granted in the court below on two issues that have been presented the first is whether the plan at issue in this case the so called safe flight plan is in a risk of plan under section two  a two of the arrests are statute and secondarily if the court determines that it isn't a recipe plan under that section whether it is a bonus plan and therefore falls outside of the scope of a r under the department of labor regulation twenty nine c f r two five zero one dot to dash three we're here on a day novo review of the court's grant of summary judgment i would like to point out that this is an issue of first impression with respect to the determination of whether safelight plan or plans like it are  should be covered by a recess the fundamental issue in this case is whether plans that allow and contemplate for in service distributions qualify under this subsection of a recipe the only court that has gone in the opposite direction or that has addressed the issue and found the plan to be an iris a plan is the fifth circuit decision and tolbert as an overarching point this court has acknowledged that resort creates a uniform regulatory scheme over employee benefits that's designed to protect the fisheries and provide employers with uniform national standards are planted  interpreted in whether a plant is covered by a reserve there are three elements to consider the first is the plain language of the statute the second is the plain language of the plan itself and also the surrounding circumstances are a given affect this court and therefore i'd like to start just from the plain language of the plan itself in this case there is no dispute the facts in this case a version of forward there's no dispute that this plan was created in order to allow the distribution of proceeds from a transaction incentive plan that existed that safe i created for a series of executives that was designed in order to encourage them to sell the company and so this plan was designed to allow them to take those bonus incentives and defer some of the compensation so that they did not realize it all in the first year of  first year that they were due the money there was no requirement that they defer until their terminations and they could write they could defer until terminations that is correct and so can i take you to the first element i'm sorry sir in your three things to look at so let's assume they could do for until terminations the language in the statute says results in the  in the way i read it now you should tell me if i'm wrong i read it as modifying the deferral of ink and then i read for periods extending to determination or beyond and when extending to is used in the u s code we look at every use of extending to in the u s code it either means includes or it means like extending the credit so it's not credit here so tell me why i am wrong in thinking this results in the and it extends to terminations under the term plain language of the plan sir and the the you are correct in the sense that money that is placed in the safelight plan does get deferred by default to some period the question is and actually by default it is defer to terminations however the individual participants are allowed to receive that before so when you read that language of results in there's no i mean that's true so your opponent points out in their brief that that's even true in for a one k's i mean you can always so why doesn't your reading jeopardize case it does not jeopardize for one case one because for one case have their own regime of when and how you are allowed to withdraw money from your four one k this idea that the bets where i struggle because i don't see that exception in the stack in the language of section to be resisted go ahead on this and that's where i believe no court has actually looked at the remainder of section  two to a which i think is very important sort of illustrates what the deferrals are meant to accomplish here and so the language right after subsections one in two states that a distribution from a planned fund or program shall not be treated separated from employment the way i read that limiting statement is that it is clarify that with respect to subsections one and two if you make a payment to someone who is in your employment but they have reached sixty two that is ok under reserve if to work to allow in service distributions as safelight has argued would essentially read out that entire section you wouldn't need it it's because you would be wouldn't it why can't that be a clarifying addition ricin is a fairly intricate statute and sixty two is a known and recognized timeframe  and in some plans it's a timeframe from which calculations are what i'm struggling with is the core concept of arrests which is that that someone restore wants to designate is a fiduciary is using or holding or in charge of other people's money in the goal of her is is to say we have this blog coverage when you have someone else's money we are going to say you are a fiduciary and you must take care of that money in isn't this exactly that situation  exemption and you're going to be saying if you're in that site harbor but first you come in the front door first you have to be governed first there has to be a fiduciary and so we don't even have to reach the rarely raised in the reason that this would be only the second circuit court to your expressly reach this point is exactly because i believe that the concern that your honor has is just not one that ordinarily arises because this type of issue this issue with respect to in service distributions ordinarily or only would apply and situations such as this where you have a relatively limited number of planned participants this is error and there are a number of clients that fall under a recess where there's the opportunity for in service distributions and i think the other thing that strikes me is the importance  based on the fact that i can say i want some of my money earlier judge the power wants his in ten years judge rogers wants his overtime and beyond his retirement because if you do that it is an absolute in and