UNITED STAT ES DIS TRICT COURT F OR THE D ISTRIC T OF CO LU M BIA

DE NI S E M . CL ARK, P la in t if f, v. Ci vilAc ti on N o. 07 -0 47 0 ( JD B) F EDER, SE MO & BARD, P .C., etal., De fend ant s.
M EM OR AN DU M OP IN ION Denise Clar

k bring s this action pursuant to the Employ ee Re tirement Income Sec urity Act of 1974 (" ERI SA") , 29 U.S.C. § 1001 et seq., ag ainst the law fir m Fede r, Semo & Ba

rd (" Fe der Semo") , the Fe der Semo Retire ment Plan and Trust (" Retirement Plan" or " Plan") , and two former trustees of the Retirement Plan, J oseph Semo and How ard B ard. Contendingthat de fe nd ants imp ro pe rl y

de nie d h e r t

he fu ll v a lue of

he r r e tir e me nt b e ne fi ts, Cla rk a sse rt s a c la im for individual bene fits pursuant to 29 U.S.C. § 1132(a)(1) (B ), and a derivative claim for br eac h of fiducia ry duty pursuant to 29 U.S.C. § 1132(a)( 2). B efor e the Court is defe ndants' motion for summary judgme nt, on which the Court hea rd ora l argument on Fe bruar y 22, 2010. Upon ca

ref ul consideration of the parties' memoranda , the applica ble law, a nd the entire rec ord her ein, and f or the re asons set for

th below, the Court will gr ant in part a nd deny in part def

endants' motion. BACK GR OUND I. F ac tu al B ac kgr ound Clark worke d as an attorney at Fe der Semo for

almost ten y ear s, beg inning in 1993. Se c on d A m. C omp l. ¶

3. She be c ame a

" Cla ss A " sh are ho lde r o f t he fi rm in M arc h 2 00 0, and

inFe der Semo maintaine d a hy pothetical ac count for e ach pa rticipant that showed the 1 value of a par ticipant' s retire ment plan. Eac h hy pothetical ac count was de termined by ref ere nce to "hy pothetical alloca

tions and interest adjustments that are analog ous to actual c ontributions and ea rning s to an ac count balanc e plan." I d.; see a lso Defs.' SOF, Exhibi t 1 (Ter ms of the Fe der, Semo & Ba

rd Retireme nt Plan and Trust (" Fe der Semo Retire ment Plan Terms" )), Sec
. 2.3(b)( 2) (de lineatingwhat per centa g e of a n employ ee' s y ear ly

compensation would be cre dited to his hy pothetical ac count); id. at Sec. 5.1( d). The a ccount e qualed the sum of the money Fe der Semo deposited into the acc ount, and any interest that ac crue d on those funds. -2- Oc tob e r 2 00 0, sh e be c ame the fi rm ' s ma na g ingpa rt ne r. Se c on d A m. C omp l. ¶ 3. She he ld t

his position unt il she left the firm in Jul y 2002. Second Am. Compl. ¶ 3. Whil e at F eder

Semo, Clark was a

"pa rticipant" in the firm' s Retirement Plan. Second Am. Compl. ¶ 3; see also 29 U.S.C. § 1002(7) (de fining"pa rticipant" ). F eder

Semo was both the "pla n sponsor" and " plan administrator" of the Retire ment Plan. Second Am. Compl. ¶¶ 4-5; see also 29 U.S.C. § 1002(16)(A) (def ining " plan administrator" ); id. at § 1002(16)( B) (def ining "pl an s po ns or"). Th e P lan was a ty pe o f "defi nedben efi t p lan " term ed a "cas h b ala nce p lan ." See De fs.' Mem. in Supp. of Mot. for Summ. J . (" Def s.' Mem." ) [Docket Entry 41], Defs.' Statement of Undisputed Mate rial F acts (" Def s.' SOF" ), Exhibi t 6 (Fe der, Semo & Ba rd Retirement Plan and Tr

ust Sum mary

Plan Descr iption ("Summary Plan Descr iption")), P0226. T h i s ty p e o f p l an "d ef

i n es b en ef

i t s fo r e ac hP art i ci p an tb y re fe re n ce t o th e P art i ci p an t 's hy pothetical ac count." I d. Ba sed on the va lue of this acc ount, Fede r Semo would ca lculate a n 1 individual's re tirement bene fits. Under the terms of the Retirement Plan, re tirement bene fits were distributed primarily as a " straig ht life annuity ," f or which r egular monthly pay ments would be made to the participa nt afte r the pa

rticipant re ache d retire ment ag e. See id. at P0229. Neverthe less, the Plan permitted pa rt ic ipa nts to w a ive the str a ig ht l if e annuit y , a nd ins te a d r e c e ive re tir e me nt b e ne fi ts a s " a lum p-3-

sum pay ment or . . . installments over a de signated per iod of time." I d. Participants who wa ived the annuity

would obtain benef

its equal to the ac tuarial e quivalent of their stra ight life annuity
. I d. As plan administrator, F eder Semo retaine d the authority to "de termine a ll questions relating to the e ligibility

of an Employee to pa

rticipate in the Plan," to "c ompute . . . the amount and kind of be nefits to which any Participant shall be e ntitled," to " car ry [] out the fundingpolicy
and the me tho d o f f

un din g ," and

to i nte rp re t pr ov isi on s o f t he Re tir e me nt P lan. F e de r S e mo Retirement Plan Ter

ms at Sec. 12.2. The f

irm also had the powe r to amend the Retirement Plan, see id. at Sec. 14.1, and to ter minate the Retireme nt Plan at any time, see id. at Sec . 14.3. Moreove r, pursua

nt to the Retirement Plan, Fe der Semo wa s require d to make the c ontributions
nece ssary "to maintain the Plan on a sound actua

rial basis and to mee t minim um funding standards a s presc ribed by any applicable law." I d. at Sec. 4.1. Exe rc isi ngits a

uth or ity un de r t he Re tir e me nt P lan, F e de r S e mo a me nd e d o r o the rw ise chang ed the Retire ment Plan throug hout its l ife. Seve ral of those chang es ar e re levant to the claims Clark asse rts in this action. First, in October 1998 the firm cha

ng ed the wa

y it classified
e mp l o y e e s f

o r p ur p o s e s o f c r e d i t i n gth e i r

a c c o un t s . S e e P l
. ' s O p p ' nt o D e f s . ' M o t . f o r S um m . J. (" Pl.'s Opp' n") [Docket Entry 58], P l.'s Stateme nt of Undisputed Mater ial Fa cts (" Pl.'s SOF" ), Ex hibit 103 (Amendments to the Fe der, Semo Retire ment Plan), P0064-0066 (Third Ame ndment to the Fe der Semo Retire ment Plan). This amendment c reated four groups of e mploy ees, e ach of which re ceive d a diffe rent a nnual cr edit to their hy

pothetical ac count -- te rmed a n acc ount cre dit. The a ccount c redit wa s expressed as a perc entag e of a

n employ ee' s y ear ly

compensation: Group A: All par

ticipants who wer e Class A shar eholder s of the firm a nd who-4-

we re b o rn p ri o r t o J an u ary 1 , 1 9 5 0 , re ce i v eda c re d i to f 4 5 % o f th ati n d i v i d u al 's ye ar l y s a l ar

y. Group B : All participants who we re Class A sha reholde rs of the f

irm and who we re b o rn af

t er J an u ary 1 , 1 9 5 0 , re ce i v eda c re d i to f 2 0 % o f t h ati n d i v i d u al 's ye ar l y s a l ar

y. Group C: All participants who we re e ither Class A or Class B share holders of the firm and who w ere born af ter January

