Just because you designate someone as your pension beneficiary does not mean they will be legally entitled to receive it after you pass. A recent case illustrates just how complicated things can get. Verizon Emp. Bens. Comm. v Nikolaros, No. 23-cv-1982, 2025 U.S. Dist. LEXIS 49340 (E.D. N.Y. Mar. 18, 2025). Here’s what happened.

Nick Nikolaros was born on October 13, 1970 and died on June 5, 2020 (at age 49). At the time of his death Nick was employed by Verizon and participated in its pension plan. In January 2001, Nick married Parthena Nikolaros and designated her as the primary beneficiary to the “pre-retirement survivor benefit” payable to a surviving spouse if he died before retiring. Simultaneous with this designation, Nick named his sister Georgia Nikolaros as the contingent beneficiary of his pre-retirement survivor benefit.

Nick and Parthena divorced on February 14, 2017. Nick never re-married and never made any other beneficiary designations. After Nick’s passing in 2020, Parthena (Nick’s ex-wife), Georgia (Nick’s sister),and Nick’s estate each claimed entitlement to Nick’s pre-retirement survivor benefit. Not wanting to pay the wrong person or party, Verizon filed an “interpleader” action with a New York federal district court asking it to determine who was entitled to Nick’s pre-retirement survivor benefit. In making that determination, the district court relied on the terms of the plan.

First, the district court observed that, under §7.1 of the plan, a participant’s election of a non-spouse beneficiary made before the participant attained age 35 becomes “null and void” as of the first day of the plan year the participant attains age 35. Because Nick designated his sister Georgia as a contingent beneficiary before he attained age 35 and never re-designated her between his 35th birthday and his death, the district court held that Georgia was not a beneficiary to Nick’s pre-retirement survivor benefits.

The district court next considered Parthena’s (the ex-wife’s) claim to the pre-retirement survivor benefits. Pursuant to §7.3 of the plan, a participant’s spouse ceases to be eligible to receive a death benefit when the spouse is divorced from the participant UNLESS a court enters a “qualified domestic relations order” (QDRO) to the contrary. Because there was no QDRO, the district court concluded that Parthena, too, was not a beneficiary to Nick’s pre-retirement survivor benefits. Given that Georgia and Parthena were not eligible beneficiaries under the terms of the plan, the district court held that Nick’s pre-retirement survivor benefits were payable solely to Nick’s estate.

Note: As a practical matter, if Nick’s sister Georgia is an heir to his estate, then she would receive a portion of any pre-retirement survivor benefits paid to his estate.

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