administer a ball act so what is so special about this act that it would he enjoy on what participants choose to do with your i don't believe that it necessarily does i believe that you can look at the plain language both of the statute and of the plan itself and in circumstances in which the plan allows for distributions before the age of sixty two that are inside service it does not fit within the plain language of the statute had  required to be two does not say two is about an end result it results in the deferral of income for periods extending to not for a period of terminations but for a period extending to terminations what else could that language claque tickling maine but the end result includes naomi and like amounts that are regularly paid the way that individuals are usually paid section two allows for individuals to take whatever amount is in their pension plan as a lump sum upon terminations or in periodic installments directs itself to two typically different forms of long term payments or long held money one is retirement income you get it after you retire the other is a methodology that allows you to have an income that results over a time period that extends to the terminations tell me again why vat is not completely distinct from what you and i would normatively think of as retirement income because you are first of all i believe the practical effect of allowing the payments to be made  from any deferral until terminations an effect of lee sweeps in any deferred compensation plan whatsoever into a risk and i don't believe that that is the intent and i don't believe that's the understanding that all deferred compensation plans are  plans are governed by this section and so therefore i believe that it really just allows the individual to make a determination which you can often see in terms of buy pensions from large companies you have to make a anything but you have to fill up that form every year you have to make the election for whether you want the distribution in the next year or at some point in the future that is correct but as i was and i believe that that is the fundamental distinction and it's one that is pretty common which is allowing the individual to take their pension benefit either in a lump sum or as you know income or if they would like to you know take it over a period of years but not as income necessarily so twenty five percent at the terminations twenty five percent in your want twenty five percent year to in the final word is in your thread if in this group you had a group of plan participants and at the beginning of the planning for the first eight years of the plan everybody said no money till after our retire and then in the ninth year one person says i want some money i really wasn't qualified before and now it's no longer  e you are i do not believe that there is a sup me that there is a change in or that there would be a change in this plan as a result necessarily of an individual's actions or behavior i don't want to suggest that argument is that an individual can somehow by their individual action take that it's because it could have happened right the language allows for it to happen that's the fundamental issue not that someone did or did not we believe that the any time so your position is in interpretating this this really governing provision of arrests anytime someone can take money earlier than retirement carves out and that's a pretty sweeping interpretation of a recess when you are i believe this is the first time that the question of in service in distributions under this subsection has been raised and i don't believe that sort of just a plain reading of the statute along with the exception that the statute provides or what causes a different result is to be clear you're saying that if the plan permits removal taking it out early then it's not a resupply and even if a lot of stuff is designed to be taken out later it's just here's a plan we'll hold it for you any time you want to take it out you can take it out under the flow people can take it out after one year while they're still working people can take it out after three years while they're still working people can wait to look to late retire and then take it out or they can take it out later you're district court made but it's still kind of parade of horror and still it still seems like a a a potential cutting of risks of protections because if a company doesn't want to have a risk ply to its plan it just instead of saying you get it upon retirement or you get it after retirement it can say you get it you can take it out earlier if you want that will screw up your tax planning but that's that's not the issue the issue is just what what the document says right so if it says that is isn't that kind of an extreme interpretation of i don't believe in tenth of  don't believe so your honor because especially under the terms that we are you know faced with a plan such as this it's not about your argument is broader than just what this one has you brought your argument that you've just stated is as long as there's an option to take it out early whenever you want which i guess there's tax reasons why you would never do that but there's no other reason why you couldn't do that there's no reason in employment law you couldn't just say here's money will give it to you whenever you want it in the meantime we'll keep it but i think that would not those categorically would not be a risk of plans under your theory but pension plans because your honor i do not believe that income by itself is sufficient to create interest of players and i believe that those are two sides of the same coin understand that i'm going to ask him the on the other side the opposite extreme argument because i mean it  i mean isn't it isn't it a gigantic loophole ok here's my other question if i might judge strand talks about the protections of or is what the purposes of it are but here if i'm understanding it correctly you're representing the plain it right this wrong and you're wanting a recession not to apply yes you're here and the other side is representing the