs. 849 F. Supp. 462 (1994). It found that, under Louisiana community property law, Dorothy had an ownership interest in her husband's pension plan benefits built up during their marriage. The creation of this interest, the court explained, does not violate 29 U.S.C. § 1056(d)(1), which prohibits pension plan benefits from being "assigned" or "alienated," since Congress did not intend to alter traditional familial and support obligations. In the court's view, there was no assignment or alienation because Dorothy's rights in the benefits were acquired by operation of community property law and not by transfer from Isaac. Turning to Dorothy's testamentary transfer, the court found it effective because "[ERISA] does not display any particular interest in preserving maximum benefits to any particular beneficiary." 849 F. Supp., at 465.
A divided panel of the Fifth Circuit affirmed. 82 F. 3d 90 (1996). The court stressed that Louisiana law affects only what a plan participant may do with his or her benefits after they are received and not the relationship between the pension plan administrator and the plan beneficiary. Id., at 96. For the reasons given by the District Court, it found ERISA's pension plan anti alienation provision, §1056(d)(1), inapplicable to Louisiana's creation of Dorothy Boggs' community property interest in the pension plan benefits. It concluded that the transfer of the interest from Dorothy to her sons was not a prohibited assignment or alienation, as this transfer was "two steps removed from the disbursement of benefits." Id., at 97.
Six members of the Court of Appeals dissented from the failure to grant rehearing en banc. 89 F. 3d 1169 (1996). In their view, a testamentary transfer of an interest in undistributed retirement benefits frustrates ERISA's goals of securing national uniformity in pension plan administration and of ensuring that retirees, and their dependents, are the actual recipients of retirement income. They believed that Congress' creation of the qualified domestic relations order (QDRO) mechanism in §1056(d)(3), whose requirements were not met by the 1980 judgment of possession, further supported their position. (A QDRO is a limited exception to the pension plan anti alienation provision and allows courts to recognize a nonparticipant spouse's community property interest in pension plans under specific circumstances.) The reasoning and holding of the Fifth Circuit's decision is in substantial conflict with the decision of the Court of Appeals for the Ninth Circuit in Ablamis v. Roper, 937 F. 2d 1450 (1991), which held that ERISA pre-empts a testamentary transfer by a nonparticipant spouse of her community property interest in undistributed pension plan benefits. The division between the Circuits is significant, for the Fifth Circuit has jurisdiction over the community property States of Louisiana and Texas, while the Ninth Circuit includes the community property States of Arizona, California, Idaho, Nevada, and Washington. Having granted certiorari to resolve the issue, 519 U. S. ___ (1996), we now reverse.
ERISA pre-emption questions are recurrent, two other cases on the subject having come before the Court in the current Term alone, see California Division of Labor Standards Enforcement v. Dillingham Construction, 519 U. S. ___ (1996); De Buono v. NYSA-ILA Medical and Clinical Services Fund, ante, p. 1. In large part the number of ERISA pre-emption cases reflects the comprehensive nature of the statute, the centrality of pension and welfare plans in the national economy, and their importance to the financial security of the Nation's work force. ERISA is designed to ensure the proper administration of pension and welfare plans, both during the years of the employee's active service and in his or her retirement years.
This case lies at the intersection of ERISA pension law and state community property law. None can dispute the central role community property laws play in the nine community property States. It is more than a property regime. It is a commitment to the equality of husband and wife and reflects the real partnership inherent in the marital relationship. State community property laws, many of ancient lineage, "must have continued to exist through such lengths of time because of their manifold excellences and are not lightly to be abrogated or tossed aside." 1 W. de Funiak, Principles of Community Property 11 (1943). The community property regime in Louisiana dates from 1808 when the territorial legislature of Orleans drafted a civil code which adopted Spanish principles of community property. Id., at 85-89. Louisiana's community property laws, and the community property regimes enacted in other States, implement policies and values lying within the traditional domain of the States. These considerations inform our pre-emption analysis. See Hisquierdo v. Hisquierdo, 439 U.S. 572, 581 (1979).
