OCTOBER TERM, 1998
Syllabus
HUGHES AIRCRAFT CO. ET AL.
v. JACOBSON ET AL.
CERTIORARI TO THE UNITED STATES COURT OF APPEALS FOR THE NINTH
CIRCUIT
No. 97-1287. Argued November 2, 1998-Decided January 25,1999
Respondents, retired employees of petitioner Hughes Aircraft
Company (Hughes) and beneficiaries of petitioner Hughes
Non-Bargaining Retirement Plan (Plan), a defined benefit plan,
claimed in their class action that Hughes violated the Employee
Retirement Income Security Act of 1974 (ERISA) when it amended the
Plan by providing for an early retirement program and creating an
additional noncontributory benefit structure for new participants.
According to the complaint, the Plan originally required mandatory
contributions from all participating employees, in addition to
Hughes' own contributions. Prior to amending the Plan, Hughes
suspended its contributions because of a substantial Plan surplus,
which still exists today. The District Court dismissed respondents'
complaint for failure to state a claim, but the Ninth Circuit
reversed, finding that the addition of the noncontributory benefit
structure may have terminated the Plan and created two new plans.
The court also distinguished the holding in
Lockheed Corp.
v.
Spink, 517
U. S. 882, 891, that "amending a pension plan does not trigger
ERISA's fiduciary provisions," reasoning that
Spink
concerned a plan funded solely by employer contributions while
ERISA's fiduciary provisions were triggered here because the
members of the contributory structure had a vested interest in the
Plan's surplus. Accordingly, it concluded respondents had alleged
six causes of action: Hughes violated ERISA's prohibition against
using employees' vested, nonforfeitable benefits to meet its
obligations, § 203, by depleting the surplus to fund the
noncontributory structure; Hughes violated ERISA's anti-inurement
prohibition, § 403(c)(1), by benefiting itself at the expense of
the Plan's surplus; Hughes violated its fiduciary duties in three
separate claims; and the Plan's alleged termination violated §
4044(d)(3)(A)'s requirement that a terminated plan's residual
assets be distributed to plan beneficiaries.
Held: The Plan's amendments are not prohibited by
ERISA.
Pp. 438-448.
(a) This Court's review of respondents' claims begins with the
statute's language.
Estate of Cowart v.
Nicklos Drilling
Co., 505 U. S.
469, 475. Where that language provides a clear answer, it ends
there as well. See
Connecticut Nat. Bank v.
Germain,
503 U. S. 249,
254. P.438.
433
(b) Respondents' vested-benefits claim fails because the
addition of the noncontributory structure did not affect the rights
of pre-existing Plan participants. As members of a defined benefit
plan, respondents have no interest in the Plan's surplus. While a
defined contribution plan member is entitled to whatever assets are
dedicated to his individual account, a defined benefit plan member
is generally entitled to a fixed periodic payment from an
unsegregated pool of assets. The employer funding a defined benefit
plan typically bears the entire investment risk and must cover any
underfunding. However, the employer may also reduce or suspend his
contributions to an overfunded defined benefit plan. Given the
employer's obligation to make up any shortfall, no member has a
claim to any particular asset that composes a part of the plan's
general asset pool. Instead, members have a nonforfeitable right to
"accrued benefits," which by statute cannot be reduced below a
particular member's contribution amount. Thus, a plan's actual
investment experience does not affect members' statutory
entitlement but instead reflects the employer's risk. Since a
decline in the value of a plan's assets does not alter accrued
benefits, members have no entitlement to share in a plan's
surplus-even if it is partially attributable to the investment
growth of their contributions. Hughes never deprived respondents of
their accrued benefits. Thus, ERISA's vesting provision is not
implicated. Pp. 438-441.
(c) Hughes also did not violate ERISA's anti-inurement
provision, § 403(c)(1), by using surplus assets from the
contributory structure for the added noncontributory structure. As
its language makes clear, § 403(c)(1) focuses exclusively on
whether fund assets were used to pay benefits to plan participants.
Respondents neither allege that Hughes used assets for a purpose
other than paying plan benefits, nor deny that Hughes satisfied its
Plan and ERISA obligations to assure adequate funding for the Plan.
ERISA gives an employer broad authority to amend a plan,
Curtiss-Wright Corp. v.
