FI L ED U.S. COURT OF A P P E A LS E LE V E N T H C IR C U IT J UNE 28, 2007 THOMAS K. KAH

N CL ERK [PUBLIS H] IN THE UN ITED STATES COURT OF APPEALS FO R T HE EL EV EN TH CIRC UI T

____ ____ ____ ____ ____ ____ N o. 06- 1211 7

____ ____ ____ ____ ____ ____ D. C. Docket N o. 04-00562 -CV -PT -M W E N D E L L F . G IL L E Y , an in div idu al an d a s cl as s re pr es en ta ti ve , Pl ai nt iff -Ap pe ll ee, ve rs us MONSANTO COMPANY, INC., a co rp or at io n, M ONS ANT O C OM PANY S ALA RI ED E M PL OYE ES ’ PENSION PLAN, EMPLOYEE BENEFITS PLAN COMMITTEE, PHARMAC IA CORPORATION, a corp or at io n, Defen da nt s- App el la nt s, MON SA NT O C OMP AN Y E MPL OY EE BENE FIT S EXECUTIVE COMMITTEE, Defen da nt .

____ ____ ____ ____ ____ ____ Appeal f rom the United State s District Court f o r th e N o rt h e rn D i s t r i c to f

A l ab a ma

____ ____ ____ ____ ____ ____ _ (J un e 28, 200 7)Honora ble J erome Fa

rris, United States Circuit J udg e for the Ninth Circuit, sitt ing by * desig nation. 1 Oliver Wendell Holmes, Jr., Feb. 23, 1890 L etter to F rede rick Pollack, in The 1 Holmes-Pollack L etters: The Corresponde nce of Mr. J ustice Holmes and Sir F rede rick Pollock 1874 – 1932 32, 33 (Mar

k DeWolfe, e d., Har

vard Univ. Press 2d prtg . 1941). 1 Oliver Wendell Holmes, Jr., May 25, 1906 L etter to F rede rick Pollack, in The 2 Holmes-Pollack L etters, supra note 1, at 123, 124.

2 Be fo re CA RN E S, P RY O R and F A RR IS , Ci rc uit Jud ge s. * CAR NE S, Circuit Judge: T hr ough out

his j udi ci al c ar ee r H olm es r el ish ed c ha lle ngi ng c as es . Whil e on Ma ssa chuse tts ’ hig he st c ourt he c onf es se d to af

ri en d th at a lth oughnon e of

the ca se s he ha d handl ed

that y ear ha d be enof

uni ve rs al int er es t, “ the re is al w ay s th e ple as ur e of

unr av el ing adif

fi cu lty . ” Ade ca de a nd a ha lf la te r, w hil e on the 1 Su pr em e Co urt, he tol d th e sa m e fr ie nd tha t he ha d f ewc as es of

ge ne ra l i nte re st that t er m , but “ [t ] he re is al w ay s th e fun of unty ing akno t and try ing to do i t i n go od co m pa ctfor m .” It i s a p it y

th atHol m es di d n ot li ve to see ERISA cas es . 2 I. W en de ll G ill ey

w as e m plo y ed by Mo nsanto Co m

pany , I nc . f

ro m A ugus t 31 , 1972 thr oughF eb ru ar

y 16, 198 2 a t i ts S an d M ount ai n te xti le plant i n N orthe as t Alabam a. Mon santo c los ed the plant i n M ar chof

198 1, but

G ill ey r em ai ne d on th e p ayro ll in layoff s ta tu s u nt il Feb ru ary 19 82 when he was fi na ll y let go .Th e ma jor ity of ERI SA b e c ame e ff

e c tiv e Janu ary

1, 19 75 , b ut f

or a ll p e ns ion

pla ns in 3 exis tence as of January

1, 1974, of which the Plan here was one , the par ticipation and vesting standards of

ERI SA became applica

ble on the first da

y of the plan year

beg inning a fter D ece mber 3 Although the period of his em ploym ent was under nine-and-a- half y ears, Gilley claim s that with the overtim e that he w orked in 19 72, he acquired the nece ssary te n years o f “ Ves te d S erv ic e” t o m eri t p en si on be ne fit s. Under Monsanto’ s Salar ied Em ploy ees’ Pension Plan, ce rtain em ploy ees ar e en ti tl edto be ne fit s i f th ey are ab le to m eetth e v es ti ng req ui rem en ts of t he pl an . A lth oughMo nsanto ha s am en de d it s pe nsi on p lan se ve ra l t im es ove r the y ears , a ll relevant versions of the plan set out the sam e basic vesting requirem ents: (1) an eligible em

ploy ee m ust reach re tirem ent age, and (2) the em ploy ee m ust acquire at le as t t en y ears of “ Ves te d S erv ic e.” An e m ploy ee earns a y ear of Ve sted Service w he n he c om

ple te s 1, 000 “ H our s of

S er vic e, ” de fi ne d a s a ll hour s of e m plo ym en t fo r w hic h an e m

plo y ee is dir ec tly

or ind ir ec tly

c om pe nsa te d, dur ing that y ear. T he m anner in which H ours of Service are calculated has varied as M onsanto has am en de d i ts pe ns io n p la n. Whe n G ill ey

be gan w ork a t M onsanto , the 197 1 P lan w as in ef fe ct . T he pe nsi on p lan w as a m en de d in197 6 to c om ply w iththe r equir em en ts o f the Em pl oyee Ret ire m en t In co m e Sec ur it y Act o f 19 74 , 29 U.S.C. §§ 10 01 , et s eq ., w hic h w en t i nto e ff

