Court of Appeals finds family court has authority to order federal pensioner to designate particular beneficiary for survivor benefits plan

The March 6, 2013 Court of Appeals opinion in Barber v. Barber, 402 S.C. 96, 738 S.E.2d 845 (Ct. App. 2013), clarifies a narrow but frequently occurring equitable distribution issue: can the family court order a federal pensioner to designate a particular beneficiary for his or her survivor benefits plan?  The Court of Appeals held it can.

In Barber, Wife sought an order requiring Husband to name her as the beneficiary for his military and civil service pensions’ survivor benefits plan.  Such plans pay out a portion of the pensioner’s pension (typically 50%) for so long as the designated survivor lives, even if the pensioner dies. Husband had wanted to name his young son, who was born to Husband and a third party, as the beneficiary.  The family court’s equitable distribution order stated Wife “may elect to waive the Survivor Benefits Coverage.”  Wife did not elect to waive it and Husband appealed.

During the appeal Husband died and his estate took over representation.  Evidently his death rendered four of his five issues on appeal moot but not this issue.  Given his death, who would be beneficiary of his survivor benefit plan took on greater importance as only this beneficiary would receive pension benefits.

Husband’s estate argued that federal law prohibited the family court from requiring him to designate a particular person as the beneficiary of his survivor benefits plan.  The Court of Appeals disagreed, finding that federal law granted family courts this specific authority:

With regard to military retirement benefits, a person who is required by a court order in a divorce proceeding to provide survivor’s benefit coverage to a former spouse and who makes such an election may not change that election except through another court order that modifies the election provision of the first order. 10 U.S.C.A. § 1450 (2010). Similarly, survivor’s benefits in a civil service retirement plan are subject to “the terms of any decree of divorce or annulment or any court order or court-approved property settlement agreement incident to such decree.” 5 U.S.C.A. § 8341(h) (2007).

Accordingly the Court of Appeals affirmed the family court’s order.  It appears the family court can force anyone with a federal pension to designate his or her spouse or child as the beneficiary of any survivor benefits plan.