The nine community property States have some 80 million residents, with perhaps $1 trillion in retirement plans. See Brief for Estate Planning, Trust and Probate Law Section of the State Bar of California as Amicus Curiae 1. This case involves a community property claim, but our ruling will affect as well the right to make claims or assert interests based on the law of any State, whether or not it recognizes community property. Our ruling must be consistent with the congressional scheme to assure the security of plan participants and their families in every State. In enacting ERISA, Congress noted the importance of pension plans in its findings and declaration of policy, explaining:
"[T]he growth in size, scope, and numbers of employee benefit plans in recent years has been rapid and substantial; . . . the continued well being and security of millions of employees and their dependents are directly affected by these plans; . . . they are affected with a national public interest [and] they have become an important factor affecting the stability of employment and the successful development of industrial relations . . . ." 29 U.S.C. § 1001(a).
ERISA is an intricate, comprehensive statute. Its federal regulatory scheme governs employee benefit plans, which include both pension and welfare plans. All employee benefit plans must conform to various reporting, disclosure and fiduciary requirements, see §§1021-1031, 1101-1114, while pension plans must also comply with participation, vesting, and funding requirements, see §§1051-1086. The surviving spouse annuityand QDRO provisions, central to the dispute here, are part of the statute's mandatory participation and vesting requirements. These provisions provide detailed protections to spouses of plan participants which, in some cases, exceed what their rights would be were community property law the sole measure.
ERISA's express pre-emption clause states that the Act "shall supersede any and all State laws insofar as they may now or hereafter relate to any employee benefit plan . . . ." §1144(a). We can begin, and in this case end, the analysis by simply asking if state law conflicts with the provisions of ERISA or operates to frustrate its objects. We hold that there is a conflict, which suffices to resolve the case. We need not inquire whether the statutory phrase "relate to" provides further and additional support for the pre-emption claim. Nor need we consider the applicability of field pre-emption, see Fidelity Fed. Sav. & Loan Assn. v. De La Cuesta, 458 U.S. 141, 153 (1982).
We first address the survivor's annuity and then turn to the other pension benefits.
Sandra Boggs, as we have observed, asserts that federal law pre-empts and supersedes state law and requires the surviving spouse annuity to be paid to her as the sole beneficiary. We agree.
The annuity at issue is a qualified joint and survivor annuity mandated by ERISA. Section 1055(a) provides:
"Each pension plan to which this section applies shall provide that--
"(1) in the case of a vested participant who does not die before the annuity starting date, the accrued benefit payable to such participant shall be provided in the form of a qualified joint and survivor annuity."
ERISA requires that every qualified joint and survivor annuity include an annuity payable to a nonparticipant surviving spouse. The survivor's annuity may not be less than 50% of the amount of the annuity which is payable during the joint lives of the participant and spouse. §1055(d)(1). Provision of the survivor's annuity may not be waived by the participant, absent certain limited circumstances, unless the spouse consents in writing to the designation of another beneficiary, which designation also cannot be changed without further spousal consent, witnessed by a plan representative or notary public. §1055(c)(2). Sandra Boggs, as the surviving spouse, is entitled to a survivor's annuity under these provisions. She has not waived her right to the survivor's annuity, let alone consented to having the sons designated as the beneficiaries.
Respondents say their state law claims are consistent with these provisions. Their claims, they argue, affect only the disposition of plan proceeds after they have been disbursed by the Bell South Service Retirement Program, and thus nothing is required of the plan. ERISA's concern for securing national uniformity in the administration of employee benefit plans, in their view, is not implicated. They argue Sandra's community property obligations, after she receives the survivor annuity payments, "fai[l] to implicate the regulatory concerns of ERISA." Fort Halifax Packing Co. v. Coyne, 482 U.S. 1, 15 (1987).