ec t, f or our pur pose s, in 1976 . A cc or din g to Mo nsanto , both 331, 1975, eff ectively 1976. See 29 U.S.C. § 1061(b)(2) . 4 t h e 1 9 7 1 P l a n an dth e 1 9 7 6 p o s t - a me n d me n tP l a n u t i l i z e dth e “E l ap s e dT i me Met ho d” to cal cu la te Vest edServ ic e fo r pe ns io n p ur po se s. Under this m ethod, an em plo y ee is cr ed ite d w iththe hours that r es ult f ro m div idi ng the tot al num

be r of calendar day s of em

ploym ent, including weekends and hol iday s, by 365 and th en m ultip ly ing th at num

ber by 2,080 (the total hours in a “ Standard W ork Year” ba se d onaf

orty -h our w ork w ee k) . I n othe r w or ds, a n e m plo y ee ’ s H our s of Service are determ ined based on the fra ction of the y ear he is em ploy ed, m

ultip lied by the S tandard

W ork Y ear— if

a n in div idu al is em

plo y ed f or 176 day s ou t of

the y ear, he w ouldbe entitled to 1,002 Hours of Service or one y ear of Ve sted Service . So m et im e be tw ee n 19 79 and 1 981, the P lan C om m itt ee de ci de d to c hange the w ay H our s of S er vic e ar e de te rm ine d, a dopt ing the “ 95- H our Ru le ” an d in co rp or at in g i t i nt o t he am en dm en ts to th e 1 98 1 P la n. U nde r thi s c al cu la tio n m ethod, the pr ovi de r cr ed its a ll em plo y ee s w ithnin ety -f

ive H our s of

S er vic e fo r ea chtw o- w ee k pe ri od the y are e m plo y ed , r eg ar dle ss o f the a ct ua l ho ur s w orke d. T he 95- H our

Ru le e xpr es sly

e xc lud es a ddi tio na l c re dit f or ove rt im e hour s, em body ing the a ssu m

pti on tha t the f

if te ene xtr a H our s of

S er vic e cr ed ite d onabiwe ekly basis (assum ing a 40-ho ur we ek or 80 hou rs every two w eeks) is a f

air w ay5

to co ve r an y

ov ert im e h ou rs work ed . In addition to adopti ng the 95 -H our Rule, the 1981 Plan stated that an em ploy ee’ s benefit rights are to be determ ined according to the pensio n plan in effect at the tim e that the em ploy ee separ ates fro m Mo ns an to . Be lie vin g th at

he ha d a cquir ed

te n y ears of

V es te d S er

vic e, e ve n th oughhe had onlyworked f

or Monsanto for nin e full y ears and part of two other y ears (1972 and1982 ), Gilley

applied for pension benefits in 200 1. Monsanto denied his r eque st, be ca

use it c onc lud ed

that G ill ey ’ s V es te d S er

vic e fe ll shor

t of the re qui sit e te n y ears . Gilley filed an adm inistrative appeal, and the Monsanto Plan Co m m itt ee de nie d hi s pe tit ion . I t a ppl ie d th e 1981 P lan and the 95- H our Ru le to determ ine that Gilley

wa s onlyentitled to 9.594 y ears of Ve sted Service. G ill ey f ile d su it cl ai m ing that M onsanto ha d: (1 ) ar bitrari ly a nd capriciously

denied his claim

for benef its, in violatio n of ERISA§ 502, 29 U. S. C. § 11 32; ( 2) m ad e or al and wri tte n a ssuranc es that a ll em plo y ee s hi re d a t the S an d Mounta in p lant a ft er

S ep te m be r 1972 w er e ve ste d and, the re fo re , is equit ab ly es top pe d f

ro m de ny ing G ill ey

be ne fi ts n owund er

E RI SA§ 50 2; ( 3) int en tio na lly cl ose d th e Sand M ount ai n P lant r igh t be fo re the e m plo y ee s w oul d r ea chthe te ny ear m ark, in viol ation of ERI SA§ 510, 29 U. S. C. § 114 0; (4) am ended the Plan to r etro ac tiv el y

r ed uc e or e lim inate the a m ount

of a cc ru ed H our s of S er vic e in6

vio la tio n of

E RI SA§ 20 4( g) (1 ), 29 U . S. C. § 10 54( g) (1 ); a nd ( 5) br ea ch ed it s fi duc iary duty by f ai lin g to a ct

in the be st i nte re st o f plan part ic ipants , in vio la tio n of E RI SA§ 40 4, 29 U . S. C. § 11 04. Mon santo f ile d am oti on t o di sm iss , a rg uin g that the 198 1 Plan governed the determ ination of G illey ’ s credit, and that und er th e p la n Gi ll ey

lac ke d t he req ui si te ten y ears of Ve st edServ ic e. The district court de ni edth e m ot io n t o d is m is s. G ill ey the n f ile d an am en de d c om

pla int , spe ci fi ca lly

r es ta tin g a ll of

his cl ai m s u nd er t he “ eq ui tabl e rel ie f” s ect io n o f ERISA, § 50 2( a)(3 ), 29 U.S.C. § 1132 (a )( 3) , and a ddi ng a

c la im und er § 50 2( c) , 29 U . S. C. § 11 32( c) , a nd § 510 , 29 U . S. C. § 11 40, a sse rt ing that M onsanto ha d in te rf er ed w ithhis a tte m