1, 1950, rec eived a

cre dit of 10% of that i n d i v i d u a l ' s ye ar l y s a l ar

y. Gr ou p D : A ll p art ic ipa

nts wh o w e re no t sh are ho lde rs of the fi rm re c e ive d a

c re dit o f 8 % o f th ati n d i v i d

u a l ' s ye ar l y s a l ar

y. I d. at P0065-0066. Thus, by its plain terms, the amendment indicated that Class A share holders who wer e born a fter January 1, 1950, could be c lassified in either G roup B or Group C. Second, F eder

Semo corre cted this ambiguity in a 2003 re statement to the 1998 amendment. See Pl.'s SOF, Exhibit 139 (Deposition of W illiam Anspach (" Anspac h Dep." )), 84:12-86:10. After

2003, Group B comprised " all participa nts who are Class A share holders . . . and who we re bor

n on or af ter January

1, 1950." F eder

Semo Retirement Plan Terms at Sec. 5.1(d). Gr oup C comprised " all participa nts who are share holders . . . and a re not c overe d by Groups A or

B." I d. In other wor ds, after the 2003 re statement, Class A share holders born on or aft er J anu ary

1, 19 50 , co ul d b e cl ass if

iedon ly in Gro up B. Third, in September 2003 F eder Semo amended the Retirement Plan to fre eze the ac crua l of future retire ment benef its. S econd Am. Compl . ¶ 11; see a lso Defs.' SOF, Exhibi t 10 (Dec l. of Mark C. Nielson (" Nielson Dec l.") ), ¶ 4 & Ex hibit A (Sept. 5, 2003 amendment fr eezing Retirement Plan). Four th, in J uly 2005 the firm cha

ng ed whe n an individual could obtain his or her retire ment benef

its. S ee id. at ¶ 7. Prior to J uly 2005, a for

mer e mploy ee who had not y et-5-

re a c he d r e tir e me nt a g e c ou ld o bta in h is b e ne fi ts o nly on the fi ve -ye ar a

nn ive rs ary

of his termination of employ

ment. Second Am. Compl. ¶ 8. The July 2005 amendment, howe ver, pe rm itt e d e mpl oye e s who we re sh are ho lde rs of F e de r S e mo o n o r b e fo re De c e mbe r 3 1, 20 04 , to take their distributions immediately . See Nielson De cl. at ¶ 7. The firm adopted this ame ndment in part bec ause the firm had lost its larg est client in J uly 2005, "c aus[ing] imm ediate c oncer n with reg ard to the f

uture viability

of the F irm." I d. at ¶ 6. Finally , in September 2005 F eder Semo terminated the Retire ment Plan. See id. at ¶ 8. "T h[e] decision wa s made a fter it bec ame c lear . . . that the Fir

m would have to ce ase pr oviding profe ssional service s to the public as of Septembe r 30, 2005." I d. Although the firm ce ased the active pr actice of law, it appa rently continues to existas a c orporation. Second Am. Compl. ¶ 4. In ear ly September 2005, F eder

Semo notified Clark that it had suspended the Retirement Plan's distribution restrictions, and pr ovided her with a distribution form and a summary of her benef its. S ee D efs.' SOF, Exhibi t 9 (Recor d of Clark' s Be nefit Appe al), D0001- D0009 (Sept. 2, 2005 letter fr om Fede r Semo to Denise Clark) . The distribution form permitted Clark to ele ct
sever al ty pes of a nnuities or a lump sum pay ment. See id. at D0005. Be fore Clark completed the benef its election form, F eder

Semo notified her that it had terminated the Retirement Plan, and that " all benef its will be distributed." I d. at D0021 (Sept. 30, 2 0 0 5 l et t er

fr o mFe d er

S em o t o De n i s e C l ark ). As wi thi t s p re v i o u s n o t i fi ca t i o n , Fe d er S em o 's September 30, 2005 le tter included a statement summarizing he r bene fits. See id. at D0024 (Statement of B enef

its for Denise Clar

k). The statement indicated that Clark was e ntitled to a str a ig ht l if

e annuit y c omm e nc ingat th e no rm a l r e tir e me nt d ate of $4 ,8 60 .5 5 a

month, or

a lum p sum pay ment of $166,541.71. Althoug h the lump sum actuaria l equivalent of he r straight life-6-

annuity was $312,380.83, the notifica tion informed her

that all participa

nts' be nefits had be en pro
rata re du c e d to matc h th e Re tir e me nt P lan' s a sse ts. Se e id. at D 00 22 (" [E]a c h Pa rt ic ipa nt' s lump
sum ha s b e e n c a lc ulate d .
. . and the n p ro po rt ion ate ly

re du c e d s o th at th e a g g re g ate amou nt p a id equals the trust a ssets.") . Clark elec ted the lump sum pay ment of $166,541.71, see id. at D0061- 00 62 (D e nis e Cla

rk e le c tio n f

or m) , b ut, be lie vin gsh e wa s e nti tle d to mor e , r e se rv e d th e ri g ht t o pursue a ny differ ence betwee n the distribution and the full value of he r ac crue d benef its, see id. at D0073-0074 ( Appea l of Be nefit Calculation and Plan Te rmination). Clark appe aled F eder

Semo's c alculation of he r lump sum pay ment to the firm' s Boa

rd of Direc tors -- c omposed of Joseph Semo, Howard B ard, a nd Mark Nie lson -- see king $145,839.12, the dif fe re nc e be tw e e n $ 31 2, 38 0. 83 and $1 66 ,5 41 .7 1. Se e id. at D 00 73 -7 4. In h e r b e ne fi t appea l, Clark articulated seve ral re asons for he r position, and reque sted additional information explaining how the f

irm had ca lculated he r lump sum pay ment. The B oard c onsidered the issues raised in Clark' s appea l, consulting with the Retire ment Plan's outside c ounsel and outside
ac tu ary , an d

d en i edh er

ap p ea l
. S ee Ni el s o nDe cl
. at¶¶1 0 -1 1 , 1 3 ; s ee al s o R ec o rdo f C l ark 's B e ne fi t App e a l at D 01 03 -0 10 9 ( De c . 1 4, 20 05 Re sp on se to D e nis e Cla rk ' s App e a l of

B e ne fi t Calculation). The firm conc luded that " [b] ased upon [its] revie w and the a nswers a nd inf or matio n p ro vid e d, " a s w e ll a s " Ms. Cla rk ' s r e fu sa l to pr ov ide any inf or matio n th at su

pp or ts her c laim of an incor

rec t benef it calculation," her " benef it under the Plan wa s calc ulated
corr ectly ." Re cord of

