Cite as: 525 U. S. 432 (1999)
Syllabus
(b) Respondents' vested-benefits claim fails because the addition of the noncontributory structure did not affect the rights of pre-existing Plan participants. As members of a defined benefit plan, respondents have no interest in the Plan's surplus. While a defined contribution plan member is entitled to whatever assets are dedicated to his individual account, a defined benefit plan member is generally entitled to a fixed periodic payment from an unsegregated pool of assets. The employer funding a defined benefit plan typically bears the entire investment risk and must cover any underfunding. However, the employer may also reduce or suspend his contributions to an overfunded defined benefit plan. Given the employer's obligation to make up any shortfall, no member has a claim to any particular asset that composes a part of the plan's general asset pool. Instead, members have a nonforfeitable right to "accrued benefits," which by statute cannot be reduced below a particular member's contribution amount. Thus, a plan's actual investment experience does not affect members' statutory entitlement but instead reflects the employer's risk. Since a decline in the value of a plan's assets does not alter accrued benefits, members have no entitlement to share in a plan's surplus—even if it is partially attributable to the investment growth of their contributions. Hughes never deprived respondents of their accrued benefits. Thus, ERISA's vesting provision is not implicated. Pp. 438-441.
(c) Hughes also did not violate ERISA's anti-inurement provision, § 403(c)(1), by using surplus assets from the contributory structure for the added noncontributory structure. As its language makes clear, § 403(c)(1) focuses exclusively on whether fund assets were used to pay benefits to plan participants. Respondents neither allege that Hughes used assets for a purpose other than paying plan benefits, nor deny that Hughes satisfied its Plan and ERISA obligations to assure adequate funding for the Plan. ERISA gives an employer broad authority to amend a plan, Curtiss-Wright Corp. v. Schoonejongen, 514 U. S. 73, 78, and nowhere suggests that an amendment creating a new benefit structure creates a de facto second plan if the obligations continue to draw from the same single, unsegregated pool or fund of assets. Pp. 441-443.
(d) Respondents' three fiduciary duty claims are directly foreclosed by Spink's holding that without exception, "[p]lan sponsors who alter the terms of a plan do not fall into the category of fiduciaries." 517 U. S., at 890. Spink's reasoning applies regardless of whether the plan at issue is contributory, noncontributory, or any other type, for the statute's plain language makes no such distinction when defining fiduciary. See ERISA § 404(a). Even assuming that a sham transaction may implicate a fiduciary duty, the incidental benefits Hughes received from
433
Page: Index Previous 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 NextLast modified: October 4, 2007