pts to atta in be ne fit s b y

refu si ng to pro vi de hi m

wit h re qu es te d d oc um en ts . The am ended co m pla int a lle ge d th at

the 95- H our

Ru le sho uld

not be appl ie d be ca

use , a cc or din g to G ill ey , it

is le ss f av or ab le to him

than th e 1976 P lan’ s m ethod of c al cu la tin g Hou rs of S erv ic e. Mo ns an to fil eda m ot io n fo r su m m ary jud gm en t, as se rti ng th atERISA § 502( a) (3 ), 29 U . S. C. § 11 32( a) (3 ), onl y pe rm its e qui ta

ble r el ie f an d do es not

appl y when a par

ty is seeking pu rely

legal relief

, a s Monsanto claim ed Gilley wa sMonsanto contends that Gilley cannot pr operly

make out an e quitable claim under 4 ERI SA § 502(a)( 3), 29 U.S.C. § 1132(a)( 3), bec ause he is actually seekingleg al re lief which c an only be g rante d under § 502( a)( 1)(b) , 29 U.S.C. § 1132(a)(1) (b). Our disposition of this appeal does not requir e us to dec ide the natur e of the relief Gilley is seeking , and it is not a question that g oes to the existence of subjec t matter jurisdiction. See B lue Cross & B lue Shield of Ala. v. Sanders, 138 F .3d 1347, 1352 (11th Cir. 1998) (notingthat subject matter jur isdiction ex ists even if the re medy

soug ht under § 502(a )(3) is leg al in nature , beca use a f inding that the r elief sought is leg al in nature “‘doe s not neg ate the e x istence of fede ral subjec t matter jurisdiction, but rather indicates that [the plaintiff] may have f ailed to state’ a

claim upon which r elief c an be grante d” (quotingHea lth CostControls v. S kinner, 44 F .3d 535, 537–38 (7th Cir. 1995))). 7 doi ng. A ddi tio na lly , Mo nsanto r es ta te d it s arg um en t tha t G ill ey c an not pr ove the 4 ten y ears of Ve sting Ser

vice necessary

to m erit benefits. It put before the c ourt So ci al S ec ur ity

r ec or ds i ndi catin g th at

G ill ey ha d e ar ne d atot al of

$2, 149. 68 i n 1972 , an d othe r re co rd s sh ow ing that i n 19 72 h is b as e sa lary ha d be en$42 0 mo n t h l y, o r

$ 5 , 0 4 0 an n u a l l y. Gilley argued that the $420 figure ac tually included ove rt im e pay

and tha t hi s m onthly

ba se sa lary

w as r ea lly

onl y $39 0, w hic h w oul d ha ve be en $4 ,68 0 a nn ua ll y . Based on all of those records, Monsanto argued that even if the district court ca lc ulate d H our s of

S er vic e ba se d onthe a ct

ua l ho ur s G ill ey

w orke d, G ill ey

sti ll w as not e nti tle d to ape nsi on. U sin g th e $2, 149. 68 f igure , a$42 0 m onthly

ba se sa lary , a nd the 2, 080 hour “ St an dard

W ork Y ear” se t ou t i n th e 1981 P lan, Mon santo a sse rt ed

that G ill ey

c oul d have a ct

ua lly w orke d on ly

887 . 2 ho ur s in 1972 (if a ll hou rs w ere com pensated equally ), we ll short of the 1,000 ho urs8

ne ed ed . Monsanto also poin ted out th at because the $2,149.68 salary Gilley earn ed in 1972 inc lud ed

c om pe nsa tio n f

or som e ove rt im e an d ho lid ay hours , which w ouldhave been paid at a pre m ium rate, Gilley ’ s actual hours worked w oul d be m

uc h le ss. What’ s m ore, even if G illey ’ s claim ed $390 m onth ly salary fi gur e an d th e re sul tin g $4 , 680 an nua l sa lary f igure a re a cc ep te d, the m ax im um it ap pe ar s G ill ey

c oul d have w orke d in197 3 ba se d onthe S oc ia l S ec ur ity r ec or ds i s 95 5.4 1 h ou rs (as su m in g a ll ho ur s wer e co m pe ns at edat t he same ho ur ly w ag e). Still, the district court denied Monsanto ’ s m otion , f indin g that a trial w as warranted based on the “ closeness of the vestin g issu e. ” A tw o-day

bench trial w as conducted sol ely to decide the num

ber of H ours of Ser vice cre dit Gilley

wa s entitled to receive for his em ploym ent in 197 2. A fter tr ia l, the dis tr ic t c ourt or de re d G ill ey to subm it an“ ite m iz ed , suc ci nc t l ist sho w ing ex ac tly how[ he ] . . . w oul d arr ive a t a m ini m um of 1, 000 [H ] our s of

[ S] er vic e in 1972 .” In re spon se, G illey offer ed three “ equivalencies,” cla im ing th at eac h show ed he w as e nti tle d to be ne fi ts. E RI SAgiv es aplan th e opt ionof usi ng equiv al en ci es in or de r to s im pli fy the r ec or d ke ep ing a nd c al cu la tio n burd en s associated with determ ining Hours of S ervice, 29 C . F. R. § 25 30. 200b -3 (a ). Ali st of equi va le nc ie s fr om

whi ch a pl an m ay

ch oo se is co nt ai ne d i n t he reg ul at io n, i d. § 2530 .200b-3(d), ( e).9

The district court ac cepted two of the thre e equivalencies that Gilley su gg es te d. One of those two calculates H ours of Service based on “ Hours W orke d” und er

29 C . F. R. § 25 30. 200b –3( d) (1 ), gr an tin g 1, 000 H our s of S er vic e if 870 hour s are w orke d. The other c alculates H ours of Service based on “ Regular T im e H our s” und er