defendant and they're wanting a receipt to apply so i'm wondering what the underlying reason is for this particular and indeed obviously their discussions with my client i would obviously be privileged but just as a general matter is we were discussing you know earlier to the extent that a court would categorize this as a top happy play and there are fewer protections for top players than there are for ordinary arisa plans and therefore you're worried that if you or someone in your situation might be worried i don't want you to get into what your actual clients care about but someone in your situation might actually be concerned that if the risk applies it'll come into some statutory exception and that will give you fewer rights than if you just assume under your contract that is a potential  broader but i believe them that unite you know i think is generally a fair question for me to ask in these cases what are you what are you trying to preserve for what are the stakes i'm having trouble seeing what the stakes are but we believe that the common law cause of action with respect to the ok one other question under the interpretation that you propose what happens to all the pension plans that allow an early withdrawal from pension which so many of them do for emergency circumstances that's a deferral and and the distribution prior to retirement with all of those without exception also benefit plan doesn't pay you money it provides you coverage this is a pension plan issue and most pension plans authorize an early withdrawal in the ninety's circumstances most of which are  a general principle what we're talking about here is just situations or plans in which early or or in service withdrawals are allowed all by themselves there may be other circumstances under which either the department of labor or others would interpret or allow for certain distributions which i believe are somewhat outside of the scope of just the issue of whether a plan that only allows for the distribution you know in service without anything more can come in and for example there have been attempts  risk you know plans have tried to fit the the distribution or any sort of in service which role at least as far as i've been able to determine as you know as retirement income which i was a little bit different than  question was but i believe that the issue of the in service distributions for the other purposes has just not been raised i have not seen cases in the new grades and you would be in a add to your argument a dividing line that is based on whether there is a conditional distribution versus whether there is a choice where you are i would have to those facts i believe would necessarily require they're looking at the particular plan and that's where i believe some of these issues of surrounding circumstances etc may come in but for purposes of just the bright line rule which i know as we've discussed and as your honor has said there is a a desire  for clarity for you know for purposes of determining whether or not a plan falls within the reason i believe that just as a matter of the language of the statute and the as a whole inservice distributions are not allowed to pinch and benefit plans thank you n we submit that section three to a which is one of a risk is most fundamental concepts and the jumping off point for the statutory scheme itself certainly so far as pension plans are concerned is broadly worded and intentionally so as illustrated by the repeated use of the destructive or in the statutory text and that key phrases such as for periods extending to the terminations of covered employment or beyond as judge par pointed out previously and by its express terms have significant meaning and cannot be conveniently glossed over why isn't this a bonus plan i mean why isn't this a bonus plan the whole purpose of the plan was to give to incentivize four employees to sell the company and give them a bonus and it had nothing to do with retirement it had to do with deferring taxes and avoiding the tax points of taking the money right away but just the part there are really were two plans involved here there was the so called transaction incentive plan right that which the board put set up in two thousand and five to provide incentive for the management team to maximize the value of the company and find a strategic buyer only to pay the most for the company and then there was the second plan which was put in place at the end of two thousand and six after the buyer had been found and the definitive agreement had been put in place but in the three would mean the whole point of the deferral was not to create a pension or retirement but rather was to protect these high level employees from the tax consequences of this it was certainly to protect them from the tax cons and the immediate tax consequences of closing but its purpose was to allow them to defer for almost an indefinite period that election first of all the default election was to pay sixty days after terminations of employment but then the individual could elect under section five point one b either set a fixed period of time it could be one year it could be five years it could be ten years or to take it in installments over a period of up to ten years and one of the things called the factual context here was the fact that when the plan was adopted in december twenty ninth of two thousand and six by the board they already had found a buyer the buyer was a strategic buyer will run out of brussels and it was expected that because there was a which is the reason they got the price they got was likely going to decapitate the management was going to dismiss the management once they took over once they close i point that's the reason you have this deferral and this terminations language is because of exactly that it has nothing to do with retirement and so if the primary purpose of the plan is the to plan is to give them bonus and the deferral plan is to defer the tax consequences then i mean why shouldn't we look at what this plan really is which is together it's a bonus plan and dillingham itself says you