“For Nokia employees, one of the most important steps after a major life event like divorce is confirming that retirement account beneficiary updates have been completed according to the plan’s required procedures, because following the process can help ensure your wishes are properly reflected,” –  Paul Bergeron, a representative of The Retirement Group, a division of Wealth Enhancement Group.  

“Nokia employees should remember that updating beneficiary designations involves more than expressing their intentions—it requires completing the retirement plan’s official process and confirming the changes have been accepted as part of a well-organized retirement strategy,” –  Tyson Mavar, a representative of The Retirement Group, a division of Wealth Enhancement Group.  

In this article we will discuss:

1. Why reviewing and updating retirement account beneficiary designations after a divorce is essential.

2. How a recent ERISA court case demonstrates the importance of following a retirement plan's beneficiary-change procedures.

3. Practical steps Nokia employees can take to  help make sure  their retirement assets are distributed according to their wishes.

Retirement accounts are among the most important assets for many Americans, and distributing those accounts between ex-spouses is a common part of divorce. For Nokia employees, reviewing beneficiary designations for any retirement assets you keep after a divorce is an important step. If you want to remove a former spouse as the beneficiary of your remaining retirement account, you must follow the procedures required by the retirement plan. Otherwise, the attempted update may not be effective.

A recent court case serves as an example of how failing to follow the proper procedures can prevent a beneficiary change from taking effect.

The Case's Facts

For more than thirty years, Carl Kleinfeldt participated in his employer's 401(k) plan. Like most employer-sponsored retirement plans, his 401(k) was governed by the Employee Retirement Income Security Act of 1974 (ERISA), meaning beneficiary changes had to comply with the plan's official documents.

While he was married, he named his wife, Dená Langdon, as the primary beneficiary of the account.

Following their divorce in September 2022, a portion of Kleinfeldt's 401(k) was awarded to Langdon as part of the divorce settlement. However, she remained listed as the primary beneficiary for the remaining balance. If she had been properly removed, Kleinfeldt's sisters, who were named as contingent beneficiaries, would have inherited the remaining portion of the account.

Shortly after the divorce, Kleinfeldt faxed a request to the plan's benefits department asking that his former spouse be removed from his 401(k), pension, life insurance, and other employee benefits. Although his written request clearly expressed his wishes, it was not enough by itself.

The Plan's Procedures Controlled the Outcome

Under the retirement plan's terms, participants could change their beneficiary designation online or by contacting the benefits center and completing the required process. Requests submitted outside of the plan's established procedures were not considered valid.

Although Langdon was no longer eligible for certain benefits, such as health insurance, she remained the beneficiary of the 401(k). Her status changed from 'spouse' to 'ex-spouse,' but she continued to be listed as the account's primary beneficiary. As a non-spouse beneficiary, she could inherit the account, although she generally would not have the same rollover options available to a surviving spouse.

After Kleinfeldt passed away in January 2023, the retirement plan followed the beneficiary designation on file and informed Langdon that she was entitled to receive the remaining account balance. Kleinfeldt's estate argued that the fax submitted after the divorce effectively removed her as beneficiary, but the plan denied that claim, leading to litigation.

The Court's Decision

The court acknowledged that Kleinfeldt clearly intended to remove his former spouse as beneficiary. However, under ERISA, intent alone was not enough.

The court examined whether Kleinfeldt had 'substantially complied' with the retirement plan's beneficiary-change requirements. Under that legal standard, a participant must both clearly communicate the intended change and closely follow the procedures established by the retirement plan.

Although Kleinfeldt successfully communicated his wishes, he failed to complete the required beneficiary-change process.

Why the Fax Was Not Enough

In previous cases, courts have found substantial compliance when participants used the proper beneficiary-change forms but made only minor mistakes, such as forgetting to sign or date a document. In those situations, participants generally followed the required process and provided the necessary paperwork to the plan administrator.

Kleinfeldt's case was different because he never attempted to use the plan's required beneficiary-change process. Since the retirement plan did not allow beneficiary changes by fax, his request did not comply with the procedures outlined in the plan documents.