We disagree. The statutory object of the qualified joint and survivor annuity provisions, along with the rest of §1055, is to ensure a stream of income to surviving spouses. Section 1055 mandates a survivor's annuity not only where a participant dies after the annuity starting date but also guarantees one if the participant dies before then. See §§1055(a)(2), (e). These provisions, enacted as part of the Retirement Equity Act of 1984 (REA), Pub. L. 98-397, 98 Stat. 1426, enlarged ERISA's protection of surviving spouses in significant respects. Before REA, ERISA only required that pension plans, if they provided for the payment of benefits in the form of an annuity, offer a qualified joint and survivor annuity as an option entirely within a participant's discretion. 29 U.S.C. §§ 1055(a), (e) (1982 ed.). REA modified ERISA to permit participants to designate a beneficiary for the survivor's annuity, other than the nonparticipant spouse, only when the spouse agrees. §1055(c)(2). Congress' concern for surviving spouses is also evident from the expansive coverage of §1055, as amended by REA. Section 1055's requirements, as a general matter, apply to all "individual account plans" and "defined benefit plans." §1055(b)(1). The terms are defined, for §1055 purposes, so that all pension plans fall within those two categories. See §1002(35). While some individual account plans escape §1055's surviving spouse annuity requirements under certain conditions, Congress still protects the interests of the surviving spouse by requiring those plans to pay the spouse the nonforfeitable accrued benefits, reduced by certain security interests, in a lump sum payment. §1055(b)(1)(C).
ERISA's solicitude for the economic security of surviving spouses would be undermined by allowing a predeceasing spouse's heirs and legatees to have a community property interest in the survivor's annuity. Even a plan participant cannot defeat a nonparticipant surviving spouse's statutory entitlement to an annuity. It would be odd, to say the least, if Congress permitted a predeceasing nonparticipant spouse to do so. Nothing in the language of ERISA supports concluding that Congress made such an inexplicable decision. Testamentary transfers could reduce a surviving spouse's guaranteed annuity below the minimum set by ERISA (defined as 50% of the annuity payable during the joint lives of the participant and spouse). In this case, Sandra's annuity would be reduced by approximately 20%, according to the calculations contained in the sons' state court filings. There is no reason why testamentary transfers could not reduce a survivor's annuity by an even greater amount. Perhaps even more troubling, the recipient of the testamentary transfer need not be a family member. For instance, a surviving spouse's §1055 annuity might be substantially reduced so that funds could be diverted to support an unrelated stranger.
In the face of this direct clash between state law and the provisions and objectives of ERISA, the state law cannot stand. Conventional conflict pre-emption principles require pre-emption "where compliance with both federal and state regulations is a physical impossibility, . . . or where state law stands as an obstacle to the accomplishment and execution of the full purposes and objectives of Congress." Gade v. National Solid Wastes Management Assn., 505 U.S. 88, 98 (1992) (internal quotation marks and citation omitted). It would undermine the purpose of ERISA's mandated survivor's annuity to allow Dorothy, the predeceasing spouse, by her testamentary transfer to defeat in part Sandra's entitlement to the annuity §1055 guarantees her as the surviving spouse. This cannot be. States are not free to change ERISA's structure and balance.
Louisiana law, to the extent it provides the sons with a right to a portion of Sandra Boggs' §1055 survivor's annuity, is pre-empted.
Beyond seeking a portion of the survivor's annuity, respondents claim a percentage of: the monthly annuity payments made to Isaac Boggs during his retirement; the IRA; and the ESOP shares of AT&T stock. As before, the claim is based on Dorothy Boggs' attempted testamentary transfer to the sons of her community interest in Isaac's undistributed pension plan benefits. Respondents argue further--and somewhat inconsistently--that their claim again concerns only what a plan participant or beneficiary may do once plan funds are distributed, without imposing any obligations on the plan itself. Both parties agree that the ERISA benefits at issue here were paid after Dorothy's death, and thus this case does not present the question whether ERISA would permit a nonparticipant spouse to obtain a devisable community property interest in benefits paid out during the existence of the community between the participant and that spouse.