can look at the source of funding which could be an external plan but i would suggest to you that when you look at the plan in the context of the transactions in the context of the fact it actually was to provide an opportunity to defer into retirement and by retirement i mean after terminations of employment from safelight and there's a there's a kind of a conceit here involved in characterizing section zero one b s kind of fixed period of time as permitting in service withdrawals but actually you could argue that it was to postpone distributions way beyond the expected terminations of employment consider this ever because they anticipated being terminated upon the sale and consummation or within perhaps a period of months thereafter so the default auctions say ok here's the here's here's the history they find a buyer they put the sale of the company under definitive agreement the fall of two thousand  all of a sudden the management team brings to the boards attention a new deferred comp plan that is designed to defer payment of the expected bonuses if the deal closes in two thousand and seven the default option was to pay in sixty days following terminations of employment so if in fact the buyer closes in april of two thousand and seven and comes in and immediately pink slips all the management team if they go with the default provision they're going to get it in two thousand and seven in the same tax year that they were going to get it anyway so the whole point of two thousand and five point zero one b which allow them to kick it downstream it wasn't an in service provision it was actually a further deferral position to be on what was likely to be a terminations of employment provision so they could they could not take in two thousand and seven i could say i could postpone for five years and get it in two thousand and twelve way beyond so how does they could characterize is an in service provision book my point is that the whole if you look at the primary purpose so the primary purpose of the plan here was purely i don't think anyone is disputing it to avoid taxes it wasn't to set up some retirement system for these high level executives so why should they get the protections of arista now i agree with  rogers this is a bizarre case in some sense because they don't want the protections and you want to have it in and i guess i should ask the judge rogers question which is why i mean why do you want them to have the protections of may not want to what's going on here that our perception of the situation is this we believe that a rescission apply because that was the whole point of setting up this planet in six pressley embraces the result so as far as our clients concerned it was certainty of outcomes it was you set up on a recent plan and that's the way the remedy is that you get your benefit and you get your attorney's fees are fixed successful but you get your benefit you get the benefit you bargain you get you get paid and that's a substantial protection for employees but i believe that what appellant seeks here is he would like to have this rather play out under state law because he believes that the remedy section gives him perhaps the right to a broader definition of damages that may sweep into the tax sanctions to some of the other issues that he seeks to recover on so that's exactly like exactly and with a recognizes that there are certain plans that are not covered primarily those that if they had flown into an actual retirement plan would no longer be tax qualified because their i think we believe further reinforces our point about how a recession three to switch broadly and as you pointed out just strange sweeps in all manners of plans through the disjunctive and then leaves it to section four b to completely exempt out certain things like workers comp plans foreign plans governmental and church plans and then leaves further to sections one zero one two zero one three zero one and fo to selectively exempt out from some of our business protections like participation vesting and eligibility certain plans like top hat plans and for that matter another one that i believe proves our point which is for one case iras to take it out early there are conditions upon which you can take it out early whereas this one doesn't happen in conditions and so what he said is that it and i simplified would he said much more eloquently but is the distinction is that those are conditional takeouts here you can take it out at liberty why isn't that something we should pay attention to because those kinds of plans have been around since before rescind before congress wrote the statute thousand seventy four and seventy three when congress put together this language and put section three point two on the books which notably by the way was before the age sixty two rule which is that in two thousand and six of the pension protection act to do with early retirement programs that employers were put into place or being encouraged to put into place but back in the day in one hundred seventy four some of the plans that congress basically knew were out there were so called savings profit sharing of thrift plans they did have for one key features because foreign cake came along in ten thousand seventy eight of the seventy eight revenue act but back in the day there were profit sharing thrift plans and the iras had a twenty year history leading up to that point first articulated revenue roll fifty four to thirty one sixty eight twenty four revenue rose seventy one dish to ninety five and revenue rule seventy one dish to twenty four that said you could have a tax qualified profit sharing or thrift plan and all you had to do was to leave the employer contributions in the plan for a minimum of two years there were tax actions there was no can't take it out prior to fifty nine and a half there was no ten percent penalty the section seventy two penalty for early withdrawal came along decades later but back in the day all you had to have you could set up a qualified profit sharing or thrift plan and employees could take that money out in a strictly if the plan