IN RE: the Marriage of Janet D. and Gene T. SHELSTEAD. Janet D. SHELSTEAD, Respondent, v. Gene T. SHELSTEAD, Respondent; Carpenters Pension Trust for Southern California, Appellant.
Gene Shelstead earned pension benefits in Carpenters Pension Trust for Southern California (CPT), a multi-employer trust fund governed by the Employee Retirement Income Security Act of 1974 (ERISA).1 In a dissolution action, Gene and his wife, Janet Shelstead, agreed to divide the future pension benefits equally and agreed that Janet had the right to bequeath her interest to a third party if she predeceased Gene. Janet obtained an order requiring CPT to comply with the parties' agreement. CPT appeals from that order.
CPT does not dispute that the parties' agreement and the court order are permissible under California law. CPT argues, however, that ERISA, as amended by the Retirement Equity Act of 1984, preempts our state's community property law and precludes the Shelsteads from agreeing to provide Janet with testamentary control over her community property portion of the pension benefits.
As explained below, the resolution of this issue depends on whether the court order affirming the Shelsteads' agreement is a “qualified domestic relations order” (QDRO). (§ 1056(d)(3)(A).) If the order is a QDRO, state law applies and we must affirm the order. If the order is not a QDRO, state law is preempted and the order is an invalid alienation of pension benefits.
CPT argues the court order is not a QDRO because (1) it provides a type or form of benefit not provided in CPT's plan; and (2) Janet's “successor in interest” is not an “alternate payee” within the meaning of ERISA. Based on our analysis of ERISA's statutory language, legislative history, and underlying public policy, we reject these arguments. We determine, however, the court order is not a QDRO to the extent it does not identify the name or address of Janet's successor in interest or the mechanism for determining an alternate successor. We reverse and remand for proceedings consistent with this decision.
FACTUAL AND PROCEDURAL BACKGROUND
Janet and Gene Shelstead married on June 16, 1973. During the marriage, Gene became a vested participant in CPT. Janet and Gene separated on November 17, 1992. During the subsequent marital dissolution action, the parties joined CPT as a party. The court entered a judgment of dissolution on August 30, 1993. The judgment awarded Janet one-half interest in the community portion of Gene's pension fund with CPT. The court determined the community property benefit reflected Gene's employment from January 16, 1973 through November 17, 1992.
On February 1, 1994, the court signed a document entitled “Qualified Domestic Relations Order.” The order stated the parties agreed that each would receive 50 percent of the community portion of Gene's CPT pension benefits. Paragraph 5 stated that:
“Commencing with the effective date of [Gene's] pension benefit, ․ [CPT] shall pay to [Janet] each month [Janet's] share of pension benefit. The share payable to [Janet] shall continue to be paid to [Janet], or her designated successor in interest should [Janet] predecease [Gene], until terminated by [Gene's] death. [CPT] shall not be liable to [Gene] for any payments made to [Janet] before Trust receives written notice of [Janet's] death.” (Italics added.)
After Janet served the order on CPT, CPT advised Janet that the order was not a QDRO since it required CPT to pay Janet's designated successor if she predeceased Gene. (See § 1056(d)(3)(G)(i)(II).) 2
Janet petitioned for an order to show cause, asking the trial court to order CPT to comply with the February 1 order. After a hearing, the court found the February 1 order was a QDRO and that the order “[did] not impose an excessive burden on [CPT].” The court awarded attorney fees of $2,000 against CPT.
CPT appeals, asserting the court erred in determining the February 1 order was a QDRO and in awarding attorney fees to Janet. Janet did not file a respondent's brief.
Because the issues raised by CPT are of first impression, we invited amicus curiae briefs from several family law and appellate organizations. The San Diego County Certified Family Law Specialists 3 responded and filed an amicus curiae brief supporting Janet's position below that the February 1 order is a QDRO. Two other organizations filed amicus curiae briefs: the United States Department of Labor (DOL) and a group of pension funds (Pension Funds).4 The Pension Funds maintained that the February 1 order is not a QDRO. The DOL expressed its opinion that CPT's plan administrator should have qualified the February 1 order as a QDRO, but urged us to dismiss the appeal, asserting the trial court had no jurisdiction over the matter.
