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Text: Section 406(a)(1) regulates the conduct of plan fiduciaries, placing certain transactions outside the scope of their lawful authority. When a fiduciary violates the rules set forth in Section(s) 406(a)(1), Section(s) 409 of ERISA renders him personally liable for any losses incurred by the plan, any ill-gotten profits, and other equitable and remedial relief deemed appropriate by the court. See 29 U. S. C. Section(s) 1109(a). But in order to sustain an alleged transgression of Section(s) 406(a), a plaintiff must show that a fiduciary caused the plan to engage in the allegedly unlawful transaction.2 Unless a plaintiff can make that showing, there can be no violation of Section(s) 406(a)(1) to warrant relief under the enforcement provisions. Cf. Peacock v. Thomas, 516 U. S. __, __ (1996) (slip op., at 3-4) ("Section 502(a)(3) `does not, after all, authorize "appropriate equitable relief" at large, but only "appropriate equitable relief for the purpose of "redress[ing any] violations or . . . enforc[ing] any provisions" of ERISA'") (quoting Mertens v. Hewitt Associates, 508 U. S. 248, 253 (1993)). The Court of Appeals erred by not asking whether fiduciary status existed in this case before it found a violation of Section(s) 406(a)(1)(D).3

We first address the allegation in Spink's complaint that Lockheed and the board of directors breached their fiduciary duties when they adopted the amendments establishing the early retirement programs. Plan sponsors who alter the terms of a plan do not fall into the category of fiduciaries. As we said with respect to the amendment of welfare benefit plans in Curtiss-Wright Corp. v. Schoonejongen, 514 U. S. ___ (1995), "[e]mployers or other plan sponsors are generally free under ERISA, for any reason at any time, to adopt, modify, or terminate welfare plans." Id., at ___ (slip op., at 4) (citing Adams v. Avondale Industries, Inc., 905 F. 2d 943, 947 (CA6 1990)). When employers undertake those actions, they do not act as fiduciaries, 514 U. S., at ___ (slip op., at ___), but are analogous to the settlors of a trust, see Johnson v. Georgia-Pacific Corp., 19 F. 3d 1184, 1188 (CA7 1994).

13
This rule is rooted in the text of ERISA's definition of fiduciary. See 29 U. S. C. Section(s) 1002(21)(A) (quoted n. 2, supra). As the Second Circuit has observed, "only when fulfilling certain defined functions, including the exercise of discretionary authority or control over plan management or administration," does a person become a fiduciary under Section(s) 3(21)(A). Siskind v. Sperry Retirement Program, Unisys, 47 F. 3d 498, 505 (1995). "[B]ecause [the] defined functions [in the definition of fiduciary] do not include plan design, an employer may decide to amend an employee benefit plan without being subject to fiduciary review." Ibid. We recently recognized this very point, noting that "it may be true that amending or terminating a plan . . . cannot be an act of plan `management' or `administration.'" Varity Corp. v. Howe, 516 U. S. __, __ (1995) (slip op., at 15). As noted above, we in fact said as much in Curtiss-Wright, see 514 U. S., at ___ (slip op., at ___), at least with respect to welfare benefit plans.

14
We see no reason why the rule of Curtiss-Wright should not be extended to pension benefit plans. Indeed, there are compelling reasons to apply the same rule to cases involving both kinds of plans, as most Circuit Courts have done.4 The definition of fiduciary makes no distinction between persons exercising authority over welfare benefit plans and those exercising authority over pension plans. It speaks simply of a "fiduciary with respect to a plan," 29 U. S. C. Section(s) 1002(21)(A), and of "management" and "administration" of "such plan," ibid. And ERISA defines a "plan" as being either a welfare or pension plan, or both. See Section(s) 1002(3). Likewise, the fiduciary duty provisions of ERISA are phrased in general terms and apply with equal force to welfare and pension plans. See, e.g., Section(s) 1104(a) (specifying duties of a "fiduciary . . . with respect to a plan"). See also Shaw v. Delta Air Lines, Inc., 463 U. S., at 91 (ERISA "sets various uniform standards, including rules concerning . . . fiduciary responsibility, for both pension and welfare plans"). Given ERISA's definition of fiduciary and the applicability of the duties that attend that status, we think that the rules regarding fiduciary capacity--including the settlor-fiduciary distinction--should apply to pension and welfare plans alike.

15
Lockheed acted not as a fiduciary but as a settlor when it amended the terms of the Plan to include the retirement programs. Thus, Section(s) 406(a)'s requirement of fiduciary status is not met. While other portions of ERISA govern plan amendments, see, e.g., 29 U. S. C. Section(s) 1054(g) (amendment generally may not decrease accrued benefits); Section(s) 1085b (if adoption of an amendment results in underfunding of a defined benefit plan, the sponsor must post security for the amount of the deficiency), the act of amending a pension plan does not trigger ERISA's fiduciary provisions.

Spink also alleged that the members of Lockheed's Retirement Committee who implemented the amended Plan violated Section(s) 406(a)(1)(D). As with the question whether Lockheed and the board members can be held liable under ERISA's fiduciary rules, the Court of Appeals erred in holding that the Retirement Committee members violated the prohibited transaction section of ERISA without making the requisite finding of fiduciary status. It is not necessary for us to decide the question whether the Retirement Committee members acted as fiduciaries when they paid out benefits according to the terms of the amended Plan, however, because we do not think that they engaged in any conduct prohibited by Section(s) 406(a)(1)(D).