Clark' s Be nefit Appe al at D0109. The firm also re sponded to two furthe r inquiries from Clark r eg ardingher be nefit ca lculation. See id. at D0110- D0118 (Jan. 6, 2006 letter fr om Clark' s counsel to Will iam Anspac h and Joseph Semo and response) ; id. at D0119- D0122 (June 13, 2006 letter fr om Clark' s counsel to Will iam Anspac h and Joseph Semo and-7-

response ). Unsatisfied w ith the responses she rec eived, Clark br oug ht this action. II. The Cl aim s in t his C as e Cla rk a sse rt s f our t he or ie s o f r e c ov e ry

in t his c a se . F ir st, sh e c onte nd s th at F e de r S e mo improperly

g rouped he r for

purposes of he r ac count cr edit, there by understatingher r etireme nt b en ef i t s b y 4 1 %. S ee P l
. 's Op p 'nat1
. S ec o n d , s h e s u b m i t s th atFe d er

S em o v i o l at edE R I S A's anti-cutba ck rule , 29 U.S.C. § 1054(g) , when it proportionate ly reduc ed the a g g reg ate amount distributed to Pl an par

ticipants to match the Plan' s assets. Second Am. Compl. ¶ 27. Third, she argues that the Retire ment Plan's f iduciarie s failed to " use re asonable actua rial assumptions for interest and the expected re tirement ag e in fundingthe plan." Pl.'s Opp' n at 2. And four th, she op ine s th at th e Re tir e me nt P lan' s f idu c iari e s f

a ile d " to c omp ly

wi th t he te rm inatio n r e str ic tio ns in Tr e a s. Re g . 1 .4 01 (a )( 4) -5 wh ic h w ou ld h ave pr e se rv e d o ve r $ 70 0, 00 0 f or dis tr ibutio n to participa nts." I d. Cla rk a sse rt s th e se the or ie s e ith e r a s c omp on e nts of he r c la im f

or ind ivi du a l be ne fi ts pursuant to 29 U.S.C. § 1132(a)( 1)(B ) or a s part of he r der ivative claim for brea ch of f

iduciary duty pursuant to 29 U.S.C. § 1132(a)( 2). B eca use the pa rties dispute how her

theories should be classified a s claims, eac h theory ' s proper classification will be addresse d wher e appr opriate. AN AL YSI S I. Im pr ope r G r oupi ng Clark contends that Fede r Semo improperly g rouped he r for

purposes of de termining what per centa g e of he r y ear ly compensation would be cre dited to her re tirement ac count. Acc ordingto Clark, beca use she be came a Class A shar eholder in March 2000, the 1998 amendment to the Retire ment Plan require d Fe der Semo to cla ssify her in Gr oup B, a

nd there fore-8-

cre dit her ac count at 20% of her year ly

compensation for the plan year s endingin 2000, 2001,
and 20 02 . I d. at 14 -1 5. She argue s, ho we ve r, tha t F e de r S e mo i mpr op e rl y

c la ssi fi e d h e r i n Group C duringthose plan y ear s, and there fore she re ceive d an ac count cr edit of only 10% of he r y ear ly compensation. See id. at 15. Even so, Clark obse rves that dur ing he r bene fit appea l, the Retirement Plan' s outside actuar y , Dennis Redding ton, rec og nized that Cl ark ha d been i n co rr ec t l y

cl as s i fi ed
. S ee i d
. Ac co rd i n g t o h er , "R ed d i n gt o nre co m m en d edth at. . . M s . C l ark 's . . . benef its be fully

corr ecte d from Mar ch 2000 for war d to refle ct the applica ble pension classification." I d. Neve rtheless, she a sserts that Fe der Semo did not corr ect he r bene fits even afte r re cog nizi ngits error. I d.; see a lso Record of Clar k' s Be nefit Appe al at D0106 ( Dec . 14, 2005 Response to Denise Clar k' s Appea l of Be nefit Calculation). For its part, Fe der Semo doe s not contest that Clark was c lassified in Group C eve n afte r she bec ame a

Class A share holder. Rather , the firm sug g ests that classifying Clar k in Group C
was a rea sonable de cision based on the la nguag e of the Plan's 1998 a mendment. See De fs.' Mem. at 22. Ac cordingto Fede r Semo, the 1998 ame ndment ambiguously define d both Group B and Gr oup C such that a Class A shar eholder like Clark could fa ll within either g roup. See Record of Clark' s Be nefit Appe al at PR074 (Nov. 4, 2005 email fr om Wi lliam Anspach to Jos eph Semo) (" The proble m with the Third Amendment is that there appea rs to be a dr aftingerr or and the def initions of Class B a

nd Class C are unc lear .") . Fe der Semo ther efor e posits that Clark
c ou ld r e a so na

bly have be e n c la ssi fi e d in

e ith e r gro up . Se e De fs .' Me m. at 22 . F e de r S e mo appar ently

also conc luded that the 2003 re statement to the 1998 ame ndment corr ectingthe ambiguity did not apply

to Clark retroa ctively . Record of Clark' s Be nefit Appe al at PR074 (Nov. 4, 2005 email from William Anspach to J oseph Semo) (" Since Denise was g one by [t he time the-9-

1998 amendment wa s corr ecte d], t he re statement does not af fec t her." ). A. Standard of Re view Clark pre sents her imprope r g roupingtheory as par t of her de rivative bre ach of fiduciar y duty claim pursuant to 29 U.S.C. § 1132(a) (2). That is incorrec t. A claim broug ht under sec tion 11 32 (a )( 2) pr ov ide s r e lie f o nly fo r t he pla n it se lf and no t f or ind ivi du a l be ne fi c iari e s. Se e Ma ss. Mut. L if e Ins . Co . v . Ru sse ll, 47 3 U .S. 13 4, 14 2 ( 19 85 ). Any re c ov e ry in s uc h a n a c tio n is restore d to the retire ment plan. See Gla nton ex rel. AL COA Prescr iption DrugPlan v. Advanc ePCS I nc., 465 F .3d 1123, 1126 (9th Cir. 2006) (" ERI SA give s plan bene ficiar ies nothing [wh e n th e y

su e on be ha lf of the pla n]; a ny mon e tary re c ov e ry g oe s to the pla

n[] . .
. . " ); se e a lso 29 U.S.C. § 1109. Hence , a plaintiff " may bringa cla im under [section 1132(a) (2)] in a

' re pr e se ntativ e c a

pa c ity on be ha lf of the pla n a s a wh ole ,' re qu e sti ng , f

or e xamp le , th at a brea chingfiduciar

y return f unds to the plan." Cook v. Campbell, 482 F. Supp. 2d 1341, 1357 (M.D. Ala. 2007) (quotingRussell, 473 U.S. at 142). But a pla intiff may not seek to re cover

for herse lf under se ction 1132(a) (2). Her e, Clark' s improper groupingtheory does not alleg e an injury to the Retirement Plan
as a whole -- it alleg es only an injury to her. Were she to preva il on her cla im, any rec overy would nece ssarily

g o to her, a

nd to her a lone. Ther efor e, Clark' s improper groupingtheory cannot pr ocee d pursuant to sec tion 1132(a)( 2). See L ee v. B urkhar t, 991 F.2d 1004, 1009 (2d Cir . 1 99 3) (" Rus se ll the re fo re ba rs pla int if fs fr om s uin gun de r [s e c tio n 1 13 2( a )( 2) ] be c a us e plaintiffs are seekingdamag es on their own be half, not on beha lf of the Plan." ). It must proceedTo be sure , at the motions hearingClark sug g ested that he r improper g roupingtheory 2 could be c hara cter ized as a der ivative claim bec ause some othe r par ticipants in the Retirement Plan may also have been imprope rly g rouped. B ut Clark did not assert any claims on beha lf of these individuals in her c omplaint. Even if she ha d, that a fe w spec ific individuals may have suffe red a particula r injury does not demonstrate that the Retirement Plan as a whole suff