29 C . F. R. § 25 30. 200b –3( d) (2 ), gr an tin g 1, 000 H our s of Serv ic e if 75 0 “ Reg ul ar Tim e Hou rs ” are work ed . The par ties disp ute whether Gilley would be entitled to a pensio n und er e ither or both of the two equivalencies th e d is tri ctco ur t ad op te d. The m ath invo lved with both equivalencies is dense, en oughso tha t duri ng o ra l arg um en t c ouns el ha d di ff ic ulty a nsw er ing som e of

our qu es ti on s ab ou t t he nu m

be rs an d fo rm

ul as us eddu rin g t he tri al . T he m or e fundam en ta l po int that M onsanto str es se d, how ev er , is that the Plan never included either of the tw o equivalencies that th e district court used at G ill ey ’ s ur gin g. Instead, the 1981 Plan included th e 95-Hour R ule, anoth er eq u i v al en cy p er m i t t ed b y ER IS A. S ee 2 9 C. F. R. § 2 5 3 0 .2 0 0 b -3 (e )( 1 )( i i i ). We wi l l s p ar e t h e r ea d erth e d et ai l s o f h o w t h e 9 5 -H o u r R u l e p l ays o u ti n Gi l l ey’s ci rc um stanc es , e xc ep t t o say that e ve ry one a gr ee s th at und er it G ill ey w oul d no t be en ti tl edto a pe ns io n. Init s f ind ing s of

f ac t and c onc lus ion s of

law , the dis tr ic t c ourt r ef use d to apply the 95-Hour Rule set out in the 1981 Plan. Its re asoning wa s that “ later1 0

am endm ents to the Plan sho uld no t have an eff ect on the 1972 calculations if they im pact adversely

on plaint iff’ s entitlem ent.” Even though th e tw o equivalencies that wer e m ore favorable to Gilley had never been part of the Plan, the district co urt j ust if

ie d th ei r use on the gr ound s th at Mo nsanto ha d no t ke pt a de qua te reco rd s o f th e h ou rs Gil le y work edin 19 72 . It

sa id tha t G ill ey

w as e nti tle d to the

“ be ne fi t of

the doubt” be ca

use Mo nsanto ha d f

ai le d to ke ep a de qua te r ec or ds f ro m th aty ear. Apply ing th e tw o equivalencies that Gilley prefe rred, the court de te rm ine d th at

he did have the r equis ite H our s of S er vic e to r ec ei ve af

ull y ear of cr ed it fo r 1972 , giv ing him te n y ears of

V es te d S er

vic e w hic h e nti tle d hi m

to a pe nsi on. T hr ough out

it s r ea soni ng, the c ourt a ppl ie d a“ he igh te ne d arb itr ar y and capricious” standard of defer ence, because it concluded that the Plan Com m ittee ha d a co nf

li ctof i nt eres t i n m ak in g b en efi t d eci si on s. T he c ourt’ s j udgm en t or de re d M onsa nto to pay

G ill ey his pa st d

ue pe nsi on benefits, “plus app ropriate interest, ” and to pay addition al retire m ent benefits as they accr ue in the future. Monsanto filed a m otion to alter or am end the district co urt’ s j udgm en t, a sse rt ing m ult ipl e m athe m at ic al a nd l eg al e rr or s inthe ap pl ic at io n o f th e two equi va le nc ie s t he di st ric t co ur t u se d. Af ter the court denied th atm ot io n, M on sa nt o fi le d t hi s ap pe al .1 1 II. W e initially

had som e doubt abo ut our jurisdiction to d ecide this appeal be ca use , w hil e the dis tr ic t c ourt or de re d M onsanto to pay “ ap pr opr ia te int er es t” on the aw ar d of

pa st b en ef

its , it did not spe ci fy the r at e of

int er es t or

the da te f

ro m w hic h th e int er es t w oul d be c al cu la te d. W e w er e co nc er ne d th at the j udgm en t m ig ht no t b e fi na l u nd er 2 8 U.S.C. § 12 91 forpu rp os es of app el la te rev ie w. T he dis tr ic t c ourt’ s f

ai lur e to s et

a n in te re st r at e fo r ca lc ulatin g pr ej udgm en t int er es t m igh t have be enapr obl em f or the pur pose of our j ur isd ic tio n if

the j udgm en t ha d no inj unc tiv e as pe ct s. S ee S E C v . Carr ill o, 325 F . 3d 1 268, 127 2–73 (1 1thCi r. 200 3) ( pe r curi am) (n oti ng tha t “ if the j udgm en t am ount , the pr ej udgm en t i nte re st r at e, or the da te f

ro m w hic h pr ej udgm en t i nte re st a cc ru es is unc le ar , the c al cu la tio n of pr ej udgm en t i nte re st i s no lon ge r a m ini ste ri al a ct a nd the c ourt’ s or de r is n ot f

ina l” ); but

se e Moo n v. A m . H om e A ssuranc e Co . , 888 F. 2d 8 6, 89– 90 ( 11th C ir . 198 9) ( ad dr es sin g th e m er its but r em an din g th e ca se ba ck to the dis tr ic t c ourt f

or c lari fi catio n onthe que sti ons of w he the r pr ej udgm en t in te res t was in te nd edan d t he rat e atwhi ch an y su ch in te res t s ho ul d b e cal cu la te d) . How ever, the j udgm ent here does include injunctive relief, because it re quires Monsanto to contin ue to pay pension benefits as they

accr ue in the future. Under 28 U.S.C. § 1 29 2( a)(1 ), we ha ve juri sd ic ti on ov er o rd ers gra nt in g i nju nc ti ve rel ie f.1 2