A brief overview of ERISA's design is necessary to put respondents' contentions in the proper context. The principal object of the statute is to protect plan participants and beneficiaries. See Shaw v. Delta Air Lines, Inc., 463 U.S. 85, 90 (1983) ("ERISA is a comprehensive statute designed to promote the interests of employees and their beneficiaries in employee benefit plans"). Section 1001(b) states that the policy of ERISA is "to protect . . . the interests of participants in employee benefit plans and their beneficiaries." Section 1001(c) explains that ERISA contains certain safeguards and protections which help guarantee the "equitable character and the soundness of [private pension] plans" in order to protect "the interests of participants in private pension plans and their beneficiaries." The general policy is implemented by ERISA's specific provisions. Apart from a few enumerated exceptions, a plan fiduciary must "discharge his duties with respect to a plan solely in the interest of the participants and beneficiaries." §1104(a)(1). The assets of a plan, again with certain exceptions, are "held for the exclusive purposes of providing benefits to participants in the plan and their beneficiaries and defraying reasonable expenses of administering the plan." §1103(c)(1). The Secretary of Labor has authority to create exemptions to ERISA's prohibition on certain plan holdings, acquisitions, and transactions, but only if doing so is in the interests of the plan's "participants and beneficiaries." §1108(a)(2). Persons with an interest in a pension plan may bring a civil suit under ERISA's enforcement provisions only if they are either a participant or beneficiary. Section 1132(a)(1)(B), for instance, provides that a civil action may be brought "by a participant or beneficiary . . . to recover benefits due to him under the terms of his plan, to enforce his rights under the terms of the plan, or to clarify his rights to future benefits under the terms of the plan."
ERISA confers beneficiary status on a nonparticipant spouse or dependent in only narrow circumstances delineated by its provisions. For example, as we have discussed, §1055(a) requires provision of a surviving spouse annuity in covered pension plans, and, as a consequence the spouse is a beneficiary to this extent. Section 1056's QDRO provisions likewise recognize certain pension plan community property interests of nonparticipant spouses and dependents. A QDRO is a type of domestic relations order which creates or recognizes an alternate payee's right to, or assigns to an alternate payee the right to, a portion of the benefits payable with respect to a participant under a plan. §1056(d)(3)(B)(i). A domestic relations order, in turn, is any judgment, decree, or order that concerns "the provision of child support, alimony payments, or marital property rights to a spouse, former spouse, child, or other dependent of a participant" and is "made pursuant to a State domestic relations law (including a community property law)." §1056(d)(3)(B)(ii). A domestic relations order must meet certain requirements to qualify as a QDRO. See §§1056(d)(3)(C)-(E). QDRO's, unlike domestic relations orders in general, are exempt from both the pension plan anti alienation provision, §1056(d)(3)(A), and ERISA's general pre-emption clause, §1144(b)(7). In creating the QDRO mechanism Congress was careful to provide that the alternate payee, the "spouse, former spouse, child, or other dependent of a participant," is to be considered a plan beneficiary. §§1056(d)(3)(K), (J). These provisions are essential to one of REA's central purposes, which is to give enhanced protection to the spouse and dependent children in the event of divorce or separation, and in the event of death the surviving spouse. Apart from these detailed provisions, ERISA does not confer beneficiary status on nonparticipants by reason of their marital or dependent status.
Even outside the pension plan context and its anti alienation restriction, Congress deemed it necessary to enact detailed provisions in order to protect a dependent's interest in a welfare benefit plan. Through a §1169 "qualified medical child support order" a child's interest in his or her parent's group health care plan can be enforced. A "medical child support order" is defined as any judgment, decree, or order that concerns the provision of child support "made pursuant to a State domestic relations law (including a community property law) and relates to benefits under such plan." §1169(a)(2)(B)(i). As with a QDRO, a "medical child support order" must satisfy certain criteria in order to qualify. See §§1169(a)(3)-(4). In accordance with ERISA's care in conforming entitlements to benefits with participant or beneficiary status, the statute treats a child subject to such a qualifying order as a participant for ERISA's reporting and disclosure requirements and as a beneficiary for other purposes. §1169(a)(7).