17
The "transaction" in which fiduciaries may not cause a plan to engage is one that "constitutes a direct or indirect . . . transfer to, or use by or for the benefit of a party in interest, of any assets of the plan." 29 U. S. C. Section(s) 1106(a)(1)(D). Spink reads Section(s) 406(a)(1)(D) to apply in cases where the benefit received by the party in interest--in this case, the employer--is not merely a "natural inciden[t] of the administration of pension plans." Brief for Respondent 10. Lockheed, on the other hand, maintains that a plan administrator's payment of benefits to plan participants and beneficiaries pursuant to the terms of an otherwise lawful plan5 is wholly outside the scope of Section(s) 406(a)(1)(D). See Reply Brief for Petitioners 10. We agree with Lockheed.

18
Section 406(a)(1)(D) does not in direct terms include the payment of benefits by a plan administrator. And the surrounding provisions suggest that the payment of benefits is in fact not a "transaction" in the sense that Congress used that term in Section(s) 406(a). Section 406(a) forbids fiduciaries from engaging the plan in the "sale," "exchange," or "leasing" of property, 29 U. S. C. Section(s) 1106(a)(1)(A); the "lending of money" or "extension of credit," Section(s) 1106(a)(1)(B); the "furnishing of goods, services, or facilities," Section(s) 1106(a)(1)(C); and the "acquisition . . . of any employer security or employer real property," Section(s) 1106(a)(1)(E), with a party in interest. See also Section(s) 1108(b) (listing similar types of "transactions"). These are commercial bargains that present a special risk of plan underfunding because they are struck with plan insiders, presumably not at arms-length. See Commissioner v. Keystone Consol. Industries, Inc., 508 U. S., at 160. What the "transactions" identified in Section(s) 406(a) thus have in common is that they generally involve uses of plan assets that are potentially harmful to the plan. Cf. id., at 160-161 (reasoning that a transfer of unencumbered property to the plan by the employer for the purpose of applying it toward the employer's funding obligation fell within Section(s) 406(a)(1)'s companion tax provision, 26 U. S. C. Section(s) 4975, because it could "jeopardize the ability of the plan to pay promised benefits"). The payment of benefits conditioned on performance by plan participants cannot reasonably be said to share that characteristic.

19
According to Spink and the Court of Appeals, however, Lockheed's early retirement programs were prohibited transactions within the meaning of Section(s) 406(a)(1)(D) because the required release of employment-related claims by participants created a "significant benefit" for Lockheed. 60 F. 3d, at 624. Spink concedes, however, that among the "incidental" and thus legitimate benefits that a plan sponsor may receive from the operation of a pension plan are attracting and retaining employees, paying deferred compensation, settling or avoiding strikes, providing increased compensation without increasing wages, increasing employee turnover, and reducing the likelihood of lawsuits by encouraging employees who would otherwise have been laid off to depart voluntarily. Brief for Respondent 11.

20
We do not see how obtaining waivers of employment-related claims can meaningfully be distinguished from these admittedly permissible objectives. Each involves, at bottom, a quid pro quo between the plan sponsor and the participant: that is, the employer promises to pay increased benefits in exchange for the performance of some condition by the employee. By Spink's admission, the employer can ask the employee to continue to work for the employer, to cross a picket line, or to retire early. The execution of a release of claims against the employer is functionally no different; like these other conditions, it is an act that the employee performs for the employer in return for benefits. Certainly, there is no basis in Section(s) 406(a)(1)(D) for distinguishing a valid from an invalid quid pro quo. Section 406(a)(1)(D) simply does not address what an employer can and cannot ask an employee to do in return for benefits. See generally Alessi v. Raybestos-Manhattan, Inc., 451 U. S., at 511 (ERISA "leaves th[e] question" of the content of benefits "to the private parties creating the plan. . . . [T]he private parties, not the Government, control the level of benefits").6 Furthermore, if an employer can avoid litigation that might result from laying off an employee by enticing him to retire early, as Spink concedes, it stands to reason that the employer can also protect itself from suits arising out of that retirement by asking the employee to release any employment-related claims he may have.7

21
In short, whatever the precise boundaries of the prohibition in Section(s) 406(a)(1)(D), there is one use of plan assets that it cannot logically encompass: a quid pro quo between the employer and plan participants in which the plan pays out benefits to the participants pursuant to its terms. When Section(s) 406(a)(1)(D) is read in the context of the other prohibited transaction provisions, it becomes clear that the payment of benefits in exchange for the performance of some condition by the employee is not a "transaction" within the meaning of Section(s) 406(a)(1). A standard that allows some benefits agreements but not others, as Spink suggests, lacks a basis in Section(s) 406(a)(1)(D); it also would provide little guidance to lower courts and those who must comply with ERISA. We thus hold that the payment of benefits pursuant to an amended plan, regardless of what the plan requires of the employee in return for those benefits, does not constitute a prohibited transaction.8