T he dis tr ic t c ourt’ s j udgm en t he re is inj unc tiv e en oughin na tur e to g ive us j ur isd ic tio n ov er

the appe al . III . O n th e m er its , both si de s a gr ee that G ill ey m ust have te n y ears of

c re dit to be e nti tle d to ape nsi on, and the y a gr ee that he e ar

ne d a t l ea st n ine y ears of

c re dit fo r his w ork a t the plant f ro m 197 3 to 198 2. Their

disagreem ent is about whether G ill ey ge ts a f ull y ear of

c re dit f or 197 2, his f

ir st y ear on the j ob, w he n he a ct ua lly w orke d on ly

f our m onths f or Mo nsanto . I f G ill ey

is cr ed ite d w ithaf

ull y ear fo r worki ng th os e fo urm on th s, h e g et s a p en si on . T he dis tr ic t c ourt’ s c onc lus ionthat G ill ey sho uld be tr eate d a s havin g w orke d af

ull y ear in 1 972 w as ba se d onit s be lie f that i nst ea d of the 95- H our

Ru le in the 198 1 Plan, the H ours W orked or Regular T im e H ours equiv alencies, which G ill ey pr opos ed , sho uld

be use d. T he part ie s di sa gr ee about w he the r G ill ey

is entitled to a pensio n even if those two equivalencies are used, but they do agree that he is not

e nti tle d to ape nsi on unde r the 198 1 P lan’ s 95 -H our Ru le . T he que sti on tha t de te rm ine s th e iss ue s w e ad dr es s inthi s a ppe al is w he the r the 95- Hou r Ru le is th e eq ui va le nc y th atsh ou ldbe ap pl ie d.

A. T he part ie s th ink

that the a nsw er

to that qu es tio n m igh t de pe nd o n th e1 3

standard of defere nce applicable to the Plan Com m ittee’ s decision to deny Gilley pension benefits. Monsanto argues that the arbitrar y and capricious standard applies, w hile Gilley

think s the district court was corr ect to apply a heightened arb it rary andcap ric io us st an da rd . G ive n th e na tur e of the iss ue on whic h th is c as e tur ns, w e doub t that the standard of de fe re nc e m ak es a ny

dif fe re nc e. T o th e ex te nt th atitdo es , ho wev er, t he pro pe r st an da rdis arb it rary andcap ric io us . E RI SAdoe s no t e xpl ic itl y e sta bli sh the standard

of r ev ie wto be appl ie d to a plan adm inistrator’ s decision. Firestone T ire & R ubber Co. v. Bruch, 489 U.S . 101, 109 , 109 S . Ct . 948 , 953 ( 1989 ). F oll ow ing the S upr em e Co urt’ s di re ct ion , how ev er , w e ha ve a dopt ed thr ee dif fe re nt s tandard s to gui de us: ( 1) de nov o re vie wappl ie s w he re the plan a dm ini str at or ha s be engiv enno d isc re tio n in deciding claim s; (2) arbitrary and capricious reviewapplies where the plan adm inistrator has discretion in deciding claim s and does no t suffer f rom a conflict of int er es t; an d ( 3) he igh te ne d arb itr ar y a nd c ap ri ci ous re vie wappl ie s w he re the plan adm inistrator has discretion b ut suffers fr om a conflict of intere st. H CA H ea lthS er

vs. of G a. , I nc . v. E m

plo y er s H ea lthI ns. Co . , 240 F . 3d 9 82, 993 ( 11th Ci r. 200 1) . F or

pur pose s of that thir d st an dard , ac onf lic t of int er es t e xis ts whe n a pr ovi de r ha s to pay

be ne fi t c la im s ou t of

it s own a sse ts, m ak ing it dir ec tly advanta ge ous to the pr ovi de r fo r the c la im s to be de nie d. T he se thr ee standard s1 4

have been broadly

applied to bo th the adm inistrator’ s interpretation of plan pr ov is io ns as we ll as t he ad m in is tra to r’s de ci si on to gra nt or d en y be ne fit s. W illiam s v. Be llsou th Telec omm s., Inc. , 373 F. 3d 11 32, 1135 n .3 (11th Cir. 2004 ); Param ore v. De lta Air

Lines, Inc. , 129 F. 3d 14 46, 1451 (11t h Cir. 1997 ). Our c ircuit law is clear that no conflict of interest e xists wher e benefits ar e paid from a trust that is funded throu gh periodic cont ribution s so that th e provider inc ur s no im

m ed ia te e xpe nse a s ar es ult of pay ing be ne fi ts. S ee Bu ck le y v. Me tr o. L i f e , 1 1 5 F . 3 d9 3 6 , 9 3 9