The surviving spouse annuity and QDRO provisions, which acknowledge and protect specific pension plan community property interests, give rise to the strong implication that other community property claims are not consistent with the statutory scheme. ERISA's silence with respect to the right of a nonparticipant spouse to control pension plan benefits by testamentary transfer provides powerful support for the conclusion that the right does not exist. Cf. Massachusetts Mut. Life Ins. Co. v. Russell, 473 U.S. 134, 147-148 (1985). It should cause little surprise that Congress chose to protect the community property interests of separated and divorced spouses and their children, a traditional subject of domestic relations law, but not to accommodate testamentary transfers of pension plan benefits. As a general matter, "[t]he whole subject of the domestic relations of husband and wife, parent and child, belongs to the laws of the States and not to the laws of the United States." In re Burrus, 136 U.S. 586, 593-594 (1890). Support obligations, in particular, are "deeply rooted moral responsibilities" that Congress is unlikely to have intended to intrude upon. See Rose v. Rose, 481 U.S. 619, 632 (1987); see also id., at 636-640 (O'Connor, J., concurring). In accord with these principles, Congress ensured that state domestic relations orders, as long as they meet certain statutory requirements, are not pre-empted.
We conclude the sons have no claim under ERISA to a share of the retirement benefits. To begin with, the sons are neither participants nor beneficiaries. A "participant" is defined as an "employee or former employee of an employer, or any member or former member of an employee organization, who is or may become eligible to receive a benefit." §1002(7). A "beneficiary" is a "person designated by a participant, or by the terms of an employee benefit plan, who is or may become entitled to a benefit thereunder." §1002(8). Respondents' claims are based on Dorothy Boggs' attempted testamentary transfer, not on a designation by Isaac Boggs or under the terms of the retirement plans. They do not even attempt to argue that they are beneficiaries by virtue of the judgment of possession qualifying as a QDRO.
An amicus, the Estate Planning, Trust and Probate Law Section of the State Bar of California, in support of respondents' position, points to pre-REA case law holding that ERISA does not pre-empt spousal community property interests in pension benefits, regardless of who is the plan participant or beneficiary. As did the District Court below, the amicus relies in particular upon In re Marriage of Campa, 89 Cal. App. 3d 113, 152 Cal. Rptr. 362 (1979), in which the California Court of Appeals for the First District held that ERISA does not bar California courts from joining pension funds in marriage dissolution proceedings and ordering the pension plan to divide pension payments between the employee and his or her former nonparticipant spouse. We dismissed the pension plan's appeal for want of a substantial federal question, 444 U.S. 1028 (1980), and, although not entitled to full precedential weight, see Edelman v. Jordan, 415 U.S. 651, 670-671 (1974), that disposition constitutes a decision on the merits, see Hicks v. Miranda, 422 U.S. 332, 344 (1975). The state court in Marriage of Campa was not alone in refusing to find ERISA pre-emption in the divorce context. See, e.g., Stone v. Stone, 450 F. Supp. 919 (ND Cal. 1978), aff'd, 632 F. 2d 740 (CA9 1980), cert. denied, 453 U.S. 922 (1981); Savings and Profit Sharing Fund of Sears Employees v. Gago, 717 F. 2d 1038 (CA7 1983); Eichelberger v. Eichelberger, 584 F. Supp. 899 (SD Tex. 1984). This judicial consensus, amicus argues, was codified by the QDRO provisions which were contained in the 1984 REA amendments. The amicus contends that since REA, or the pre-REA case law which it allegedly adopted, did not consider the community property rights of a nonparticipant spouse in the testamentary context, it should not be construed to pre-empt state law governing this different subject.