ere d an i n j ur y. I t is undisput ed that the plan a dminist rator ha d such discre tionary authority here . See 3 Fe der Semo Retire ment Plan Terms at Sec . 12.2. -10- as a c laim for individual benef its under sec tion 1132(a)( 1)(B ). 2 Pursuant to the Supreme Court' s decision in Fire stone Tire & Rubber Co. v. Br uch, 489 U.S. 101 (1989), a c ourt revie ws a sec tion 1132(a)( 1)(B ) cla im for individual benef its under a defe rential standa

rd of r eview when " the bene fit plan g ives the administrator or fiduciar y di scr eti on ary

aut ho ri ty to det erm in e el igi bi li ty

for ben efi ts or t o co ns tr

ue t he t erm s o f the p lan ." Fire stone, 489 U.S. at 115. The D.C. Circuit def ines the F irestone standa

rd as one of 3 "r easona bleness." Wage ner v. SB C Pension Bene fit Plan-Non B arg ained Program, 407 F .3d 395, 402 (D.C. Cir. 2005) (c iting B lock v. Pitney Bow es, Inc., 952 F .2d 1450, 1452, 1454 (D.C. Cir. 1992)); ac cord Moor e v. CapitalCare , Inc., 461 F .3d 1, 11 (D.C. Cir. 2006). This Court theref ore revie ws Fe der Semo' s classification of Clark in Group C for " rea sonablene ss." In o rd e r f or the Court

to d e te rm ine if

the fi rm ' s d e te rm inatio n w a s r e a so na ble , " ' it i s important for the pla

n to provide a f

inal, fully considere d, and re asoned e x planation for the court to evaluate .' " H all v. Nat' l R.R. P asseng er Corp., 559 F . Supp. 2d 38, 48 (D.D.C. 2008) (quoting Commc'ns Worker s of Am. v. AT& T, 40 F.3d 416, 433 ( D.C. Cir. 1994)). " A plan administrator' s determination will be upheld ' so long a s it is reasonably supported by

the
a dmi nis tr ativ e re c or d. ' " I d. (q uo tin gMo ble y

v. Cont' l Ca s. Co. , 4 05 F . Su pp . 2 d 4 2, 48 (D .D .C. 20 05 )) . A nd

the Court mus t " re vie w E RI SA- pla n b e ne fi t de c isi on s o n th e e vid e nc e pr e se nte d toClark asser ts this t heory

for the f irst time in her opposition to defendants' motion for 4 summary judgme nt. See Pl.'s Opp' n at 1. Althoug h defe ndants sug g est in their openingbrief that Clark' s failure to present this theory duringthe administrative re view proc ess pre cludes he r fr om a sse rt ingit i n li tig atio n, se e De fs .' Me m. at 21 , th e y se e m to have a

ba nd on e d th is a

rgume nt i n both their reply

brief a nd at the motions hearing . And with g ood rea son: section 1132(a) "doe s n o tre qu i re ei th er

i s s u e o r t h eo ry

ex h au s t i o n ; i tre qu i re s o n l y cl ai mex h au s t i o n . " W o l f v
. Na t 'l Sho pme n Pe ns ion

F un d, 72 8 F .3 d 1 82 , 1 86 (3 d Ci r. 19 84 ); a c c or d V a ught v . Sc ott sd a le Hea lthcare Corp. Hea lth Pl an, 546 F .3d 620, 631 (9th Cir. 2008). The Court normally

might be tr oubled by

the see ming inconsistenc y in ERI SA law that 5 p erm i t s a p l ai n t i ff

t o art i cu l at e ath eo ry

o f r ec o v ery

fo r i n d i v i d

u al b en ef i t s n o tp re s en t edd

uri n g a pla int if f' s b e ne fi ts a

pp e a l, b ut n e ve rt

he le ss c on fi ne s ju dic ia l r e vie w t o th e e vid e nc e pr e se nte d in the re cord of

that benef

it appeal. B ut Fede r Semo' s insist ence that it "ca ref ully considere d and dealt with the issue" resolves a ny such conc erns he re.

-11- the plan administrators, not on a r ecor d later ma de in another forum." Bloc k, 952 F.2d at 1455. Acc ording ly , the Court can r eview Clar k' s improper groupingtheory based only

on the evidenc e F e de r S e mo' s B oa

rd of Di re c tor s c on sid e re d d

ur ingCla rk ' s b e ne fi t a

pp e a l. 4 B
. Cla

rk ' s Cl a ssi fi c atio n in

Gr ou p C Although Clar

k did not present her

improper groupingtheory to Fede r Semo duringher benef it appeal, the f

irm states that it "c are fully considere d and dea lt with the issue with the advice of the Plan' s counsel and the input of the Plan' s actua ry ." D efs.' Mem. at 22 (c iting Record of Clark' s Be nefit Appe al at PR074-PR089, P R157). That is, Fe der Semo submits that 5 the administrative re cord of Clark' s benef

it appeal should conta in their " fully considere d and
rea soned" explanation for the dec ision ini tially to classify

Clark in Group C and to not cor rec t that classification after the 2003 restate ment. On the basis of that administrative rec ord, howe ver, the Court cannot conc lude that Fe der Semo's position reg ardingClark' s g roupingwas " rea sonable." Fe der Semo ha s not marshaled
any e vid e nc e ind ic atin gwhy

Cla rk wa s c la ssi fi e d in

Gr ou p C a ft e r s he be c ame a

Cla ss A-12-

share holder in Mar ch 2000. Althoug h the Court ag ree s with Fede r Semo that the 1998 amendment c ontained an a mbiguity that permitted the fir

m to classify

Clark in either G roup B or Group C, the mer e pre sence of an a mbiguity is not a "f

inal, fully considere d, and re asoned explanation for the cour

t to evaluate.' " H all, 559 F. Supp. at 48. Instead, F eder Semo must poi nt to a place in the administrative re cord e videncinga re asonable decision to initially classify Clark in Group C due to the ambiguity . I t has not done so. To be sure , the Court rec og nizes the inherent diffic ulty in providing e vidence explaining
a de c isi on ma de in 2 00 0. Ne ve rt

he le ss, it i s und isp ute d th at F e de r S e mo c on sid e re d th e pr e c ise question why

Clark was c lassified initially in Group C duringher be nefit appe al in 2005. In a November