– 4 0 ( 1 1 t h C i r . 1 9 9 7 ) . O n l y w h e n b e n e f i t s a r e p a i df

r o m a pr ovi de r’ s a sse ts, so tha t be ne fi t de ci sio ns h av e a dir ec t and i m m ed ia te im

pa ct on the provider’ s profit m argin, does the heightened stand ard com e into play . See W ill iam s, 373 F . 3d at 11 35. Inthi s c as e, the P lan gave the P lan C om m itt ee dis cr et ionto m ak e be ne fi ts de ci si on s. T he r ec or d c le ar ly e sta bli she s th at

be ne fi ts w er e pa id o ut o f a nonre ve rs ion ar

y tr ust ins te ad of f ro m Mo nsanto ’ s own a sse ts. In Bu ck le y , we specifically

considered the standard of defere nce to be applied when benefits are paid out of a trust funded by periodic, non-rever sionary contributio ns. 115 F.3d at 939. W e he ld tha t w he re the c om pany ne ith er inc ur s adir ec t e xpe nse in pay ing be ne fi ts n or

dir ec tly pr of its f ro m de ny ing or

dis co nti nui ng b en ef

its , the re is no co nf lic t of int er es t. I d. a t 93 9–40 . T ha t ho ldi ng h as be enr ei te rate d insub se que nt1 5

ca se s. S ee , e . g. , T ur

ne r v. D el taF am ily -C ar e D isa bil ity & Surv ivo rs hip P lan, 291 F. 3d 1 270, 127 3 ( 11th C ir . 200 2) ( pe r curi am) (a non -r ev er sio nary , pe ri odi c tr ust

“ er ad ic at es any

a lle ge d c onf

lic t of int er es t so that the a rb itr ar y or c ap ri ci ous standard of r ev ie wappl ie s” ). T he f

ac t tha t the c om

pany is re spon sib le f

or rep le ni sh in g t he fun ds of t he tru st is no t en ou gh to crea te a co nf li ctof i nt eres t. Id . For these re asons, the district court erre d in apply ing th e heightened ar bitrary and c ap ri ci ous standard . T o th e ex te nt tha t a de fe re nc e standard

appl ie s, th e o rd in ary arb it rary andcap ric io us st an da rdis th e o ne . B. The district court also er

red in forcing on the Plan two equivalencies that the P lan ha d ne ve r ad opt ed . T he c ourt ba se d it s su bst itu tio n of

the e qui va le nc ie s, Gilley favored f or the one in the Plan on its v iew that Monsant o had failed to keep ad equa te r ec or ds o f the hours G ill ey w orke d in197 2. W e ha ve som e doub ts a bout w he the r a co urt ge ne ra lly c anim pose on a plan e qui va le nc ie s th at

the plan di d no t ch oo se si m

pl y be cau se of t he ab se nc e o f ad eq ua te reco rd s. W e have no doub t, howe ver, that a plan cannot be forced to use an equiv al en cy

that i s di ff

er en t f ro m the one the plan c hose sim ply be ca use it or the co m pany did not ke ep a de qua te r ec or ds f

or E RI SApur

pose s be fo re the re w as any E RI SA . T he y ear w e ar e ta lki ng a bout is 1972 , a nd E RI SAw as not e na ct ed unt il1 6

Se pte m be r of 197 4 ( w ithan e ff

ec tiv e da te , f

or our pur pose s, of January 1, 197 6, se e 29 U . S. C. § 10 61( b) (2 )) . O nly a ft er the ti m e fo r doi ng s o ha d pa sse d di d th e Pl anand the c om

pany le ar n th at it w oul d be ne ce ssary

to m ak e an d ke ep the re co rd s. C om

panie s and p en sio n pl anm an ag er s are not r equir ed to be c la irvoy an t. Instead, when it com es to pre-enac tm ent y ears, ER ISArequires only that plans d o th e be st the y

c anw iththe r ec or ds the y have , a nd i t pe rm its plans t o ch oo se an equi va le nc y

fro m th os e se t o ut in th e reg ul at io ns . 29 C.F.R. § 2530 . 200b -3 (b ), ( d) , ( e) . T his is howthe r el ev an t r eg ulatio n r ea ds:

If a ccessible rec ords are insufficient to m ake an approxim ation of the num ber of pre -eff

ective date hours of service f

or a particular

em ploy ee . . . the plan m ay m ake a r easonable estim ate of the hours of service co m ple te d by suc h e m plo y ee . . . . Aplan m ay

use a ny of the e qui va le nc ie s pe rm itt ed und er thi s se ct ion , or

the el ap se d ti m e m ethod of

c re dit ing se rv ic e . . . to de te rm ine ho ur s o f se rv ic e co m

pl et ed. . . . Id . § 25 30. 200b –3( b) . T ha t i s e xa ct ly w ha t the P lan di d inthi s c as e. I t c hose the 95 -Ho urRu le an d app li edth e ru le to th e v ag ari es of Gi ll ey ’s 19 72 workhi st ory . A s th e re gul at ionw e ha ve quo te d sh ow s, E RI SApe rm itt ed it to do s o. T he statut e an d r eg ulatio ns l eave the c hoi ce of e qui va le nc ie s to plans, not to co urts. T he district court sho uld no t have overridden the Plan’ s choice and applied an equiv al en cy

that w as not

in the P lan. S ee id. § 25 30. 200b –3( c) (1 ) (“ A ny1 7

equivalency

used by a plan m ust be set forth in the do cum ent under which the plan is m ai nt ai ne d.” (em

ph as is ad de d) ). C. Ina ddi tio n to sub sti tut ing it s own pr ef er re d e qui va le nc ie s be ca

use of the la ck of a de qua te r ec or ds o f G ill ey ’ s w ork ho ur s in197 2, the dis tr ic t c ourt a lso re j ec te d th e 95- H our

Ru le be ca

use it w as a dopt ed

a ft er 197 2. T he r ec or d is unclear exac tly

when the 95-H our Rule wa s adopted, but it was som etim e betwe en 1979 a nd J anuary