We disagree with this reasoning. It is true that the subject of testamentary transfers is somewhat removed from domestic relations law. The QDRO provisions address the rights of divorced and separated spouses, and their dependent children, which are the traditional concern of domestic relations law. The pre-REA federal common law extension of §1002(8)'s definition of "beneficiary" by courts in the context of marital dissolution was in part based on an appreciation of the fact that domestic relations law is primarily an area of state concern, see Marriage of Campa, supra, at 124, 152 Cal. Rptr., at 367-368, and the basic principle that a beneficiary's interest in a spendthrift trust, despite otherwise applicable protections, can be reached in the context of divorce and separation. See E. Griswold, Spendthrift Trusts 389-391 (2d ed. 1947) (summarizing state case law); Restatement (Second) of Trusts §157 (1959). The state court in Marriage of Campa took its implicit determination that the nonparticipant spouse was a beneficiary to its logical conclusion, forcing the pension plan to join the marital dissolution proceedings as a party and compelling it to pay the spouse her share of the pension benefits. Whether or not this extension of the definition of "beneficiary" was consistent with the statute then in force, these authorities are not applicable in light of the REA amendments. The QDRO and the surviving spouse annuity provisions define the scope of a nonparticipant spouse's community property interests in pension plans consistent with ERISA.
Respondents and their amicus in effect ask us to ignore §1002(8)'s definition of "beneficiary" and, through case law, create a new class of persons for whom plan assets are to be held and administered. The statute is not amenable to this sweeping extratextual extension. It is unpersuasive to suggest that third parties could assert their claims without being counted as "beneficiaries." A plan fiduciary's responsibilities run only to participants and beneficiaries. §1104(a)(1). Assets of a plan are held for the exclusive purposes of providing benefits to participants and beneficiaries and defraying reasonable expenses of administration. §1103(c)(1). Reading ERISA to permit nonbeneficiary interests, even if not enforced against the plan, would result in troubling anomalies. Either pension plans would be run for the benefit of only a subset of those who have a stake in the plan or state law would have to move in to fill the apparent gaps between plan administration responsibilities and ownership rights, resulting in a complex set of requirements varying from State to State. Neither result accords with the statutory scheme.
The conclusion that Congress intended to pre-empt respondents' nonbeneficiary, nonparticipant interests in the retirement plans is given specific and powerful reinforcement by the pension plan anti alienation provision. Section 1056(d)(1) provides that "[e]ach pension plan shall provide that benefits provided under the plan may not be assigned or alienated." Statutory anti alienation provisions are potent mechanisms to prevent the dissipation of funds. In Hisquierdo we interpreted an anti alienation provision to bar a divorced spouse's interest in her husband's retirement benefits. See 439 U. S., at 583-590. ERISA's pension plan anti alienation provision is mandatory and contains only two explicit exceptions, see §§1056(d)(2), (d)(3)(A), which are not subject to judicial expansion. See Guidry v. Sheet Metal Workers Nat. Pension Fund, 493 U.S. 365, 376 (1990). The anti alienation provision can "be seen to bespeak a pension law protective policy of special intensity: Retirement funds shall remain inviolate until retirement." J. Langbein & B. Wolk, Pension and Employee Benefit Law 547 (2d ed. 1995).
Dorothy's 1980 testamentary transfer, which is the source of respondents' claimed ownership interest, is a prohibited "assignment or alienation." An "assignment or alienation" has been defined by regulation, with certain exceptions not at issue here, as "[a]ny direct or indirect arrangement whereby a party acquires from a participant or beneficiary" an interest enforceable against a plan to "all or any part of a plan benefit payment which is, or may become, payable to the participant or beneficiary." 26 CFR § 1.401(a)-13(c)(1)(ii). Those requirements are met. Under Louisiana law community property interests are enforceable against a plan. See Eskine v. Eskine, 518 So. 2d 505, 508 (La. 1988). If respondents' claims were allowed to succeed they would have acquired, as of 1980, an interest in Isaac's pension plan at the expense of plan participants and beneficiaries.
