Opinion ID: 626153
Heading Depth: 3
Heading Rank: 2

Heading: Identification of Plan Assets

Text: To facilitate the District Court's analysis on remand, we provide the following guidance on identification of plan assets under ERISA. The term plan assets is not comprehensively defined in ERISA or in the Secretary's regulations. ERISA provides that the term `plan assets' means plan assets as defined by such regulations as the Secretary may prescribe.... [32] 29 U.S.C. § 1002(42). The Secretary's regulations define the scope of plan assets in two specific contexts: (1) where an employee benefit plan invests assets by purchasing shares in a company, 29 C.F.R. § 2510.3-101, and (2) where contributions to a plan are withheld by an employer from employees' wages, 29 C.F.R. § 2510.3-102. The first regulation is not relevant here, and the second regulation does not apply because the Secretary has not presented any evidence that employer contributions to the Fund were withheld from the wages of employees participating in the Fund. See In re Luna, 406 F.3d 1192, 1199 n. 3 (10th Cir. 2005). As the Tenth Circuit Court of Appeals has persuasively explained, in the absence of specific statutory or regulatory guidance, the term plan assets should be given its ordinary meaning, and therefore should be construed to refer to property owned by an ERISA plan. [33] See In re Luna, 406 F.3d at 1199 (considering dictionary definition of asset and noting that [c]entral to the definition of `asset,' then, is that the person or entity holding the asset has an ownership interest in a given thing, whether tangible or intangible). This approach is also consistent with guidance provided by the Secretary on the meaning of plan assets, which states that the assets of a plan generally are to be identified on the basis of ordinary notions of property rights under non-ERISA law. In general, the assets of a welfare plan would include any property, tangible or intangible, in which the plan has a beneficial ownership interest. Department of Labor, Advisory Op. No. 93-14A, 1993 WL 188473, at  (May 5, 1993); see also Kalda v. Sioux Valley Physician Partners, Inc., 481 F.3d 639, 647 (8th Cir. 2007) (finding the Secretary's reasoning in its rulings regarding `plan assets' thorough, valid, and particularly consistent and adopting the Secretary's definition). [34] As a general rule, the first step in identifying the property of an ERISA plan is to consult the documents establishing and governing the plan. Cf. In re Lucent Death Benefits ERISA Litig., 541 F.3d 250, 254-55 (3d Cir. 2008). A court should then, in light of these documents, consult contracts to which the plan is a party or other documents establishing the rights of the plan. See, e.g., Metzler v. Solidarity of Labor Organizations Health & Welfare Fund, No. 95 CIV 7247, 1998 WL 477964, at  (S.D.N.Y. Aug. 14, 1998), aff'd 224 F.3d 128 (2d Cir. 2000) (per curiam), cert. denied 533 U.S. 928, 121 S.Ct. 2549, 150 L.Ed.2d 716 (2001); Galgay v. Gangloff, 677 F.Supp. 295, 301-02 (M.D.Pa. 1987), aff'd 932 F.2d 959 (3d Cir. 1991). The Secretary further argues that representations made by PCI/NP and PCMG to businesses which purchased health benefits from the Fund should also be considered in determining what monies were assets of the Fund. Given the District Court's limited factual findings, we are reluctant to rule on this argument. We merely note that such representations are relevant only to the extent that they affect the property rights of the Fund under ordinary property law principles. We leave it to the District Court to determine on remand what representations were made and their relevance, if any, to the Fund's property rights.