I. The February 1 Order is Proper Under California Law
Under California law, pension benefits earned through labor during a marriage are community property. (In re Marriage of Powers (1990) 218 Cal.App.3d 626, 635, 267 Cal.Rptr. 350.) Before 1986, the terminable interest rule governed the division of community property pension benefits in California. (Id. at p. 634, 267 Cal.Rptr. 350.) Under this rule, a nonparticipant spouse's interest in community property pension benefits did not extend to benefits payable after the death of either spouse. (Id. at p. 635, 267 Cal.Rptr. 350.) Thus, if the employee spouse died first, the nonemployee spouse could not claim an interest in the remaining community property pension benefits if the employee spouse designated a third party to receive the benefits after his or her death. (Ibid.) If the nonemployee spouse died first, his or her interest in the pension benefits terminated and the nonemployee spouse could not bequeath these benefits by will. (Ibid.)
Courts and commentators criticized the terminable interest rule as unfair because it resulted in an unequal division of community property benefits, depriving the nonparticipant spouse of his or her earned rights and creating an unfair windfall profit to the employee. (In re Marriage of Powers, supra, 218 Cal.App.3d at pp. 635–636, 267 Cal.Rptr. 350; In re Marriage of Taylor (1987) 189 Cal.App.3d 435, 440, 234 Cal.Rptr. 486; In re Marriage of Peterson (1974) 41 Cal.App.3d 642, 656, 115 Cal.Rptr. 184, [[“Husband's] pension rights constitute a bundle to which [wife], as a partner in the community during the years of marriage contributed her equal share. Why should she be deprived of her right to any single stick in the bundle? [Citation.]”].)
To rectify the perceived injustice, in 1986 the California Legislature enacted former Civil Code section 4800.8 (section 4800.8), providing a “court shall make whatever orders are necessary or appropriate to assure that each party receives his or her full community property share in any retirement plan, whether public or private, including all survivor and death benefits․” In an uncodified section, the Legislature stated it intended to “abolish the terminable interest rule ․ in order that retirement benefits shall be divided in accordance with Section 4800.” (Stats.1986, ch. 686, § 2, p. 2313; see In re Marriage of Nice (1991) 230 Cal.App.3d 444, 451, 281 Cal.Rptr. 415; In re Marriage of Powers, supra, 218 Cal.App.3d at p. 636, 267 Cal.Rptr. 350.)
Under section 4800.8, a court had the authority to provide a nonparticipant spouse with testamentary control over his or her community property pension benefits. (In re Marriage of Powers, supra, 218 Cal.App.3d at pp. 634–646, 267 Cal.Rptr. 350; In re Marriage of Taylor (1987) 189 Cal.App.3d at pp. 440–441, 234 Cal.Rptr. 486.) In re Marriage of Powers applied section 4800.8 retroactively and affirmed a trial court's order directing the employer to pay to the wife's estate the wife's community interest in the husband-employee's non-ERISA retirement plan. (In re Marriage of Powers, supra, at pp. 634–646, 267 Cal.Rptr. 350; see In re Marriage of Nice, supra, 230 Cal.App.3d at p. 452, 281 Cal.Rptr. 415.) 5
Effective 1994, the Legislature repealed section 4800.8, but continued the code section in Family Code section 2610 without substantive change. Although Family Code section 2610 governs California law with respect to a nonparticipant spouse's right to testamentary control over his or her community portion of a pension benefit, this code section does not resolve the issue before us. That is because, as explained below, our federal government has preempted state law with respect to the division of community property pension benefits in an ERISA plan.
