Opinion ID: 494646
Heading Depth: 2
Heading Rank: 3

Heading: The Meaning of Fiduciary Under ERISA

Text: 19 The statutory language defining fiduciary under ERISA does not yield a precise answer to the issue before us. We are required, therefore, to interpret that language in order to effectuate the congressional purpose in enacting ERISA. 20 Our first step must be to narrow the focus of our inquiry. This court has stated that [a] person is a fiduciary for purposes of ERISA to the extent that he or she exercises discretion over the management of plan assets, renders investment advice for a fee or exercises discretionary control over the administration of a plan. Thornton v. Evans, 692 F.2d 1064, 1077 (7th Cir.1982); see also Credit Managers Ass'n v. Kennesaw Life & Accident Ins. Co., 809 F.2d 617, 625 (9th Cir.1987). There is no allegation in this case that the Union is a named fiduciary under 29 U.S.C. Sec. 1102(a)(2). 3 The regulations providing questions and answers relating to fiduciary responsibilities under ERISA state that [a] fiduciary with respect to the plan who is not a named fiduciary is a fiduciary only to the extent that he or she performs one or more of the functions described in section 3(21)(A) of the Act. 29 C.F.R. Sec. 2509.75-8, at 571 (1986). In this case, the Union exercised no discretion over the management of the plan's assets nor did it offer investment advice. Its status as a fiduciary under ERISA, therefore, could arise only from its exercise of discretion in administering the plan. 21 In our view, on the facts of this case, the Union cannot be said to administer the plan within the meaning of section 3(21)(A)(iii). The obligation of the Union pursuant to the collective bargaining agreement to present the claims of its individual members when they apply for benefits is an obligation that the Union has to its individual members--not to the fund. Such activity does not constitute administration of the fund. Rather, it constitutes representation of the interests of individual members. As the district court noted, [t]he only discretion granted the Union concerns its representation of the plaintiffs after the Company denies a claim. The Union cannot grant the benefits sought nor can it deny them. Its discretion lies only in its ability to forego arbitration. Forys, 634 F.Supp. at 965. In a somewhat analogous context, this court has already held that a Union's representation of the interests of its members should not be confused with the role of a fiduciary of the fund. In United Indep. Flight Officers, Inc. v. United Air Lines, Inc., 756 F.2d 1262 (7th Cir.1985), the court held that a Union is not a fiduciary when it is negotiating the terms and conditions of future pension benefits.... Id. at 1268. A union negotiator, the court noted, has a singular representative role--to make such concessions and accept such advantages as ... will best serve the interests of the parties represented. Id. (quoting Ford Motor Co. v. Huffman, 345 U.S. 330, 338, 73 S.Ct. 681, 686, 97 L.Ed. 1048 (1953)); see also United Indep. Flight Officers, Inc. v. United Air Lines, Inc., 756 F.2d 1274, 1280 (7th Cir.1985). 22 We have reviewed in detail the relevant legislative history and agency regulations. As the parties' submissions to us also make clear, none of this material deals directly with the issue presented by the appellants. This absence of any discussion of the issue in the legislative history or the agency regulations cannot be overlooked. It makes it quite clear that Congress, in enacting the legislation, and the administrator, in effectuating the congressional intent, have taken a distinctly different view of the role of a fiduciary than that offered by the appellants. The clear focus of the ERISA fiduciary provisions is on the management of the pension plan itself for the interests of the participants and beneficiaries, not upon conduct directed to a particular employee. Cowden v. Montgomery County Soc'y for Cancer Control, 591 F.Supp. 740, 753 (S.D.Ohio 1984). As noted in the House Report, a fiduciary is a person who exercises any power of control, management or disposition with respect to monies or other property of an employee benefit fund, or has the authority or responsibility to do so. H.R.Rep. No. 533, 93rd Cong., 2d Sess. 11, reprinted in 1974 U.S.Code Cong. & Admin.News 4639, 4649. 23 Our understanding of the role of the ERISA fiduciary is further supported by the Supreme Court's analysis of the statutory scheme in Massachusetts Mut. Life Ins. Co. v. Russell, 473 U.S. 134, 105 S.Ct. 3085, 87 L.Ed.2d 96 (1985): 24 A fair contextual reading of the statute makes it abundantly clear that its draftsmen were primarily concerned with the possible misuse of plan assets, and with remedies that would protect the entire plan, rather than with the rights of an individual beneficiary. 25 It is of course true that the fiduciary obligations of plan administrators are to serve the interest of participants and beneficiaries and, specifically, to provide them with the benefits authorized by the plan. But the principal statutory duties imposed on the trustees relate to the proper management, administration, and investment of fund assets, the maintenance of proper records, the disclosure of specified information, and the avoidance of conflicts of interest. 26 Id. at 142-43, 105 S.Ct. at 3090-91 (footnotes omitted); see also Sokol v. Bernstein, 803 F.2d 532, 535-36 (9th Cir.1986). 27 Therefore, we conclude that, when a Union performs solely the task of presenting the claims of its individual members to the fund, in accordance with the terms of the collective bargaining agreement, it is not a fiduciary under ERISA. 4 Accordingly, the judgment of the district court is affirmed. 28 AFFIRMED.