Cite as: 510 U. S. 86 (1993)
Opinion of the Court
I
The parties refer to the contract at issue as Group Annuity Contract No. 50 (GAC 50). Initially, GAC 50 was a simple deferred annuity contract under which Sperry purchased from Hancock individual deferred annuities, at rates fixed by the contract, for employees eligible under the Sperry Retirement Plan.
Since its origination in 1941, however, GAC 50 has been transformed by amendments. By the time this litigation commenced, the contract included the following features. Assets and liabilities under GAC 50 were recorded (for bookkeeping purposes) in two accounts—the "Pension Administration Fund" recorded assets, and the "Liabilities of the Fund," liabilities. GAC 50 assets were not segregated, however; they were part of Hancock's pool of corporate funds, or general account, out of which Hancock pays its costs of operation and satisfies its obligations to policyholders and other creditors. See Agreed Statement of Facts ¶¶ 11-19, App. 85-86; Brief for Petitioner 7-9; see also McGill & Grubbs 492 (describing general accounts); id., at 552 (describing asset allocation under deposit administration contracts). Hancock agreed to allocate to GAC 50's Pension Administration Fund a pro rata portion of the investment gains and losses attributable to Hancock's general account assets, Agreed Statement of Facts ¶ 11, App. 85, and also guaranteed that the Pension Administration Fund would not fall below its January 1, 1968, level, Agreed Statement of Facts ¶ 27, id., at 88.
GAC 50 provided for conversion of the Pension Administration Fund into retirement benefits for Sperry employees in this way. Upon request of the Sperry Plan Administrator, Hancock would guarantee full payment of all benefits to which a designated Sperry retiree was entitled; attendant liability would then be recorded by adding an amount, set by
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