Opinion ID: 201479
Heading Depth: 2
Heading Rank: 3

Heading: standard of review for the plan administrator's interpretation of the 1995 restatement

Text: 18 The parties disagree on the appropriate standard of review of the plan administrator's decision to deny benefits. The district court determined that John Hancock acted in an arbitrary and capricious manner by interpreting its pension plan to deny the former employees' requests for early retirement benefits. This is the appropriate standard of review for a benefits claim under section 1132(a)(1)(B) where the plan gives the administrator discretionary authority to construe the plan. Firestone Tire & Rubber Co. v. Bruch, 489 U.S. 101, 113-15, 109 S.Ct. 948, 103 L.Ed.2d 80 (1989). The Plan document contains a clear grant of discretionary authority to John Hancock as plan administrator, so we will review John Hancock's interpretation of its Plan under an arbitrary and capricious standard. See Bellino v. Schlumberger Techs., Inc., 944 F.2d 26, 29 (1st Cir.1991) (Federal courts review ERISA claims de novo, `unless the benefit plan gives the administrator or fiduciary discretionary authority to determine eligibility for benefits or to construe the terms of the plan.') (quoting Firestone Tire & Rubber Co., 489 U.S. at 115, 109 S.Ct. 948). The grant of authority is found in Section 11.1 of the 1995 Restatement, which states: 19 The Company shall be the named fiduciary and the administrator of the Plan for purposes of ERISA and shall have the authority to control and manage the operation and administration of the Plan. The Company shall have the power to adopt such rules and regulations as it may deem necessary or appropriate for the efficient operation and administration of the Plan.... The Company shall interpret the Plan and determine all questions arising under it. Any such determination by the Company shall be binding on all persons affected thereby. 20 Despite this language, the former employees contend that the arbitrary and capricious standard is inapplicable when, as here, a grant of discretionary authority is not found in the summary plan description. We are unpersuaded. The silence of the summary plan description on the issue of the administrator's discretion does not create a direct conflict with any particular Plan provision and therefore does not warrant de novo review. See Martin v. Blue Cross & Blue Shield of Virginia, Inc., 115 F.3d 1201, 1205 (4th Cir.1997) (Vesting the plan administrator with discretion in making coverage decisions simply does not conflict with the SPD's silence on the matter.); Wald v. Southwestern Bell Corp. Customcare Med. Plan, 83 F.3d 1002, 1006 (8th Cir.1996) (rejecting argument that summary plan description must contain description of the administrator's discretion in order for arbitrary and capricious review to apply). 21 Contrary to the former employees' assertion, we also conclude that John Hancock does not suffer from a conflict of interest warranting less deferential review. We have recognized that the financial self-interest of a plan administrator may warrant arbitrary and capricious review with more bite. Doyle v. Paul Revere Life Ins. Co., 144 F.3d 181, 184 (1st Cir.1998). However, we have restricted this type of review to situations where the plan participant shows that an adverse determination was improperly motivated. Id. The former employees have made no such showing here. 22 Finally, there is no merit to the former employees' argument that the administrator's interpretation of Plan language is not a discretionary function and therefore not entitled to arbitrary and capricious review. In addition to conflicting with the actual language of the 1995 Restatement, which states that John Hancock shall interpret the Plan, this argument is wholly inconsistent with our repeated recognition that arbitrary and capricious review applies when a plan reserves discretionary authority to its administrator. See, e.g., Kolling v. Am. Power Conversion Corp., 347 F.3d 11, 13 (1st Cir.2003).