II. ERISA Preemption
ERISA is a comprehensive federal statutory scheme designed to promote the interests of employees and their beneficiaries in employee benefit plans. (Burch v. George (1994) 7 Cal.4th 246, 288, 27 Cal.Rptr.2d 165, 866 P.2d 92.) As originally enacted, ERISA contained a broad preemption clause, providing that ERISA provisions preempt any state law relating to an employee benefit plan. (§ 1144(a).) ERISA also contained an anti-alienation or spendthrift provision, stating “[e]ach pension plan shall provide that benefits provided under the plan may not be assigned or alienated.” (§ 1056(d)(1).) Congress included the spendthrift provision to protect employees and their dependents from the participant's financial improvidence and to ensure benefits were available upon retirement. (See Guidry v. Sheet Metal Workers Pension Fund (1990) 493 U.S. 365, 376, 110 S.Ct. 680, 687, 107 L.Ed.2d 782.)
Shortly after ERISA's enactment, it became apparent that Congress had failed to consider the pension rights of nonparticipant spouses, most of whom at that time were women. (See Ablamis v. Roper, supra, 937 F.2d at p. 1453 (Ablamis ); In re Marriage of Baker (1988) 204 Cal.App.3d 206, 216, 251 Cal.Rptr. 126; Anderson, The Right to Pension Benefits Under ERISA When a Nonemployee Spouse Predeceases the Employee Spouse (1992) 67 Wash.L.Rev. 625, 628.) One significant issue concerned whether the anti-alienation provision prevented pension benefits from being divided between spouses at divorce. (See Summers, ERISA Preemption of “Direct” and “Indirect” Community Property Interests in Pension Plans Upon the Non–Participant Spouse's Death (1994) 55 La.L.Rev. 409, 420.) Courts began grappling with the question whether the transfer of pension benefits incident to a divorce was an “assign[ment]” or “alienat[ion]” under the meaning of this provision. Although most courts held the alienation provision was not applicable to transfers or allocations between an employee and his or her former spouse (see, e.g., In re Marriage of Campa (1979) 89 Cal.App.3d 113, 121–131, 152 Cal.Rptr. 362; American Tel. & Tel. Co. v. Merry (2d Cir.1979) 592 F.2d 118, 120–125), some courts held that ERISA's preemption provision prevented the application of state community property law with respect to inter-spousal transfers. (See Francis v. United Technologies Corp. (N.D.Cal.1978) 458 F.Supp. 84, 86.)
Seeking to address the issues left open in ERISA and to guarantee that “the Nation's private retirement-income system provided fair treatment for women,” Congress enacted an amendment to ERISA, known as the Retirement Equity Act of 1984 (REA). (Mackey v. Lanier Collection Agency & Serv. (1988) 486 U.S. 825, 838, 108 S.Ct. 2182, 2190, 100 L.Ed.2d 836; see Ablamis, supra, 937 F.2d at p. 1453; In re Marriage of Baker, supra, 204 Cal.App.3d at pp. 213, 216–217, 251 Cal.Rptr. 126.) Of particular relevance here, Congress had two objectives—it wanted to ensure an equitable division of marital property upon divorce or death and it wanted to resolve the uncertainty with respect to the rules governing the division of pension rights in the divorce context. (See In re Marriage of Baker, supra, 204 Cal.App.3d at pp. 216–217, 251 Cal.Rptr. 126; Summers, op. cit. supra, 55 La.L.Rev. at pp. 423–425; Sen. Rep. No. 98–575, 2d Sess., pp. 18–19 (1984) reprinted in 1984 U.S.Code Cong. & Admin. News at pp. 2547, 2564–2565.) Although it could have done so, Congress did not attempt to achieve these objectives by broadly permitting all interspousal transfers of pension benefits. Instead, Congress took a two-step approach.
First, it declared the transfers of pension benefits between spouses in a divorce context were prohibited alienations within the meaning of the anti-alienation provision. (§ 1056(d)(1) & (d)(3)(A).) 6 Second, Congress created a limited exception to the rule that such alienations were prohibited. Section 1056(d)(3)(A) states the anti-alienation provision “shall not apply if the order is determined to be a qualified domestic relations order [QDRO].” Consistent with this language, Congress added an exception to the express ERISA preemption provision, stating that preemption provision “shall not apply to [QDROs].” (§ 1144(b)(7).)