9, 2005 email, Will iam Anspac h asks J oseph Semo and How ard B ard why a June 6, 20 00 me mor and

um w ou ld " state that D e nis e and Ho wa rd are me mbe rs of

Cla ss C and

e nti tle d to a 10% c ontribution" whe n they beca me Class A share holders in Marc h 2000. See Rec ord of Clark' s Be nefit Appe al at PR157. Absent from the a dminist rative r ecor d is any response from ei th er S em o o r B ar d
. Ins h o rt , th e P l an 's o u t s i d e c o un s el ra i s edth e qu es t i o nan i m at i n g C l ark 's imp ro pe r gro up ingthe or

y duri nghe r b e ne fi t a

pp e a l, b ut t

he re is n o e vid e nc e that F e de r S e mo resolved it either

duringthe appe al or e arlier . On the basis of this re cord, the Court cannot conclude that Fe der Semo' s decision to initially classify Clark in Group C was r easona ble. Nor c an the Court conc lude that the firm' s decision not to retroa ctively apply the 2003
re s t at em en to f t h e 1 9 9 8 am en dm en tt o C l ark wa s re as o n ab l e. An s p ac hs t at edd uri n g C l ark 's b e n e f it a p p e a l t h at " [s ]i n c e D e n is e w a s g o n e b y [th e ti me th e 1 9 9 8 ame n dme n t w a s c o r r e c te d ], the re statement does not af fec t her." Record of

Clark' s Be nefits Appea l at PR074 (Nov. 4, 2005 email from William Anspach to J oseph Semo). B ut a statement of the Plan's outside attorneyI t is undisput ed that Clark a nd Ba rd we re both Class A shar eholder s born af ter January 6 1, 1950, and henc e subjec t to the same cla ssification. -13- do e s n ot e vid e nc e the re a so ns why F e de r S e mo a do pte d th is p os iti on . In f a c t, t he re c or d is devoid of a

ny explanation why

Clark' s employ

ment status was dispositive of whether or not she
c ou ld o bta in t

he be ne fi ts o f t

he 20 03 re state me nt. F ur the rm or e , th e re is e vid e nc e in t he a dmi nis tr ativ e re c or d to su g g e st t hat th e fi rm

sh ou ld have c orre cted he r ac count cr edit pursuant to the 2003 re statement for at least the 2002 pla

n y ear . In Fe der Semo' s response to Clark' s benef it appeal, the f

irm noted that " Howar d Ba rd re ceive d the same [acc ount cre dit] perc entag e as Ms. Clark" for the 2000, 2001, a nd 2002 plan y ear s. See Record of Clark' s Be nefit' s Appea l at D0106 (De c. 14, 2005 Response to De nise Clark' s Appea l of B enef it Calculation). Neve rtheless, a n individual account wor

ksheet for Howar d Ba

rd indicates that the f

irm retroa ctively

classified him in Group B for the pla n y ear endingin 2002. Se e Pl. ' s SO F , E xhibi t 10 1 ( Expe rt Re po rt of Cla ud e Pou lin

(" Pou lin Re po rt " )) , E xhibi t G (Individual Account Cre dit W orkshee t for Howa rd B ard) . There fore , it appear s from the re cord th at , atl ea s tfo r t h e 2 0 0 2 p l an y ea r, C l ark an d Bardwe re tre at edd i ff

er en t l y , d es p i t e F ed er

S em o 's insistence to the contr ary

in its response to Clark' s benef it appeal. Absent any

explanation of 6 thi s in c on sis te nc y , th e Court c ann ot c on c lud e a s a

matte r o f l aw that Cla

rk wa s p ro pe rl y classified f

or purpose s of her

acc ount cre dit. I t is Cl ark, the n, and not Fe der Semo a nd the Plan, who has the be tter of the imprope r g roupingclaim for individual bene fits under sec tion 1132(a) (1)( B)
. II. Vi ola ti on o f ERI SA' s A nt i- Cut bac k Ru le Clark next contends that Fe der Semo violated ERI SA's a nti-cutbac k rule whe n it offer edDef endants sug g est that Clark' s anti-cutbac k rule c laim is a component of he r cla im for 7 ind ivi du a l be ne fi ts p ur su ant t o 2 9 U .S. C. § 11 32 (a )( 1) (B ), and the re fo re mus t be re vie we d o nly for r easona

bleness. See D efs.' Reply in Supp. of Mot. for Summ. J . [Docket Entry 62], at 6. Not so. Be cause Clark' s anti-cutbac k theory alleg es that F eder

Semo's a ctions violated a statutory pr ov isi on , th e Court

re vie ws the a lle g atio n d e no vo . Se e Wet zle r v . I ll. CPASoc . & F ound . Re t. Income Plan, 586 F .3d 1053, 1057 (7th Cir. 2009). -14- h e r a l ump s umb e n e f

i te qu a l t o o n l y 5 3 % o f

th e p r e s e n tv a l u e o f

h e r s tr a i g h tl i f

e an nu i ty. 7 Acc ordingto Clark, the Retirement Plan off ere d participa

nts the option of taking the ir bene fits as a straight life annuity

or as " a lump sum distribut ion equal to 100% of the prese nt value of the annuity benef it." Pl.'s O pp' n at 36; see a lso Sum mary Plan Descr iption at P0229. But after Fe der Semo terminated the Retire ment Plan in 2005, Cl ark submits that a par ticipant could no long er elec t a lump sum pay

ment equal to the pr esent va lue of his annuity benef it. I nstead, a participa nt's lump sum pay

ment option was worth only 53% of the pr esent va lue of the a nnuity
. By reduc ing the value of

a par ticipant' s lump sum pay

ment, Clark ar gues, F eder Semo violated ERI SA's a

nti-cutbac k rule. Th e Court

is n ot p e rs ua de d. ERI SA' s a nti -c utb a c k r

ule pr ov ide s th at " the a c c ru e d b e ne fi t of a pa rticipant under

a plan may

not be dec rea sed by

an ame ndment of the plan." 29 U.S.C. § 1054(g )(1) . An ac crue d benef it is a particular

ty pe of be nefit that is "e x presse d in the form of a n annual be nefit commenc ing at normal retire ment ag e." I d. at § 1002(23)( A). In other wor ds, an
ac cr u edb en ef i ti s an an nu i ty . A l ump s ump ay m en th o we v er

-- th e b en ef

i tati s s u e i nC l ark 's anti-cutba ck alleg ation -- " is not an acc rued be nefit as that ter m is defined in 29 U.S.C. § 1002(23)." Steiner Corp. Ret. Plan v. J ohnson & H igg ins of Cal., 31 F.3d 935, 939 (10th Cir. 1994). Instead, a

lump sum pay

ment is considere d an optional form of benef it under ERI SA. See Wetzler, 586 F.3d at 1059 (" A plan par ticipant' s ability

to take a lump-sum distribution ofFo r p urp o s es o f t h e r u l e, a p l an am en dm en ti n cl u d es ch an ges re s u l t i n g fr o ma p l an 's 8 termination. See Tr eas. Reg . 1.411(d)- 3(a) (1). -15- benef its is an 'optional for

m of bene fit' as def

ined by the anti-c utback pr ovision of ERI SA.") ; Steiner Corp., 31 F .3d at 939 (" [A] lump sum benefit is an optional form of be nefit . . . ." ). Op tio na l f

or ms o f b e ne fi t are no t e xplic itl y pr ote c te d und e r s e c tio n 1 05 4( g )( 1) . Und e r 2 9 U .S. C. § 1 05 4( g )( 2) (B ), ho we ve r, a pla n ame ndme nt " e lim inatin gan o pti on a l f or m of be ne fi t . . . [is ] treated as re ducingacc rued be nefits." (empha sis added). There fore , a plan amendment that 8 eliminates an optional for m of bene fit such as a

