Real Property, Trust and Estate Law Journal

ERISA Preemption of State Power of Attorney Laws and the Role of Powers of Attorney in ERISA Plan Administration

Kevin A. Wiggins

Kevin Allen Wiggins was an ERISA attorney in private practice in the Pittsburgh, Pennsylvania area at the time of his death on June 11, 2019. A graduate of Cornell Law School and the University of North Florida, he had over twenty years of legal experience in the employee benefits field and served on the United States Department of Labor ERISA Advisory Council from 2008 to 2010. He was actively involved with the ABA Real Property, Trust and Estate Law Employee Benefits and Executive Compensation Group. Prior to his legal career, he served in the United States Navy as an Arab linguist from 1989–1994. Mr. Wiggins is remembered and mourned by a host of family, friends, and professional colleagues. The Journal appreciates the assistance of Kevin’s fellow ERISA attorneys, Lori Oliphant, Karen Suhre, and Jessica Morrison, in finalizing this Article for posthumous publication.

Editor’s Synopsis: ERISA is a federal law that generally regulates employee welfare and retirement benefit plans. One of ERISA’s central purposes is to allow plan administrators to apply uniform laws of administration nationwide. In this Article, the relationship between ERISA and state power of attorney laws is examined, especially as it relates to clients of trust and estate attorneys. Specifically, the author seeks to address whether state law can compel a plan to accept the instructions of an attorney-in-fact.

The Article begins with overviews of powers of attorneys and ERISA preemption powers. It then addresses specific instances when ERISA completely preempts state powers of attorney laws and analyzes the potential effects of complete preemption. The Article then discusses policies that plans should adopt for accepting powers of attorney. The Article concludes that a participant’s use of a power of attorney to delegate investment discretion to someone who is not an investment manager as defined by ERISA would impermissibly conflict with ERISA, and that any state power of attorney law that would compel a plan to recognize such a delegation of authority is therefore pre-empted.

I. Introduction

The need to have another handle your affairs when you cannot is age-old. As early as 561 BC, Itti-Nabu-Balatu was empowered to act in business for his brother, Belkishir.1 Today in every state, principals can delegate their authority to another using a state-law power of attorney. The question this Article addresses is whether the Employee Retirement Income Security Act of 1974 (ERISA)2 preempts state power of attorney laws.3

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