The court also noted that the fax requested any forms needed to complete the beneficiary change. According to the court, this demonstrated that Kleinfeldt understood additional steps were necessary. Because he never completed those steps, the court concluded that he had not substantially complied with the plan's requirements.

The Outcome

At the time of Kleinfeldt's death, Langdon remained the primary beneficiary on file and inherited the account as the designated non-spouse beneficiary because the beneficiary designation had never been successfully updated.

The decision reinforces an important ERISA principle: retirement plan administrators are required to follow the written terms of the retirement plan, even when the outcome appears inconsistent with a participant's intentions. If the required procedures are not completed, plan administrators cannot rely on informal communications or attempt to interpret what a participant meant to accomplish.

Helpful Reminders for Retirement Account Owners

After a divorce, beneficiary designations for retirement accounts and other financial assets—including 401(k)s, 403(b)s, pensions, IRAs, annuities, and life insurance policies—should be reviewed carefully.

Nokia employees should remember that divorce agreements and other legal documents do not automatically update beneficiary designations, and divorce alone may not remove a former spouse as a beneficiary.

It is equally important to complete any beneficiary changes by following the exact procedures required by the retirement plan. A fax, letter, email, or language contained in a will or divorce agreement may express your wishes, but those documents may not be be sufficient if they do not satisfy the retirement plan's beneficiary-change requirements.

Finally, participants should verify that any requested changes have been successfully processed. Simply submitting a request is not enough if it does not meet the plan's standards. Obtaining confirmation that your beneficiary designation has been updated can  help reduce the chance of  unintended consequences.

How The Retirement Group Can Help

Retirement planning often involves much more than selecting investments. For Nokia employees, beneficiary designations, retirement plan rules, and major life events such as divorce can all play an important role in an overall retirement strategy. The Retirement Group helps individuals better understand these retirement planning considerations and navigate important financial decisions. To speak with a retirement planning professional, call The Retirement Group at (800) 900-5867.

Sources:

1. Antognoli, Anthony E. “Seventh Circuit Rules Attempted Retirement Plan Beneficiary Change Failed Substantial Compliance Test.”  Employment Law Observer , Hinshaw & Culbertson LLP, 9 Feb. 2026,  https://www.hinshawlaw.com/en/insights/blogs/employment-law-observer/seventh-circuit-rules-attempted-retirement-plan-beneficiary-change-failed-substantial-compliance-test.

2. Feuer, Albert.  Determining the Death Beneficiary Under an ERISA Plan and the Rights of Such a Beneficiary .  Tax Management Memorandum , vol. 54, no. 323, 26 Aug. 2013, SSRN,  https://papers.ssrn.com/sol3/Delivery.cfm/SSRN_ID2315889_code508291.pdf?abstractid=2315889&mirid=1 . Accessed 28 June 2026.

3. Packaging Corporation of America Thrift Plan for Hourly Employees v. Langdon, No. 25-1859, United States Court of Appeals for the Seventh Circuit. Justia Law, 2 Feb. 2026,  https://law.justia.com/cases/federal/appellate-courts/ca7/25-1859/25-1859-2026-02-02.html.

4. Spaulding, David M. “Beneficiary Designation Disputes: Post- Kennedy  Case Law Explores the Reach and Limits of the Plan Document Rule.”  Mondaq , 29 Sept. 2009,  https://www.mondaq.com/unitedstates/employment-litigation-tribunals/86778/beneficiary-designation-disputes-postkennedy-case-law-explores-the-reach-and-limits-of-the-plan-document-rule.

5. Zollars, Ed. “Seventh Circuit Clarifies Limits of Substantial Compliance Doctrine in ERISA Beneficiary Disputes: A Review of  Packaging Corporation of America Thrift Plan v. Langdon .”  Current Federal Tax Developments , 5 Feb. 2026,  https://www.currentfederaltaxdevelopments.com/blog/2026/2/5/seventh-circuit-clarifies-limits-of-substantial-compliance-doctrine-in-erisa-beneficiary-disputes-a-review-of-packaging-corporation-of-america-thrift-plan-v-langdon .