lump sum pay

ment violates the anti-c utback r ule. Her e, Clark doe s not contend that the Retire ment Plan's te rmination eliminated her r ight to take a lump sum distribution. Nor could she, for she in fac t selecte d and re ceive d a lump sum pay ment at the time of he r distribution. Instead, she a sserts only that the Plan' s termination redu ced t he v alu e of h er l ump s um pay men t. Butth e pl ain lan guage of s ect io n 1 05 4(g)(2 )(B) only protec ts ag ainst amendments eliminatingoptional forms of bene fits. Amendments that
mere ly reduc e the va lue of those be nefits do not trig g er a nti-cutbac k protec tion under sec tion 1154(g )(2) (B ). See Steiner , 31 F.3d a t 940 (" ERI SA [ does not] equate[] the re duction of an optional benef

it with a reduc tion in accr ued bene fits, and it is only the re duction of ac crue d b en ef i t s th ati s n o tp erm i t t edb y th e s t atu t e[ ]
. ")
. He n ce , b ec au s e t h e R et i re m en tP l an 's te rm inatio n d id n ot e lim inate Cla rk ' s lump s um o pti on a l be ne fi t, i t di d n ot v iol ate the anti

cutbac k rule. Depa rtingfrom the plain languag e of the statute, Clark ar gues that a pla n amendment
mere ly reduc ing the value of

an optional form of

benef it may also trig g er ERI SA's a

nti-cutbac k rule. To support this position, C lark points to a Depa rtment of Tre asury

regulation promulgatedSection 411(d)( 6) is in all material re spects identica l to ERI SA's a nti-cutbac k rule, a

nd 9 the re gulations promulgated under it are e qually

applicable to ERI SA's a

nti-cutbac k rule. See 53 F e d. Re g . 2 60 50 , 2 60 53 (Jul y 11 , 1 98 8) (" Th e re gulatio ns un de r s e c tio n 4 11 are a lso a pp lic a ble to provisions of [ ERI SA] Title I .") ; acc ord Cent. L abore rs' Pension Fund v. He inz, 541 U.S . 739, 747 (2004). -16- under 26 U .S.C. § 411(d)(6)(A ) that she c ontends interpre ts the phrase "e liminating an optional form of be nefit" to include re ducingthe value of an optional form of

benef it. See 26 C.F.R. § 1. 41 1( d) -4 at A -1 (a ). In r e le va nt p art , th e re gulatio n p ro vid e s th at op tio na l f or ms o f b e ne fi ts, " to 9 the extent they

have a ccr

ued, . . . ca

nnot . . . be re duced, e liminated, or made subjec t to employ er discretion except to the extent permitted by regulations." 26 C.F.R. § 1.411(d) -4 at A- 1(a) (empha sis added). To the extent that section 1.411(d)- 4 protec ts an optional form of be nefit fr om a re duction in value, howe ver, it is inconsistent with the plain languag e of ERI SA's a nti-cutbac k rule. A regulation that conflicts with "the plain languag e of the statutory textexempts courts from any obligation to defer to it." Br own v. Gar dner, 513 U .S. 115, 122 (1994); Chevron U.S.A. Inc. v. Natura l Res. Def. Council, Inc., 467 U.S. 837, 842 (1984) ( "I f the intent of Cong ress is clea r, that is the end of the matter . . . ." ); Am. Fe d' n of Gov' t Employ ees, A FL -CI O v. Gate s, 486 F.3d 1316, 1321-22 (D.C. Cir. 2007) ( "I f the re levant statutory languag e is plain but is inconsistent with the DoD re gulations, we must hold the regulations invalid."). By its terms, 29 U.S.C. § 1054(g)( 2)(B ) conf irms that only

plan amendme nts "e liminating
an o pti on a l f

or m of be ne fi t . . . s ha ll b e tr e ate d a s r e du c inga c c ru e d b e ne fi ts. " Ha d Co ngre ss intended for

the anti-c utback r

ule to prohibit plan amendments mer ely reduc ing the value of

an optional form of be nefit as we ll, it could have included languag e to that ef fec t in section 10 54 (g )( 2) (B ). Ind e e d, Con g re ss d id j us t th at in se c tio n 1 05 4( g )( 2) (A ), a

pr ov isi on

of the anti

-Neither party contends that Clark' s lump sum pay ment is an " ear ly

retire ment benef

it." 10 In her c omplaint, Cl ark a lso alleg es that F eder Semo violated ERI SA's disclosure 11 require ments by

failingto include re quired infor mation in the Retirement Plan' s summary plan descr iption. At the moti ons hear ing, how ever , she indicate d that this alleg ation was not an i n d e p e n d e n tb a s i s o f

r e c o v e r y, b u ti n s t e a d

s u p p o rt e d h e r an t i

- c u t b a c k th e o r y. A c c o r d i n g l y, be c a us e the Court

ha s d ism iss e d r e c ov e ry

un de r t he anti -c utb a c k r

ule , it is a pp ro pr iate to d ism iss her disclosure alleg ation as we ll. I n any event, e ven we re Clar

k' s non-disclosure a lleg ation an independe nt basis for re cover y , she has not alleg ed any injury resultingfrom the pur

ported nondisclosure. -17- cutbac k rule re g ardingear ly retire ment benef

its. There , Congr ess stated that " a plan 10 amendment whic h has the e ffe ct of e liminating or re ducingan ea rly retire ment benef

it or a retire ment-ty

pe subsidy

. . . shall be trea

ted as re ducingacc rued be nefits." 29 U.S.C. § 1054(g )(2) (A) ( emphasis adde d). The a bsence of similar " or re ducing " la nguag e in sec tion 1054(g )(2) (B ) cle arly

indicates that Cong ress did not intend to equate the re duction of an op tio na l f or m of be ne fi t w iththe re du c tio n o f a c c ru e d b e ne fi ts. B e c a us e the anti -c utb a c k r

ule only protec ts ag ainst the reduc tion of acc rued be nefits, that the Plan' s termination may have reduc ed the va lue of Clark' s optional form of bene fit does not trig g er a nti-cutbac k protec tion. S um m ar y j u d g m e n tth e r e f

o r e i s a p p r o p r i at e f

o r th e d e f e n d an t s o nC l ar

k ' s an t i

- c u t

b a c k th e o r y. 11 III . De r iva ti ve Br e ac h of F iduc iar y D ut y A lle ga ti ons Clark' s final two theorie s of re cover y -- the Re tirement Plan' s fiduciar ies (1) use d improper a ctuar ial and intere st rate a ssumptions to fund the plan a nd (2) violated va

rious regulations by

permitting two distributions to Pl an par ticipants -- a

re de rivative bre ach of fiduciar y duty alleg ations. For pur

poses of a brea ch of f

iduciary duty claim, " plan fiducia

ries ar e held to a ' prudent man' standard." Foltz v. U.S. News & World Report, I nc., 627 F . Supp. 1143, 11 70 (D .D .C. 19 86 ); se e a lso 29 U. S.C. § 1 10 4( a )( 1) (B ) ( fi du c iary sh a ll d isc ha

