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Beneficiary disputes

Federal Benefit Programs: ERISA, FEGLI, and SGLI

When a life insurance policy or retirement benefit comes from an employer plan, the federal government, or military service, federal law usually decides who gets paid. Those rules often favor the beneficiary on file more strongly than state law does.

By

On this page
  1. At a glance
  2. ERISA employer plans
  3. FEGLI
  4. SGLI and VGLI
  5. Thrift Savings Plan
  6. Federal court
  7. Related

At a glance

Program Covers Who is paid first Key point
ERISA plans Most private employer life insurance, 401(k), and pension plans The beneficiary under the plan documents Plan documents rule; broad preemption of state law
FEGLI Federal civilian employees and annuitants Beneficiary in a signed, witnessed writing received before death Wills and unfiled documents have no effect
SGLI and VGLI Servicemembers and veterans Beneficiary designated in a writing received before death Federal designation overrides state decrees
Thrift Savings Plan Federal employees’ retirement savings Named beneficiary State-law claims against the recipient held preempted in one circuit

ERISA employer plans

ERISA’s provisions “shall supersede any and all State laws insofar as they may now or hereafter relate to any employee benefit plan” covered by the Act, subject to listed exceptions.1 The Supreme Court has applied this to state divorce-revocation statutes (Egelhoff) and community property claims (Boggs), and held that administrators may pay according to the plan documents (Kennedy). See retirement accounts and key decisions.

ERISA plans must also have a claims procedure. A denial notice is generally due within 90 days after the claim, with one extension available in special circumstances.2 Plans often interplead when they cannot resolve competing claims themselves.

The plan’s own terms also decide who is next in line when no beneficiary was named. In Zaharopoulos v. Taylor (M.D. Ga. 2023), a plan paid a “spouse or domestic partner” first, but one way to qualify required a declaration signed by the employee. There was no evidence the insured had signed one, so her fiancé did not qualify, and the benefit went to her son.3 See the decision summary.

Jones v. Prudential (W.D. Wis. 2025) is similar. An employee named no beneficiary, and the plan paid first a “surviving spouse or domestic partner,” then children. Her roommate claimed as a domestic partner. The court noted that Wisconsin does not recognize different-sex domestic partnerships under Wis. Stat. § 770.05(5) and held that the evidence did not meet the plan’s other definition, so the employee’s only child took the benefit.4 See the decision summary.

FEGLI

The Federal Employees’ Group Life Insurance Act pays proceeds “in the following order of precedence”: first to the beneficiary designated “in a signed and witnessed writing received before death” in the employing office (or OPM for annuitants and certain others); then the widow or widower; then children and descendants of deceased children; then parents; then the executor or administrator; then next of kin.5

The statute adds: “a designation, change, or cancellation of beneficiary in a will or other document not so executed and filed has no force or effect.”5 A court decree of divorce, annulment, or legal separation, or a related order or settlement, can direct payment to someone else only if it was received before death as the statute requires.5 In Hillman, the Supreme Court held a state law allowing recovery from a named former spouse preempted.6

When a claimant relies on other documents

In a Texas complaint, the insurer that administers the program alleged that a retired federal employee’s last designation on file, from 2005, named her daughter and son as equal beneficiaries. After her death, a man who said he had been her common-law husband since 2003 claimed the benefit. He sent a journal note, a joint bank statement, a change-of-address order and 2011 beneficiary forms for her retirement and unpaid-compensation benefits, which named him and described him as her “boyfriend.” He also sent affidavits in which the son and daughter said they had been “falsely listed” as beneficiaries. The insurer alleged that the affidavits appeared to rest on misinformation, since both had been properly designated. If they had validly disclaimed, the next category under the statute would be a widow or widower, but the insurer said it could not tell whether the couple had been married. It also named a funeral home that might hold an assignment of part of the proceeds.7 complaint (PDF)

When the employer cannot find the form

What “received” means came up in MetLife v. Vasquez. A federal employee had named his mother on a 2007 form. In 2013, before deploying overseas, he signed and had witnessed a new form naming his wife; his supervisor said he watched the employee copy it and hand it to the Human Resources officer on duty at his facility. After his death the Defense Department found only the 2007 form in his personnel file and could not locate the 2013 form. The insurer that administers the program denied the widow’s claims, and later filed an interpleader.8

The district court held that a form not found in the personnel file “must then bear some indicia of the receipt,” such as a signature or stamp from the receiving office, and that “without any indicia of receipt by the appropriate office, mere delivery alone is insufficient.” It granted summary judgment to the mother.9 The Fifth Circuit reversed:8

  • Receipt is delivery to the right person. Relying on Coomer v. United States, 471 F.2d 1, 5 (5th Cir. 1973), which interpreted the parallel servicemembers’ statute, the court held that “received” “does not require that the beneficiary designation form bear some indicia of receipt or be present in an insured’s personnel file,” and that a form is “received” for purposes of FEGLIA “when an insured individual hands the form to an appropriate person at the insured’s employing office” (slip op. at 6). What happens to a form after that, quoting Coomer, “cannot vitiate the validly expressed intent of the insured” (at 6).
  • Testimony can be enough to get to trial. “Evidence of receipt may take various forms, including witness testimony” (at 7). Attacks on the supervisor’s “decade-old testimony” were credibility attacks, and credibility is not decided at summary judgment (at 7–8). The evidence did not entitle the widow to summary judgment, but it created a genuine dispute for trial (at 8).
  • One question left open. The court did not decide whether handing the form to the Human Resources official on duty at that facility met the requirement that it be received in the “employing office”; that factual issue was left for the district court (at 8 n.4).