1, 198 1. T he dis tr ic t c ourt thoug ht t he f ac t tha t the r

ule w as not ad o p t ed u n t i l s o m et i m e d u ri n g th at p er i o dfo re cl o s ed i t s u s e b ec au s e, i n th e c o u rt ’s w or ds, “ la te r am en dm en ts t o th e Pl ansho uld not have a n e ff

ec t onthe 197 2 calculations if they

im pact adversely

on plaint iff’ s entitlem ent.” Fi rs t, it is im portant t o r ec ogni ze that the re is no w ay G ill ey c oul d have ac cum ulate d th e re qui sit e te n y ears of V es te d S er

vic e, und er

a ny c al cu la tio n m ethod, by

the ti m e Mon santo a dopt ed the 95- H our

r ule . O n January

1, 198 1, Gilley could have accum

ulated, at m ost, nine y ears of Ve sted Service c redit. Even if he is giv enaf

ull y ear of

c re dit f or 197 2, he w oul d st ill onl y have a cquir ed

nin e y ears by the beginni ng of 198 1. A ll of Gilley ’ s argum ents that he earned ten y ears of V es te d S er

vic e co unt

hours he w orke d in198 1 a ft er the P lan w as a m en de d to put the 95- H our

Ru le in pla ce . T his f

ac t i s c ri tic al to our

a na ly sis of

w he the r the1 8

ad op ti on of t he 95 -Ho urRu le an d i ts ap pl ic at io n t o Gi ll ey vi ol at edERISA. G ill ey take s th e dis tr ic t c ourt’ s de te rm inatio n th at la te r am en dm en ts c an not adve rs el y im pa ct apla int if f’ s e nti tle m en t and r

uns w ithit , c as tin g it

in te rm s of ERISA’s “ an ti -cu tb ack ” ru le . E RI SA§ 20 4( g) , 29 U . S. C. § 10 54( g) (1 ). O ne of the purpos es of E RISAis to protect pensio n rights b y ensuring “ that if a w orker has been prom ised a defined pension benefit upon retirem ent—and if he has fu lf ill ed w ha te ve r co ndi tio ns are r equir ed to obt ai n ave ste d be ne fi t— he a ct ua lly w ill r ec ei ve it . ” N ac hm anCo rp . v. P en sio n B en ef it G uar. Co rp . , 446 U . S. 359 , 375, 100 S . Ct . 172 3, 173 3 ( 1980 ). T o f urthe r that purp ose , the “ an ti- cu tba ck ” ru le pr ovi de s th at

“ [t ] he a cc ru ed

be ne fi t of

apart ic ipant unde r a plan m ay not be de crea se d b y

an am en dm en t o f th e p la n.” ERISA § 20 4( g) , 29 U.S.C. § 10 54 (g )(1 ). By

its own term s, what the rule forbids is cutbacks on “ accr ued benefits.” Ther e is a diffe rence betwee n “ accr ued benefits” and “ vested benefits.” The Suprem e Court has explained that benefit accr ual is “ the rate at which ane m plo y ee e ar

ns b en ef its to put in his pe nsi on a cc ount , ” w hil e be ne fi t ve sti ng re fe rs to the poi nt at w hic h apart ic ipant’ s pe nsi on r igh ts b ec om e nonf or fe ita ble

“ by virtue of his havin g fulfilled age and length of service requirem ents.” C entral L ab or er s’ P en sio n F und v. H ei nz , 541 U . S. 739 , 749 , 124 S . Ct . 223 0, 223 8 (2004). Aparticipant is fully vested when he has a nonforfe itable right to hi s total1 9

ac cr ue d be ne fi t. I n othe r w or ds, be ne fi t a cc ru al a ff ec ts the siz e of

the pe nsi on, while benefit vesting determ ines whether a pension will be paid at all. See St ew ar t v. N at ’ l S hopm enP en sio n F und, 730 F . 2d 1 552, 156 1–62 ( D . C. Ci r. 198 4) (n oti ng tha t “ ‘ ve sti ng’ gov er ns whe n an e m

plo y ee ha s ar igh t t o ape nsi on;

‘ ac cr ue d be ne fi t’ is use d inc al cu la tin g th e am ount of the be ne fi t t o w hic h th e em plo y ee is en tit le d” ); S ilv er na il v. A m er ite chP en sio n P lan, 439 F . 3d 3 55, 359 (7 th C ir . 200 6) ( “ Be ne fi t a cc ru al a nd v es tin g are r el at ed but dif fe re nt c onc ep ts.

‘ Ve sting provisio ns do n ot affec t the am ount of the acc rued benefit, but rather gove rnw he the r al l or

aportio n of

the a cc ru ed

be ne fi t i s no nf

or fe ita ble . ’ ” (quot ing H oove r v. Cum

be rl an d, Md . , A re a T eam ste rs P en sio n F und, 756 F . 2d 9 77, 983 –84 (3 d C ir. 1 98 5) )). T he P lan am en dm en t a dopt ing the 95- H our Ru le a ff ec te d G ill ey ’ s a

bil ity to ve st b ef or e he ha d ve ste d, but

it did not r ed uc e the a m ount

of his a cc ru ed

be ne fi t or the r at e at

w hic h he w as a cc ru ing be ne fi ts. T hr ough out G ill ey ’ s e m

plo ym en t the P lan pr ovi de d th at

an e m plo y ee ha d to r ea chthe r et ir em en t a ge a nd h av e ac cum ulate d th e re qui sit e te n y ears of V es te d S er

vic e be fo re he w as e nti tle d to a pe nsi on. T he a m en dm en t a dopt ing the 95- H our Ru le , w hic h oc curr ed