Taken together, these amendments make clear that a domestic relations order that does not satisfy the QDRO criteria is specifically barred by the spendthrift clause and that such federal rule preempts state community property law. (See In re Marriage of Baker, supra, 204 Cal.App.3d at p. 219, 251 Cal.Rptr. 126 [“only if the state court order is a QDRO is it exempt from the anti-alienation provisions of ERISA․”]; Fox Valley & Vic. Const. Wkrs. Pension Fund v. Brown (7th Cir.1990) 897 F.2d 275, 279; Stott v. Bunge Corp. (E.D.Tenn.1992) 800 F.Supp. 567, 573.) As one commentator explains, “[b]y stating explicitly that divorce divisions of pension plans are [alienations], Congress has foreclosed community ownership of the right to receive benefits by non-participant spouses unless that right is transferred to the spouse by a QDRO.” (Summers, op. cit. supra, 55 La.L.Rev. at p. 438.)
Guided by the language and history of ERISA and the REA, and mindful of the policies underlying the enactment of these statutes, we turn to examine whether the February 1 order is a QDRO.
III. Is the February 1 Order a QDRO?
To establish an order is a QDRO, the parties must show it is a “domestic relations order” and that it is a “qualified” order. (See § 1056(d)(3)(A).)
Section 1056(d)(3)(B)(ii) defines a “domestic relations order” to mean a property settlement agreement which “relates to the provision of ․ marital property rights to a spouse, former spouse, child, or other dependent of a participant” and which “is made pursuant to a State domestic relations law (including a community property law).” (§ 1056(d)(3)(B)(ii).) The February 1 order satisfies these requirements since it reflects a property division upon divorce and was made pursuant to Family Code section 2610.
CPT does not challenge that the February 1 order is a domestic relations order. CPT instead contends the February 1 order is not a “qualified” domestic relations order because the portion of the order providing Janet with the right to appoint a successor to receive her community property pension benefits after her death violates statutory requirements relating to (1) the form or type of benefits which may be transferred in a domestic relations order and (2) the identity of the person to whom the benefits may be transferred. CPT further argues this case is indistinguishable from Ablamis, supra, 937 F.2d 1450, which held ERISA preempts California community property law to the extent it permits a married nonemployee spouse to bequeath her community property interest in pension benefits.
A. Ablamis v. Roper
We initially reject CPT's argument that the issue whether the February 1 order was a “qualified” order is “easily answered” by the Ninth Circuit in Ablamis, supra, 937 F.2d 1450. In Ablamis, the wife of an ERISA plan participant named her children from a former marriage as beneficiaries of a portion of her community property pension benefits. (Id. at p. 1452.) After the wife died, the trustee of the ERISA plan obtained a declaratory order holding that the wife's estate was not entitled to an interest in the community pension benefits. Ablamis affirmed, reasoning the attempted transfer was a prohibited alienation under ERISA because a transfer of benefits in probate is not a “domestic relations” order.7 (Id. at pp. 1455–1456.) Thus, the court did not fully analyze the issue whether a domestic relations order providing a nonemployee spouse with testamentary rights over pension benefits was “qualified” within the meaning of the REA. Further, although the court stressed that its conclusion was consistent with ERISA's original goal of ensuring that retired persons (rather than their heirs) would receive pension funds during their lifetimes, it recognized that rights to pension benefits may be different in the divorce context.8 (Id. at p. 1457.)
B. Form or Type of Benefits
CPT next directs us to section 1056(d)(3)(D), which states, in relevant part, a domestic relations order is qualified “only if” it
“(i) does not require a plan to provide any type or form of benefit, or any option, not otherwise provided under the plan, [and]
(ii) does not require the plan to provide increased benefits (determined on the basis of actuarial value)․” (Italics added.)