As was true with survivors' annuities, it would be inimical to ERISA's purposes to permit testamentary recipients to acquire a competing interest in undistributed pension benefits, which are intended to provide a stream of income to participants and their beneficiaries. See Guidry, supra, at 376 ("[The anti alienation provision] reflects a considered congressional policy choice, a decision to safeguard a stream of income for pensioners . . . and their dependents . . ."). Pension benefits support participants and beneficiaries in their retirement years, and ERISA's pension plan safeguards are designed to further this end. See §1001(c). Besides the anti alienation provision, Congress has enacted other protective measures to guarantee that retirement funds are there when a plan's participants and beneficiaries expect them. There are, for instance, minimum funding standards for pension plans and a pension plan termination insurance program which guarantees benefits in the event a plan is terminated before being fully funded. See §§1082, 1301-1461. Under respondents' approach, retirees could find their retirement benefits reduced by substantial sums because they have been diverted to testamentary recipients. Retirement benefits and the income stream provided for by ERISA regulated plans would be disrupted in the name of protecting a nonparticipant spouses' successors over plan participants and beneficiaries. Respondents' logic would even permit a spouse to transfer an interest in a pension plan to creditors, a result incompatible with a spendthrift provision such as §1056(d)(1).
Community property laws have, in the past, been pre-empted in order to ensure the implementation of a federal statutory scheme. See, e.g., McCune v. Essig, 199 U.S. 382 (1905); Wissner v. Wissner, 338 U.S. 655 (1950); Free v. Bland, 369 U.S. 663 (1962); Hisquierdo v. Hisquierdo, 439 U.S. 572 (1979); McCarty v. McCarty, 453 U.S. 210 (1981); Mansell v. Mansell, 490 U.S. 581 (1989); cf. Ridgeway v. Ridgeway, 454 U.S. 46 (1981). Free v. Bland, supra, is of particular relevance here. A husband had purchased United States savings bonds with community funds in the name of both spouses. Under Treasury regulations then in effect, when a co owner of the bonds died, the surviving co owner received the entire interest in the bonds. After the wife died, her son--the principal beneficiary of her will--demanded either one half of the bonds or reimbursement for loss of the community property interest. The Court held that the regulations pre-empted the community property claim, explaining:
"One of the inducements selected by the Treasury is the survivorship provision, a convenient method of avoiding complicated probate proceedings. Notwithstanding this provision, the State awarded full title to the co owner but required him to account for half of the value of the bonds to the decedent's estate. Viewed realistically, the State has rendered the award of title meaningless." Id., at 669.
The same reasoning applies here. If state law is not pre-empted, the diversion of retirement benefits will occur regardless of whether the interest in the pension plan is enforced against the plan or the recipient of the pension benefit. The obligation to provide an accounting, moreover, as with the probate proceedings referred to in Free, is itself a burden of significant proportions. Under respondents' view, a pension plan participant could be forced to make an accounting of a deceased spouse's community property interest years after the date of death. If the couple had lived in several States, the accounting could entail complex, expensive, and time consuming litigation. Congress could not have intended that pension benefits from pension plans would be given to accountants and attorneys for this purpose.
Respondents contend it is anomalous and unfair that a divorced spouse, as a result of a QDRO, will have more control over a portion of his or her spouse's pension benefits than a predeceasing spouse. Congress thought otherwise. The QDRO provisions, as well as the surviving spouse annuity provisions, reinforce the conclusion that ERISA is concerned with providing for the living. The QDRO provisions protect those persons who, often as a result of divorce, might not receive the benefits they otherwise would have had available during their retirement as a means of income. In the case of a predeceased spouse, this concern is not implicated. The fairness of the distinction might be debated, but Congress has decided to favor the living over the dead and we must respect its policy.
The axis around which ERISA's protections revolve is the concepts of participant and beneficiary. When Congress has chosen to depart from this framework, it has done so in a careful and limited manner. Respondents' claims, if allowed to succeed, would depart from this framework, upsetting the deliberate balance central to ERISA. It does not matter that respondents have sought to enforce their rights only after the retirement benefits have been distributed since their asserted rights are based on the theory that they had an interest in the undistributed pension plan benefits. Their state law claims are pre-empted. The judgment of the Fifth Circuit is