dur ing G ill ey ’ s e m

plo ym en t, did

not a ff ec t the r at e at

w hic h he a cc ru ed

be ne fi ts, a lth ough it did alter the m ethod for calculating Vested Se rvice, which in turn determ ined2 0

whether he rec eived a pension. The ER ISA§ 204(g) anti-cutback provi sion d oes no t ap pl y to ch an ge s i n v es ti ng req ui rem en ts . Ther e is another provisio n, howe ver, that does. Se ction 20 3 of ER ISA provides th at a plan am endm ent changing the vesting s chedule shall be treated as not sa tis fy ing the r equir em en ts o f E RI SA : if the non fo rf

ei ta ble pe rc en ta ge of

the a cc ru ed

be ne fi t de ri ve d f

ro m em ploy er c ontribu tions (determ ined as of the later of the date such am endm ent is adopted , or the date such am endm ent becom es effe ctive) of any

em ploy ee who is a participant in th e plan is less than suc h no nf or fe ita ble pe rc en ta ge c om

put ed und er the plan w ith out re gard to suc h am en dm en t, un le ss th e em

pl oyee is gi ve n t he op ti on of e le ct in g t he pre -am en dm en t p la n. E RI SA§ 20 3( 4) (c )( 1) (A ); 29 U . S. C. § 10 53( 4) (c )( 1) (A ). A lth oughMo nsanto ar gue s th at

the a m en dm en t i ntr oduc ing the 95- H our Ru le did not c hange the ve sti ng s ch ed

ule , som e co urts h av e co nc lud ed that c hange s inthe w ay

ve sti ng i s de te rm ine d c ana m ount

to ana lte ratio n of

the ve sti ng s ch ed

ule . S ee , e . g. , F en tr on In dus. , I nc . v. N at ’ l S hopm enP en sio n F und, 674 F . 2d 1 300, 130 6 ( 9thCi r. 198 2) (n oti ng tha t the c an ce llatio n of pa st s er vic e cr ed its , w hic h di m ini she d th e pe nsi on cr ed i t s o f o t h erwi s e v es t ed p ar t i ci p an t s , wa s a v es t i n g s ch ed u l e a m en d m en t ). We will assum e for pr esent purpos es that those courts are corr ect and that the Plan am endm ent we are discuss ing di d change the Plan’ s vesting schedule.2 1

E ve n m ak ing that a ssu m

pti on, the re sti ll w as no v iol at ionof E RI SA§ 20 3, because the plain language of the provis ion lim its its scop e to benefits that are nonf or fe ita ble ( “ if the non fo rf

ei ta ble pe rc en ta ge . . . suc h no nf or fe ita ble pe rc en ta ge ”) a t the ti m e the a m en dm en t i s a dopt ed or be co m es e ff

ec tiv e (“ de te rm ine d a s of

the la te r of

the da te suc h am en dm en t i s a dopt ed , or the da te su ch am en dm en t b eco m es effe ct iv e”). ERIS A § 2 03 (4 )(c) (1 )(A); 29 U.S.C. § 1053 (4 )( c) (1 )( A ). Whe n th e 95- H our Ru le a m en dm en t be cam e ef fe ct ive on o r before January

1, 1981, and w hen it was adopted som etim e on or before that date, Gilley wa s not entit led to any

benefits, bec ause he could not have ear ned ten y ears o f V e s t e dS e rv i c e u n t i l a f

t e r th a td a t e . B e c au s e G i l l e y w a s n o tv e s t e da tth e t i me th e am en dm en t was ad op te d o r be cam e effe ct iv e, ERISA § 20 3 d oe s n ot he lp hi m . It f oll ow s th at

the dis tr ic t c ourt e rr ed

in co nc lud ing that the P lan am en dm en t ad opt ing the 95- H our

Ru le c oul d no t be appl ie d to G ill ey be ca use it c am e af te r he ha d s ta rte d e arn in g c red it to wardhi s p en si on . D. To the district court’ s reasons for not allowing the 95-Hour Rule, Gilley adds som e m ore of his own. A m ong th em is his assertion th at he w as never pr ope rl y not if ie d of the a m en dm en t. W e de cl ine to co nsi de r that c ont en tio n because it w as raised for

the first tim e in this appeal. FD IC v. Ve rex A ssurance,2 2

In c. , 3 F . 3d 3 91, 395 ( 11th C ir . 199 3) ( “ By w el l se ttl ed

c onve nti on, appe llate co urts g en er al ly

w ill not c onsi de r aniss ue or

the or y that w as not

r ai se d inthe district court.”). G illey

also appears to argue that the am endm ent discrim inates ag ai nst him , an arg um en t w hic h is dif fi cu lt to f oll owa nd unpe rs ua siv e in any ev en t. Finally , G illey

raises a host o f ar gum ents, both before us now and in earlier pr oc ee din gs, about

w hy he is equit ab ly

e nti tle d to ape nsi on n otw ith standi ng h is inabilit y to satisfy the vesting requirem ents und er the 95-H our Rule. The district court did no t reac h any

of these ar gum ents and we decline to take the f irst swing at the m . S om e m ay

r equir e fa ct

ua l de ve lop m en t, w hil e al l of the m m ay be ne fi t f ro m t w o - t i e r c o n s i d e r a t i o n . A l l o f

th e m th e d i s t r i c tc o u rts h o u l dd e a l w i t h a s i td e e ms ap pr op ria te on rem an d. IV. T he j udgm en t of

the dis tr ic t c ourt i s VACATED an d th e ca se is REMANDED fo r fu rth er p ro ceed in gs co ns is te nt wit h t hi s o pi ni on .