CPT concedes paragraph 5 of the February 1 order does not require it to provide increased benefits. That is because under the terms of CPT's plan, if a vested participant is married at retirement and his or her spouse subsequently predeceases him or her, the plan continues to pay the nonparticipant spouse's interest, but those payments are paid to the participant spouse until his or her death. The February 1 order merely provides that in the event of Janet's death, the plan pays Janet's successor the same benefits it would have otherwise paid to Gene until Gene's death. Because CPT's payments to Janet's successor in interest would not require any increased benefits, paragraph 5 does not violate section 1056(d)(3)(E)(ii).
CPT argues, however, the February 1 order violates section 1056(d)(3)(E)(i) because the order requires it to provide a type or form of benefit not provided under the plan.9 CPT maintains that since CPT's plan does not permit a married nonemployee spouse who predeceases her participant spouse to designate a beneficiary, a former nonemployee spouse may not be provided with such right.
We believe this view is too narrow. CPT limits itself to comparing the benefits provided to Janet with the benefits provided to an existing nonemployee spouse. However, the language of section 1056(d)(3)(D)(i) does not support this view. The code section states a QDRO must provide benefits in a form or type provided “under the plan”; it does not state that the benefits must be provided only in a form provided to a nonemployee spouse. Moreover, the benefits to which Janet is potentially entitled are different and substantially less than what a married spouse would be entitled to under CPT's plan. Under CPT's plan, a spouse is entitled to an annuity for her life; under the February 1 order, Janet (or her successor) is entitled only to benefits for Gene's life.
Given the statutory language and history, we believe the more reasonable interpretation of section 1056(d)(3)(D)(i) is that if a participant is provided a form of benefit under the plan, a former spouse may also be provided such form of benefit, providing such benefit does not increase the total amount of benefits paid and does not create any added administrative burden. CPT does not dispute that the portion of the court's order providing Janet with testamentary control of her benefits until Gene's death does not increase the total amount of the payments. We thus must determine whether the plan provides a participant the option of directing pension benefits to a third party after the participant's death and whether the February 1 order creates an added administrative burden.
Based on our review of CPT's plan provisions, it appears that in several circumstances a participant has a right to control his or her share of pension benefits after his or her death. For example, a participant may, with the consent of his or her spouse, provide that a third party may receive a portion of the participant's pension benefits for the third party's lifetime. Additionally, if the employee dies before retirement, he or she is entitled to bequeath 50 percent of the retirement benefits to a third party.
Further, there is substantial evidence to support the trial court's finding that the requirement that CPT pay Janet's successor if she predeceases Gene will not create an increased administrative burden for CPT. The February 1 order requires the plan to pay a designated beneficiary a fixed monthly amount for a specified period of time; this form of payment is precisely the same to which the participant and any other beneficiary are entitled under the plan. As amici curiae Family Law Specialists point out, it would be different if the order required the plan to pay a lump sum payment or a payment in stock or benefit other than as provided in the plan. The fact that CPT must provide a check to a third party if Janet predeceases Gene does not create an added administrative burden. CPT's only additional task would be to write a different name and address on the check and envelope.
Accordingly, because a participant is provided the right to control his or her earned pension benefits after his or her death and providing a nonemployee former spouse with an equivalent right does not increase the administrative burden, the portion of the February 1 order providing Janet with the right of testamentary control does not violate the statutory requirement that the benefit be a type provided for in the plan. (§ 1056(d)(3)(D)(i).) In reaching this conclusion, we are mindful that “the general policy underlying the [REA's] provisions is that the domestic relations court is the appropriate forum to balance the equities between the parties and settle all controversies.” (H.R.Rep. No. 98–655(II), 2d Sess. p. 39 (1984).) Despite this policy objective, Congress did not create a blanket exception to the spendthrift provision for interspousal transfers because it wanted to minimize the administrative burden on plan administrators and ensure uniformity. (Ibid.) Upholding California community law in this instance will fulfill Congress's general policy of deferring to state community property law and will not undermine Congress's concern with the administration of ERISA pension plans.