rg e dutie s " wi th-18-

the ca re, skill, prudenc e, and dilig ence under the circ umstances then pr evailingthat a prude nt
man ac ting in a like c apac ity and fa miliar with such matters would use in the c onduct of a n enter prise of a like char acte r and w ith like aims"). It is an objective standa rd in which the fiduciar ies " are to be judg ed ' acc ordingto the standards of others ac ting in a like c apac ity and familiar with such matters.' " K atsaros v. Cody , 744 F.2d 270, 280 ( 2d Cir. 1984) (quoting Marsha ll v. Glass/Metal Ass' n, 507 F. Supp. 378, 384 (D. H aw. 1980) ). A. Improper A ctuar ial and Intere st Rate Assumptions Clark contends that the Retirement Plan' s fiduciar ies brea ched the ir duty by using a n incorre ct ac tuarial a ssumption t o deter mine how much the f

irm had to contribute to the Plan. Acc ordingto her, the Retire ment Plan's f iduciarie s funded the Plan ba sed on the a ssumption t hat
m o s tp art i ci p an t s wo u l d

t ak e t h ei r b en ef

i t s as an an nu i ty

atn o rm al re t i re m en tage . S ee P l
. 's Opp' n at 21. This was in er ror, she sug g ests, beca

use only two individuals took t heir re tirement benef its at retireme nt ag e, while other participa nts took their benef

its as a lump sum pay

ment signific antly

befor e re tirement ag e. See id. In her vie w, the Plan fiducia ries' failure to acc ount for how pa

rticipants ultimately

took their bene fits produce d an under funded Plan, ther eby
re su lti ngin a

de c re a se to a

pa rt ic ipa nt' s lump s um p ay

me nt. Cla rk ' s argume nt p re sume s th e fi du c iari e s' a c tua ri a l a ssumpt ion

wa s in c or

re c t be c a us e most participants ende d up takingtheir bene fits before rea chingretire ment ag e. B ut that is not the cor rec t perspec tive from which to view the fiducia

ries' decision re g ardingthe Plan' s actua rial assumption. I ndeed, pa

rticipants took ear ly

benef its only beca use F eder Semo cea sed oper ation and henc e ter

minated the Plan and distributed all of its assets, a n outcome that the Plan fiduciar ies could not have anticipated. I nstead, Clark c an only

preva il on her ac tuarialAs an in iti a l matte r, de fe nd ant' re butta l e xpe rt , I an A ltm an, ave rs that " in s ma ll p lans , 12 wh er e t h e l i ab i l i t i es ar e f

o cu s edo na l i m i t ednumb er o f p ri n ci p al s , a s i n gl e r et i re m en tage a ssumpt ion

is s uf fi c ie ntl y a c c ur ate a s to be a c c e pta ble fo r E RI SA p ur

po se s. " De fs .' SOF , E xhibi t 15 (E xpe rt

Re po rt of I an A ltm an) , 6 . T hat is , a c c or din gto A ltm an, it w a s n ot a br e a c h o f d

uty for the Plan' s fiduciar ies to use a sing le ac tuarial a ssumption -- here that participa nts would take the ir be ne fi ts at r e tir e me nt a g e -- to d e te rm ine ho w t o f un d th e Plan. Cla

rk do e s n ot d isp ute thi s conclusion. -19- assumption theory

by demonstratingthat the ac tuarial a ssumption was incorre ct in light of the Plan's pe rfor

mance befor e the f

irm dissolved. Or, put another way , she ca

n preva il only

if she shows that other e x perie nced individuals would have adopted a differ ent ac tuarial a ssumption g iven the fa cts that wer e bef ore the Plan's f

iduciarie s befor e the f

irm dissolved. She has not done so. Clark offe rs only the expert opinion of Claude Poulin, who 12 sug g ests that the fiducia

ries' actua rial assumption was imprudent be cause their assumptions ig no re d th e fa c t th at mo st R e tir e me nt P lan p art ic ipa nts too k th e ir

be ne fi ts e arl y . Se e Pou lin Report at ¶ 15. B ut this opi nion merely repe ats Clark' s incorre ct pre mise based on hindsig ht: that the fiducia

ries had to use an ac tuarial a ssumption t hat ac counted f or the fir m's f uture dissolution. Poulin does not demonstrate, as he must, that the fiduc iaries' actua rial assumption was incor rec t in light of how the Plan was per formingprior to its termination. Put s imply , Clark has provide d no evidenc e to sug g est that the Plan fiduciar ies' actua rial assumption was inconsistent with the actua rial assumption that another individual " actingin a like ca pacity and fa miliar with such matters" would have a dopted in the same c ontext . Katsar os, 744 F.2d at 280. Summ ary j u d g m e n tf

o r d e f e n d an t s i s th e r e f

o r e a p p r o p r i at e o nC l ar

k ' s a c tu ar i a l a s s ump t i o nth e o r y. Clark' s alleg ation that the fiducia ries bre ache d their duty

by fundingthe Retirement Plan based on a

n improper inter est rate assumption fare s no better. See Pl.'s Opp' n at 22. Clark observe s that after

September 30, 2001, ma

rket intere st rates droppe d, which had the eff ect ofA par ticipant' s lump sum pay

ment was c alculate d by

discounting the total value of that 13 participa nt's lump sum annuity

by the pre vailing ma

rket intere st rate. Ac cording ly , when r ates decr ease d, the value of

the lump sum pay

ment incre ased. See Record of Clark' s Be nefit Appe al at D0022 (Sept. 30, 2005 letter from F eder

Semo to Denise Clark). Even we re the Court to credit Clark' s conclusory alleg ation, she does not explain how 14 the fiducia

ries could have bre ache d their fiducia ry duty when Clark he rself, who was Plan fiduciar y throug h May

2002, raised the interest rate assumption after September 30, 2001. See An sp a c h D e p. 18 4:2 0- 18 5:2 . N or do e s Cl ark

a sse rt tha t th e fa c ts t

he fi du c iari e s a

na ly zed in deter mining the inter est rate assumption chang ed af ter she c ease d to be a f

iduciary . Quite the op po sit e : he r o nly

a lle g atio n is that a ll o f t

he fa c ts n e c e ssa

ry fo r t he Pla n' s f idu c iari e s to de c ide to -20- incre asingthe value of

a par ticipant' s potential lump sum benefit. See id. At the same time, 13 ho we ve r, sh e c onte nd s th at th e fi du c iari e s d id n ot l ow e r t he Plan' s inte re st r ate a ssumpt ion , w ith th e res ul t t hat"th e P lan 's in ter est[ rat e] ass umpt io n . . . in creas in gly di vergedfro m m arke t r ate s. " I d. Acc ordingto Clark, this resulted in signific ant under funded liabilities for the Plan be cause on its termination all participants elec ted to take a lump sum pay

ment befor e re tirement ag e. Once ag ain, howeve r, Clark' s argument proce eds fr om an incorr ect pr emise. She ca nnot demonstrate a

brea ch of f

iduciary duty mere ly by pointing out the fa ct that the Plan was underf unded on its termination -- ERI SA's pr udent man standa

rd does not re quire pre scienc e. Rathe r, sh e mus t sh owthat th e fi du c iari e s ma de inc or re c t de c isi on s a

bo ut t he Plan' s inte re st r ate assumption based on the fa cts prese nted to them prior to the Plan' s termination. Clark has not do ne so . T o b e sure , s he do e s su g g e st that " int e re st r ate s d ro pp e d a ft e r 9 /30 /20 01 and the re is a continuing duty

to reviewsuch assumptions." I d. But e ven to the extent that statement alleg es that the fiducia

ries ac ted imprudently , it does not demonstrate what decisions they made that
wer e incor

rec t measure d ag ainst the objective standa rd g overningfiduciar ies. In any event, suc h a "con clu so ry

all egati on [ ] un supp ort ed b y factual dat a wi ll no t cr eat e a tri abl e is su e of f act ." By rd v. Envt' l Prot. Age ncy , 174 F.3d 239, 248 n.8 ( D.C. Cir. 1999). 14lower the Plan's inter est rate assumption were in place in Septembe r 2001.