would allow it to take out in two years three years five years heck in hundred one i put together a profit sharing plan for a corporate client and it basically is provided for three year class festing another being swept away by the one nine hundred eighty six tax reform act but the point was people would routinely carr those contributions for maybe three years or five years and then systematically when they vested in those contributions they pull them out there was no ten percent penalty there was the shalt not or they have hardship they were to me put them in a reception in congress knew those kinds of plans were out there in corporate america when they put this language on the books in one nine hundred seventy four so i take exception to the idea that you know there's all these restrictions on so you have back then i understand you correctly then in the hypothetical you could have a plan where people just had a choice of let's say the company says up to fifty thousand dollars we'll pay you and if if if you get more than that you can take it now or you can take it any time later you would say that's that that sounds like the one you're describing is that you know you can you can leave the money with the employer he can reinvest for you or not and pay you later maybe you have a well the sly they might do that but you describe something which is sort of similar to well there's a little more to do is that will rogers in the sense that and this gets back to this issue of qualified plans versus non qualified plans qualified plans have to be funded and and they have to have tax exemptions to protect against people being taxed on money being put away for their benefit and qualified plans also have to be kind of broadly based and have to adhere to a number of different provisions which kind of i don't interrupt your answer completely i want to have an understanding of the overarching issue again is that the goal was to get it wasn't wasn't that in doesn't this apply here that the goal was to draw all these plans in because not only was the wild west existing before seventy four as far as how people could use put money in take it out three years later the real problem was that people were putting money into draw all of those various plans in so that you can then say you can't cliff they asked when somebody is ready to retire and get rid of an earlier you have to invest over certain time flying and you have to step  and the and and you have to do this to be qualified and to be qualified you've got to be qualified because you got to get the tax part but the bottom line of all of those plans ias you don't want somebody handling other people's money unsupervised so the goal was to bring it all into arista and then a receipt does decide top it may not get the protections you know you can have you could have all these rules along the way i must struggle is to understand how we can articulate a rule that protects that cold war concept that that people who take this money cannot throw it away without incurring personal fiduciary liability because that's what protects the people who are normally recipients and no where in a little different situation here likely i think because it's a top hat issue and you lose some of the cl that you might otherwise have read but we're not talking about just a top hat claim here that's really beside the point the point is how does a restore war right and so that's the question that's the circumstances either one provides retirement income we would submit that if you were looking at roman at a roman at one rather it's beyond just pensions that paid monthly for life but that retirement income is income that you can use later after you've terminated employment stick in an ira or are spent at that point in time or double roman and that results in the systematic different of income to the periods including determination of employment or beyond so  was not his fault we have a lot of questions i'm sure this is this is will this brief on page eighteen i'm looking at talking about whether the simple possibility of standing alone is sufficient and it sounds like your argument is that the simple possibility of deferral standing alone is sufficient to put whatever causes that later rather than to pay you now look it up though nothing no nothing about terminations maybe it only lasts for three years we will pay you now for this particular income that you're getting or if you want we can pay you in one year or we can pay you in two years or we can pay you in three years i don't know why they would do that but it seems like they ought to be able to do that without triggering a risk but you would say it does trigger a recess is no right believe that i believe that the  short term deferral of payment that under the circumstances when promised to a group of people where clearly they all or substantially all of them barring the inconceivable like death or an early termination of an isolated individual would pay out certainly while their employer while they all were still employed would not constitute an employee pension benefit plan subject to a recess and we don't believe that the statute requires that result work for you square it with all of your arguments today we have not we have heard of like we have talked about with respect your honor we have talked about how section three to a double i results in but the for all of income two periods including the terminations of employment or beyond and if in fact you're talking about making a promise to a roomful of thirty two year olds the young people in your description in your hypothetical where payment would be postponed for a couple years maybe even three years where they'll all be in their mid thirty's and likely all still employed by the same company making the promise that that would not rise to the level of a deferral of compensation t is it bears remembering how this promise came to be made to whom it was made and what the like weak outcome was i e this was an end of the year two thousand and six plan put into  for group a small group of executives who expected to close on the