C. Alternate Payee
CPT alternatively argues the February 1 order is not a QDRO because it may require CPT to pay an individual (Janet's successor) who is not an “alternate payee” within the meaning of the REA.
Section 1056(d)(3)(B)(i)(I) defines a QDRO to mean “a domestic relations order” that “creates or recognizes the existence of an alternate payee's right to, or assigns to an alternate payee the right to, receive all or a portion of the benefits payable with respect to a participant under a plan․” (Italics added.) “The term ‘alternate payee’ means any spouse, former spouse, child, or other dependent of a participant who is recognized by a domestic relations order as having a right to receive all, or a portion of, the benefits payable under a plan with respect to such participant.” (§ 1056(d)(3)(K), italics added.)
CPT's argument is flawed because section 1056(d)(3)(B)(i)(I) does not state that a domestic relations order is qualified only if each potential recipient of benefits is an alternate payee. Rather, it states that an order is qualified if it creates or recognizes the rights of an alternate payee to receive pension benefits. The February 1 order satisfies this requirement. Janet is an “alternate payee” because she is Gene's former spouse. The February 1 order expressly “recognizes” Janet's right to her community property portion of Gene's pension benefits. Thus, the order is a QDRO. The fact that the order further permits the alternate payee to exercise her rights under state community property law does not change this conclusion.
Put otherwise, the February 1 order does not create a new or independent “alternate payee.” Rather, the order simply recognizes Janet's legitimate interest in her community property share of Gene's retirement fund. (See In re Marriage of Powers, supra, 218 Cal.App.3d at p. 645, 267 Cal.Rptr. 350.) Such recognition includes Janet's right to direct her community property share to a third party. Because Janet is an “alternate payee” within the meaning of the REA and because she has the right under state law to direct her benefits upon her death, the fact that CPT may have to pay a third party (who may or may not fall within the definition of an alternate payee) does not mean the February 1 order is not qualified. A contrary conclusion would undermine a fundamental policy underlying the REA, which seeks to ensure an equitable division of pension benefits between spouses according to state law if the transfer is made in a domestic relations proceeding.
CPT's reliance on dicta in Ablamis, supra, 937 F.2d 1450 is misplaced. In a footnote, Ablamis observed that even if the probate transfer had been a domestic relations order, the order would not have been qualified because the wife's beneficiaries would not qualify as “alternate payees.” (Id. at p. 1456, fn. 11.) This conclusion is inapplicable here because in Ablamis the attempted probate transfer did not create or recognize an alternate payee's right to pension benefits. As Ablamis noted, “[a]n estate, even of a deceased spouse, certainly does not fall within even the most liberal construction of the phrase ‘spouse, former spouse, child or other dependent of the participant.’ ” (Id. at p. 1456.) This case is distinguishable because the February 1 order concerned the rights of an existing alternate payee (Janet).
We agree, however, with CPT's argument that the February 1 order violates statutory criteria to the extent it does not identify the designated successor. A QDRO must “clearly specif[y]” the person who is entitled to receive pension benefits and the person's address. (§ 1056(d)(3)(C).) The purpose of this requirement “is to reduce the expense of ERISA plans by sparing plan administrators the grief they experience when because of uncertainty concerning the identity of the beneficiary they pay the wrong person, or arguably the wrong person, and are sued by a rival claimant.” (Metropolitan Life Ins. Co. v. Wheaton (7th Cir.1994) 42 F.3d 1080, 1084.)
Based on the February 1 order, CPT would be subject to substantial uncertainty as to its responsibilities upon Janet's death. First, there would be no clear basis for CPT to determine the identity or address of Janet's successor in interest. Additionally, the order provides no direction or mechanism for determining who would be paid if Janet's designated successor predeceased Janet. Further, the order does not state who has the burden for keeping CPT informed of such necessary information.