Clark sug g ests in her brie f that an A pril 2002 distributi on to Gera ld Fede r wa s also a 15 brea ch of f

iduciary duty . But to the e x tent she pre sses this claim, neither Joseph Semo nor Howar d Ba

rd ar e liable, a s they

did not become f

iduciarie s of the Plan until after Ma y 2002. See 29 U. S.C. § 1 10 9( b) (" No fi du c iary sh a ll b e lia

ble wi th r e sp e c t to a

br e a c h o f f

idu c iary duty under this subcha

pter if suc h brea ch wa s committed before he bec ame a fiduciar y or af ter he c e a se d to be a

fi du c iary ." ). Rathe r, Cla rk wa s h e rs e lf

the fi du c iary

of the Re tir e me nt P lan in April 2002, and ther efor e she w as re sponsible for makingthat distribution t o Fe der. See Def s.' SOF, Exhibi t 4 (deposition of Denise Clar k), 18:17-20. -21- B. Violation of 26 C.F.R. § 1.401(a) (4)- 5 Clark' s final contention is that the Retireme nt Plan's fiduc iaries br eac hed their duty to the Plan b y makin gtw o d istri butio ns to P lan p art ic ipa nts : a De c e mbe r 2 00 2 d ist

ri butio n to L or e tta Fe der a nd a Nove mber 2005 distribution to Gerald F eder
. The Court take s eac h in turn. 15 Th e Re tir e me nt P lan' s f

idu c iari e s ma de a

lum p s um p ay

me nt o f $ 38 1, 90 1. 00 to L or e tta Fe der in De cembe r 2002. Clark c ontends that this dist ribution violated 26 C.F.R. § 1.401(a) (4)- 5, a Tre asury

regulation that restricts the lump sum pay ments available to highly compensated
e mpl oye e s unle ss " [a]f

te r t akin gint o a c c ount p ay me nt t o . . . the re str ic te d e mpl oye e of a ll be ne fi ts p ay a

ble to . . . that r e str ic te d e mpl oye e un de r t he pla n, the va lue of

pla n a sse ts mus t equal or exceed 110 pe rce nt of the value of cur rent liabilities." 26 C.F .R. § 1.401(a)( 4)- 5(b)( 3)(iv)( A). Ba sed on this regulation, Clark asser ts that the distributi on to L oretta F eder "le ft the Plan's f unding e ven fa

rther shor t of 110% of the curr ent liabilities in t he plan year ending September 30, 2003 [sic]." Pl.'s Opp' n at 29. The undisputed e vidence , howeve r, demonstrates that L oretta F eder ' s distributi on satisfied 26 C.F.R. § 1.401(a )(4) -5. In a De cembe r 2002 fax from De nnis Reddington to Fe der Semo, Redding ton calculated the then- curr ent assets a nd-22-

l i ab i l i t i es o f t h e R et i re m en tP l an . S ee P l
. 's S OF , E x h i b i t1 1 6
. He d et erm i n edth atth e P l an 's
as s et s b ef o re th e p ay

m en tt o L o re t t a F ed er

equ al ed$ 1 , 2 0 5 , 7 9 2
. 8 6 , an d th at1 1 0 % o f t h e P l an 's liabiliti es equa led $808,669.00, figures that Clark doe s not challeng e. See id. Redding ton there fore conclude d that L oretta F eder could take he r distribution of $381,901.00 without violating se ction 1.401(a) (4)- 5. Be cause there rema ined funds excee ding 110% of liabilities after the Dec ember

2002 distribution t o L oretta F eder , that distribution does not support C lark' s brea ch of fiducia ry duty claim. Th e Plan' s f

idu c iari e s a lso ma de a

lum p s um p ay

me nt t o G e ra ld F e de r o f $ 22 9, 94 9. 00 in November

2005, which Clark a

rgues violated a

n Interna l Revenue Code r uling r eg arding distributions made to ce rtain " highly compensated employ ees." See Pl.'s O pp' n at 29-30 (c iting Rev. Rul. 92-76 (Aug . 31, 1992). Ac cordingto Clark, Revenue Ruling 92-76 pr ohibited the distribution t o Ger ald Fe der in Nove mber 2005 be cause the rulingrequire s "that the ' acc umulated amount of distributions' to both Mr. and Mrs. F eder less any ' unrestric ted' amounts . . . be
compu tedfor

compari so n wi th th e di st ri bu ti on s b ein g made to ot her p art ici pan ts ontermi nat io n. " Pl.'s Opp' n at 29-30. Clark the ref ore opine s that beca

use " Mr. and Mrs. F eder

had alr eady
rec eived a lmost 80% of the value of their bene fits," Reve nue Ruling 92- 76 prohibited " an
a dd iti on a l di str ibutio n to Mr . F e de r whe n o the r p lan p art ic ipa nts we re re le g ate d to re c e ivi ngon ly 53% of the va lue of their be nefits." I d. at 30. Re ve nu e Rul ing92 -7 6, ho we ve r, is i na pp os ite to C lark ' s a

rgume nt. B y

its pla in t e rm s, the rulingdid not analy

ze whether

a par ticular individual' s distributi ons in past y ear s aff ect the permissible amount of that individual' s distributi on in later year s. Rather, the r uling c onsidered whether a re tirement plan that pe rmitted distributi ons that nominally violated 26 C.F.R. §-23-

1. 40 1( a )( 4) -5 we re ne ve rt he le ss p e rm iss ibl e be c a

us e the pla

n in c lud e d " a de qu ate pr ov isi on s to
se c ur e any

ne c e ssa ry re pa y me nt i n th e e ve nt o f a

pla n te rm inatio n. " Re v. Rul . 9 2- 76 . A nd it discussed the impac t that 26 C.F.R. § 1.401(a)( 4)-5 ha d on plans that had plac ed re strictions on distributions to cer

tain highly

compensated employ ees pur suant to previously -promulg ated regulations at 26 C.F.R. § 1.401-4. See Rev. Rul. 92-76. Ne ither of these subjects, howeve r, encompa sses Clark' s alleg ation, and she points to no other support for her c halleng e to the distribution. S ummary

judgme nt is therefor e appr opriate on Clar k' s alleg ation that the fiducia ries brea ched the ir duty

by approvingthe Dec ember 2002 distribution t o L oretta F eder and the November

2005 distribution t o Ger ald Fe der. CO NC LU SION For the fore g oing r easons, the Court will g rant in par t and deny

in part def

endants' motion for summary

judgme nt. A separ ate Or der a ccompa nies this Memorandum Opinion.
/ s /

J ohn D. B ates Un i t edS t at es Di s tri ctJ u d ge Dated: Ma

rch 22, 2010