The opinion is unpublished, so under the Fifth Circuit’s rules it is not binding precedent,10 though the First Circuit has called its holding “instructive” in a FEGLI case about a form an agency received and then returned unprocessed.11 After remand the claimants settled, and the district court dismissed all claims with prejudice in January 2026.12 For a claimant whose form is missing, the practical lesson is to gather evidence of delivery early: copies, who witnessed the signing, who took the form, and when.

SGLI and VGLI

SGLI proceeds are paid “in the following order of precedence,” beginning with the beneficiary designated “by a writing received prior to death” in the uniformed services, or in the program’s administrative office for those who have separated or are covered by VGLI. A similar fallback order follows.13 In Ridgway, the Supreme Court held that a servicemember’s federal designation prevailed over a constructive trust imposed under a state divorce decree.14

The form itself can be ambiguous. In a Georgia complaint, the insurer alleged that a veteran’s 2015 VGLI form named three primary beneficiaries for a total of 60% of the benefit and three contingent beneficiaries for the other 40%, with no primary beneficiary for that 40%. If the form meant all six to share, each had a claim. If only the primary beneficiaries were meant to take, his three children, who were the primary beneficiaries, still had claims. His former wife, a contingent beneficiary on the 2015 form, argued that because it was unclear it should be disregarded in favor of his 1992 designation, which split the benefit between her and a daughter.15 complaint (PDF)

In Mays v. Prudential (D. Colo.), an SGLI case, the claimants disputed whether an earlier or a later designation controlled. The minor beneficiary’s mother said she would accept a division based on the earlier designation, and the court noted that “any settlement should be approved by the court given that [the beneficiary] is a minor.” Because the mother’s and child’s interests conflicted, the parties agreed a guardian ad litem was needed, and the court appointed one. The court later granted interpleader relief, and it approved the minor’s settlement in May 2020.16 See minor beneficiaries.

Thrift Savings Plan

The Tenth Circuit applied Hillman’s reasoning to hold state-law claims against the named recipient of TSP funds preempted.17 Other circuits may not have addressed the issue the same way.

Federal court

Disputes over these programs are often heard in federal court because the claims arise under federal law, or because an insurer files a federal interpleader. See statutory versus Rule 22 interpleader.

Footnotes

  1. 29 U.S.C. § 1144(a). Cornell LII. ↩

  2. 29 C.F.R. § 2560.503-1(f)(1). eCFR. ↩

  3. Zaharopoulos v. Taylor, No. 5:22-cv-348 (MTT) (M.D. Ga.): order, ECF No. 43 (Sept. 6, 2023), govinfo.gov (PDF); disbursement order, ECF No. 46 (Oct. 17, 2023); judgment, ECF No. 47 (Jan. 4, 2024), court judgment (PDF). ↩

  4. Jones v. Prudential Ins. Co. of America, No. 3:24-cv-00214-wmc (W.D. Wis.), opinion and order, ECF No. 36 (Apr. 16, 2025), at 2–5, court order (PDF); judgment, ECF No. 37 (Apr. 25, 2025), court judgment (PDF); interpleader and discharge order, ECF No. 21 (Oct. 18, 2024). ↩

  5. 5 U.S.C. § 8705(a), (e). Cornell LII. ↩ ↩2 ↩3

  6. Hillman v. Maretta, 569 U.S. 483 (2013). Cornell LII. ↩

  7. Complaint in Interpleader ¶¶ 8–21, Metropolitan Life Insurance Co. v. Banks, No. 4:16-cv-00788 (N.D. Tex. filed Aug. 22, 2016), ECF No. 1. Allegations only. ↩

  8. Metropolitan Life Ins. Co. v. Vasquez, No. 24-11024, 2025 WL 2795055 (5th Cir. Oct. 1, 2025) (per curiam) (unpublished), slip op. at 1–8 & n.4, opinion as filed in the district court (PDF); judgment (PDF). ↩ ↩2

  9. Metropolitan Life Ins. Co. v. Vasquez, No. 4:24-cv-00009-BJ (N.D. Tex. Oct. 22, 2024), ECF No. 32 (memorandum opinion and order), at 13, 17, court order (PDF). ↩

  10. 5th Cir. R. 47.5.4. Fifth Circuit General Docket Order No. 2022-4 (PDF). ↩

  11. Hebert v. Donahue, No. 24-1951, slip op. at 23 (1st Cir. Feb. 5, 2026). Opinion (PDF), GovInfo. ↩

  12. Metropolitan Life Ins. Co. v. Vasquez, No. 4:24-cv-00009-BJ (N.D. Tex. Jan. 26, 2026), ECF No. 46 (final judgment), court judgment (PDF). ↩

  13. 38 U.S.C. § 1970(a). Cornell LII. ↩

  14. Ridgway v. Ridgway, 454 U.S. 46 (1981). Cornell LII. ↩

  15. Complaint in Interpleader ¶¶ 15–23, Prudential Insurance Co. of America v. Monroe, No. 4:17-cv-00104 (M.D. Ga. filed May 17, 2017), ECF No. 1. Allegations only. ↩

  16. Mays v. Prudential Ins. Co. of America, No. 1:19-cv-00831-CMA-KMT (D. Colo.): courtroom minutes, ECF No. 37 (Sept. 4, 2019); courtroom minutes, ECF No. 39 (Sept. 13, 2019); order appointing guardian ad litem, ECF No. 46 (Sept. 25, 2019) (cited by docket number); order for interpleader relief, ECF No. 68 (Feb. 19, 2020); order approving the minor’s settlement, ECF No. 71 (May 12, 2020) (cited by docket number). ↩

  17. Evans v. Diamond, 957 F.3d 1098 (10th Cir. 2020). ↩