Because the February 1 order fails to specify these matters, there was a basis for the CPT plan administrator to refuse to qualify the order as a QDRO. We remand to provide the court and the parties the opportunity to modify the order to state: (1) the identity of Janet's successor in interest, (2) the address of Janet's successor in interest, (3) the mechanism for determining an alternate successor, and (4) that the burden is on Janet and/or the successor in interest to keep CPT informed of status changes. If such modifications are made to the February 1 order, the order would constitute a QDRO.
In its amicus curiae brief, the DOL contends a state court does not have jurisdiction to decide whether a domestic relations order is a QDRO. Although CPT had never previously raised this argument, in its reply brief it “adopt[ed] the arguments of DOL ․ regarding jurisdiction.” Neither DOL nor CPT cited In re Marriage of Levingston (1993) 12 Cal.App.4th 1303, 1306, 16 Cal.Rptr.2d 100, filed over two years before the parties filed their briefs, in which the court rejected the identical jurisdiction argument.
In In re Marriage of Levingston, a wife obtained a domestic relations order specifying the amount of her community property interest in her former husband's pension benefits and ordering the pension fund to pay her in the form of a life annuity. (In re Marriage of Levingston, supra, 12 Cal.App.4th at p. 1305, 16 Cal.Rptr.2d 100.) After the pension fund refused to qualify the order, the wife petitioned for an order to show cause. (Ibid.) The trial court found the order was a QDRO and ordered the fund to qualify it and pay the wife accordingly. (Ibid.)
On appeal, the pension fund argued the state court had no jurisdiction to determine whether a domestic relations order is a QDRO. The court rejected the argument, determining the wife's action was to recover benefits, enforce her rights, and clarify her rights to future benefits and that ERISA specifically provides that state courts have concurrent jurisdiction over such matters. (In re Marriage of Levingston, supra, 12 Cal.App.4th at p. 1306, 16 Cal.Rptr.2d 100; see § 1132(a)(1)(B) & (e)(1).) The court also stressed state court jurisdiction is appropriate “[a]s a matter of both public policy and common sense․” (In re Marriage of Levingston, supra, at p. 1306, 16 Cal.Rptr.2d 100.) The court explained, “there already is a state court action, the marital dissolution action, to which the plan is a party. Thus, a motion in that court is simple, inexpensive and expeditious. We do not believe Congress ․ would require a separate federal court proceeding to decide whether or not the order is a QDRO. This would cause undue hardship, expense and delay to the affected party, and impose an unnecessary workload on already overburdened federal courts.” (Id. at pp. 1306–1307, 16 Cal.Rptr.2d 100.)
We agree ERISA's statutory language, judicial economy, and the need to avoid needless expense to divorcing couples support a state court's jurisdiction to determine whether a domestic relations order is a QDRO.10 Accordingly, we decline to dismiss the matter on jurisdiction grounds.
V. Attorney Fees
In her petition for an order to show cause, Janet requested the court to award her attorney fees of $2,500 “due to [CPT's] capricious and arbitrary action.” Janet did not specify the legal basis for her request. CPT opposed the request, asserting its refusal to qualify the order was reasonable given the complexity of the matter. In her reply brief, Janet made no attempt to justify her fee request. After taking the matter under submission, the court awarded Janet $2,000 in attorney fees because CPT's position was “totally without merit․” The court did not identify a statutory basis for the fee award.
The attorney fee order must be reversed for several reasons. First, we disagree with the court's finding that CPT's position was “totally without merit.” CPT was correct, in part, that the February 1 order did not constitute a QDRO. Further, the question of a former spouse's testamentary rights in pension benefits was of first impression and concerned a complex legal issue involving both state and federal law. There was a legitimate basis for CPT's refusal to qualify the February 1 order.
Moreover, a party is entitled to attorney fees only if such fees are permitted by statute or agreement. (See Trope v. Katz (1995) 11 Cal.4th 274, 278–279, 45 Cal.Rptr.2d 241, 902 P.2d 259.) There is no showing in the record that the parties agreed to a fee award or that the court based its fee award on a specific statute. Because Janet never proffered a statutory basis for the award in the trial court and did not file a respondent's brief in this court, we assume she concedes there was no statutory basis for the fee award.