deal in april of two thousand and seven about three four months later knowing that they were selling to a strategic buyer who is likely to pink slip all of them either immediately or soon thereafter and it provided them with an opportunity to either get paid sixty days later which would accomplish nothing or big or to make an election to get paid years later which of countless something i e section five point  was designed to give them a period where they could be sure to defer to a period beyond terminations of employment it's a it's a thoughtful and it wasn't an in service provides the response here's my concern is that we're not you're not asking for a bright line rule you're just saying on the backs where we have fact you just listed them back one two three and four this is but this is not an or is a program but it or i'm sorry that it is the program but if you change the facts a little or maybe a lot it might not do so what you're asking us in effect to do is to have a it's not to have a bright line rule but  guess i would suggest that there is danger in going too much in the other direction and it creates sort of slippery slopes that just rant was pointed out previously which is it provides an opportunity for mischievous individuals to create short term plans and avoid a receipt generally the parade of horribles what we came up with while we were conceptualizing the brief included a situation where in a purpose set up before one k plan to take everybody's money for a couple  years with the idea that arista would apply discover to their horror that the guy hired his brother in law to manage the assets he screwed them up in no after the lawsuit got filed somebody gets the bright idea that since everybody is covered by the plan is still employed if you just terminate the plan and give the money to them while they're still employed maybe you get out of the arista claims i mean understand i'm just so i'm just trying to find out what you're suggesting the mind should be in the mind apparently is not just a clear bright line it is the line is that you're suggesting to us is a nuanced fact laden line that looks that all the kinds of things that you just listed were present in some hypothetical that are present here right and i think i think it is a fact based line because i think and i think this is why the language of bias expressed terms has meaning in that statute that we're debating today which is the four factor tenets that courts commonly use when they're wondering whether or not a plan is a plan under done versus cunningham which this court has embraced subsequently by you can ascertain the source of payments the  benefits the class of eligible individuals how to apply for them all of that goes back to when the parties a stamp bush plan it should play out based on the reasonable expectations of what they've set up for themselves in this particular case this plan embraces a risk there was no secret it talks about federal law and everything else and all we're saying just started with yes i was just asking whether there was a clear line here that you were asking us to draw that if there's a possibility of deferral going beyond retirement that riseth covers seems to me your answer is now pretty clearly that that's not what you're asking us to know you're asking that that contextual line has now been around for a good forty five years and speed will soon be able to work with it ok one of the reasons i think that this is a case of first impression or at least be characterized as such by the palin is because people seem to be pretty comfortable with how that lying worked in practice until somebody decided to take a run at it today thank you  ana just a few follow up points yours with respect to the the taggers ation of profit sharing plans amends a recent plans which my colleague was discussing earlier there is and there has been a series of cases recently that have looked at attempts to create profit sharing plans that courts other circuits have expressively rejected as a recent plans that is  another issue that we were discussing before was this concept of what does terminations beyond mean as opposed to the retirement income and i believe that if  that is where we have to look at the plain language of income as opposed to beyond so in other words the reading that you're beyond is is  something other than the lumpy payments that we were discussing earlier i think would be undermined by the fact that section one author automatically sweeps in plans that provide retirement income so in other words suggestion which i made earlier is that either you get paid in the same way you are usually paid when your employer or you take it out in lump sums but not necessarily one lump sum understanding is that the plans that you are concerned about would be for a one k plans because those are the plans that i am aware of that allow for hardship withdrawals and not the only plans there is yet another statutory and regulatory regime that governs those which and we are very familiar with the requirements of the four a one k which is why i believe the suggestion is fall into that in order to i'm struggling with i'm struggling with the concept that you're presenting because so much of the regulation grows as a result of a ressa so you are in the p and now you have the regulatory requirement some of which exempted i see those as further exceptions your honor a lot like the exception that is provided in the statute itself that allows for these withdrawals at sixty two that does not categorize a withdrawal at sixty two as either retirement or that allows to be categorized such that it doesn't run afoul of sections one or two i believe that those exceptions would provide a similar and it inadequate that the plan document is written with a default that monies will not be provided to you until terminations of employment that that's the default option which are not believe that that  of section or subsection two of the research thank you thank you we appreciate your briefing and your arguments have been very helpful to this complicated case we will take it