OCTOBER TERM, 1993
certiorari to the united states court of appeals for the second circuit
No. 92-1074. Argued October 12, 1993—Decided December 13, 1993
Petitioner John Hancock Mutual Life Insurance Company (Hancock) and respondent Harris Trust and Savings Bank (Harris), the current trustee of a corporation's retirement plan, are party to Group Annuity Contract No. 50 (GAC 50), an agreement of a type known as a "participating group annuity." Under such a contract, the insurer commingles with its general corporate assets deposits received to secure retiree benefits, and does not immediately apply those deposits to the purchase of annuities. During the life of the contract, however, amounts credited to the deposit account may be converted into a stream of guaranteed benefits for individual retirees. Funds in excess of those that have been so converted are referred to as "free funds." Dissatisfied over its inability to gain access to GAC 50's free funds, Harris filed this suit pursuant to, inter alia, the Employee Retirement Income Security Act of 1974 (ERISA), alleging that Hancock is managing "plan assets," and therefore is subject to ERISA's fiduciary standards in its administration of GAC 50. Hancock responded that its undertaking fits within the ERISA provision, 29 U. S. C. § 1101(b)(2)(B), that excludes from "plan assets" a "guaranteed benefit policy," defined as an insurance policy or contract "to the extent that [it] provides for benefits the amount of which is guaranteed by the insurer." The District Court granted Hancock summary judgment on the ERISA claims, holding that it was not a fiduciary with respect to any portion of GAC 50. Reversing in part, the Court of Appeals held that the "guaranteed benefit policy" exclusion did not cover the GAC 50 free funds, as to which Hancock provides no guarantee of benefit payments or fixed rates of return.
Held: Because the GAC 50 free funds are "plan assets," Hancock's actions in regard to their management and disposition must be judged against ERISA's fiduciary standards. Pp. 94-110. (a) The import of the pertinent ERISA provisions, read as a whole and in light of the statute's broad purpose of protecting retirement benefits, is reasonably clear. In contrast to other ERISA provisions creat-Page: Index Previous 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 Next
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