On this record, we reverse the attorney fee award.11
We reverse and remand for proceedings consistent with this decision. All parties to bear their own costs.
1. 29 U.S.C. § 1001 et seq. All further statutory references are to this title unless otherwise specified.
2. Section 1056(d)(3)(G)(i)(II) provides “within a reasonable period after receipt of [a domestic relations order concerning transfer of pension benefits], [an ERISA] plan administrator shall determine whether such order is a qualified domestic relations order and notify the participant and each alternate payee of such determination.”
3. The San Diego County Certified Family Law Specialists is a county-wide association of attorneys who have been certified by the California State Bar as specialists in family law. The attorneys advise family law clients of both gender concerning the issues raised on appeal.
4. These pension funds were Pension Trust Fund for Operating Engineers, Carpenters Pension Trust Fund for Northern California, Laborers Pension Trust Fund for Northern California, and Cement Masons Pension Trust Fund for Northern California.
5. In light of section 4800.8 and the cases interpreting the code section (see, e.g., In re Marriage of Taylor, supra, 189 Cal.App.3d 435, 234 Cal.Rptr. 486; In re Marriage of Powers, supra, 218 Cal.App.3d 626, 267 Cal.Rptr. 350; In re Marriage of Nice, supra, 230 Cal.App.3d 444, 281 Cal.Rptr. 415), we disagree with the suggestion in Ablamis v. Roper (9th Cir.1991) 937 F.2d 1450, 1455, fn. 8 that California law is unsettled as to whether a nonparticipant spouse has a right to make a testamentary transfer of his or her community property pension benefits.
6. Section 1056(d)(3)(A) provides the anti-alienation provision “shall apply to the creation, assignment, or recognition of a right to any benefit payable with respect to a participant pursuant to a domestic relations order․” (Italics added.)
7. The dissent argued that Congress intended that the spendthrift provision apply only in the divorce context and that Congress did not intend to preempt state laws pertaining to a married nonemployee spouse's interest in a pension plan upon his or her death. (See Ablamis, supra, 937 F.2d at pp. 1462–1468; see also Boggs v. Boggs (5th Cir.1996) 82 F.3d 90, 97–98 [refusing to adopt Ablamis 's reasoning].) On November 1, 1996, the United States Supreme Court granted a petition for writ of certiorari in Boggs. (Boggs v. Boggs, supra, 82 F.3d 90, cert. granted 519 U.S. 957, 117 S.Ct. 379, 136 L.Ed.2d 297 .)
8. We note that most of the commentators have assumed, without analysis, that Ablamis does not apply in the divorce context. (See, e.g., Anderson, op. cit. supra, 67 Wash.L.Rev. at pp. 640–641.)
9. Although CPT asserted this argument in its opening brief, CPT appears to have abandoned the argument in its reply brief. In a footnote, CPT conceded the plan administrator “would probably have” approved the order if Janet had designated an “alternate payee” as her successor in interest. We nonetheless address this point, since CPT has never expressly withdrawn its argument and the issue is likely to arise in the future.
10. We reject Pension Funds' argument that CPT could not be properly joined as a party in a dissolution proceeding. (See In re Marriage of Baker, supra, 204 Cal.App.3d at p. 218, 251 Cal.Rptr. 126.) Moreover, the claim is improperly before us. An appellate court will generally consider only issues properly raised by the appealing parties, not completely new contentions urged for the first time by amici curiae.
11. Based on this conclusion, we do not reach CPT's argument that ERISA does not permit attorney fees in an action challenging a plan administrator's decision that a domestic relations order is not a QDRO. (See AT & T Management Pension Plan v. Tucker (C.D.Cal.1995) 902 F.Supp. 1168, 1178.)
HALLER, Associate Justice.
NARES, Acting P.J., and McDONALD, J., concur.