Schoonejongen, 514 U. S. 73, 78, and
nowhere suggests that an amendment creating a new benefit structure
creates a
de facto second plan if the obligations continue
to draw from the same single, unsegregated pool or fund of assets.
Pp.441-443.
(d) Respondents' three fiduciary duty claims are directly
foreclosed by
Spink's holding that without exception,
"[p]lan sponsors who alter the terms of a plan do not fall into the
category of fiduciaries." 517 U. S., at 890.
Spink's
reasoning applies regardless of whether the plan at issue is
contributory, noncontributory, or any other type, for the statute's
plain language makes no such distinction when defining fiduciary.
See ERISA § 404(a). Even assuming that a sham transaction may
implicate a fiduciary duty, the incidental benefits Hughes received
from
434
Syllabus
implementing the noncontributory structure are not impermissible
under the statute. pp. 443-446.
(e) The addition of the noncontributory benefit structure does
not require that Hughes be ordered to terminate the Plan.
Respondents concede that no voluntary termination has occurred
within the meaning of ERISA § 4041(a)(1); and their termination
claim cannot be salvaged under the common-law theory of a wasting
trust, whose purposes having been accomplished, its continuation
would frustrate the settlor's intent. That doctrine appears to be
inconsistent with ERISA's termination provisions and thus must give
way to the statute. See
Varity Corp. v.
Howe,
516 U. S. 489,
497. Assuming that the doctrine might apply in certain
circumstances, it is by its own terms inapplicable in this case.
The circumstances here-the Plan continues to accept new members and
pay benefits, and has thousands of active participants in the
contributory benefit structure alone-can in no way be construed to
constitute an enfeebled plan whose membership has dwindled to a
mere remnant that would no longer benefit from the Plan's
administration. pp. 446-448.
105 F.3d
1288 and
128 F.3d
1305, reversed.
THOMAS, J., delivered the opinion for a unanimous Court.
Paul T. Cappuccio argued the cause for petitioners. With him on
the briefs were Kenneth W Starr, Richard A. Cordray, Christopher
Landau, Marcy J. K. Tiffany, T. Warren Jackson, and Robert F.
Walker.
Lisa Schiavo Blatt argued the cause for the United States as
amicus curiae urging reversal. With her on the brief were Solicitor
General Waxman, Deputy Solicitor General Kneedler, Marvin Krislov,
James J. Keightley, and Stuart
Seth Kupferberg argued the cause for respondents. With
him on the brief were
Richard Dorn and 1.
Philip
Sipser.*
*Briefs of
amici curiae urging reversal were filed for
the ERISA Industry Committee et al. by
Michael S.
Horne,
John M. Vine, and
Caroline M. Brown; and for the Hughes
Aircraft Retirees Association et al. by
David E. Gordon.
Briefs of
amici curiae urging affirmance were filed for
AT&T, RCA, and Boeing Employees by
Norman Zolot and
Kent Cprek; and for the
435
JUSTICE THOMAS delivered the opinion of the Court.
Five retired beneficiaries of a defined benefit plan, subject to
the terms of the Employee Retirement Income Security Act of 1974
(ERISA), 88 Stat. 832, as amended, 29 U. S. C. § 1001
et
seq., filed a class action lawsuit against their former
employer, Hughes Aircraft Company (Hughes), and the Hughes
Non-Bargaining Retirement Plan (Plan). They claim that Hughes
violated ERISA by amending the Plan to provide for an early
retirement program and a noncontributory benefit structure. The
Ninth Circuit held that ERISA may prohibit these amendments. We
reverse.
I
According to the complaint, Hughes has provided the Plan for its
employees since 1955. Prior to 1991, the Plan required mandatory
contributions from all participating employees, in addition to any
contributions made by Hughes.1 Section 3.1 of the Plan defines
Hughes' funding obligations:
"The cost of Benefits under the Plan, to the extent not provided
by contributions of Participants ... shall be provided by
contributions of [Hughes] not less than in such amounts, and at
such times, as the Plan Enrolled Actuary shall certify to be
necessary, to fund Benefits under the Plan .... "
In addition, § 3.2 provides that Hughes' contributions shall not
fall below the "amount necessary to maintain the quali-
National Employment Lawyers Association by Stephen R. Bruce,
Jeffrey Lewis, and Paula A. Brantner.
Mary Ellen Signorille and
Melvin Radowitz filed a
brief for the American Association of Retired Persons as
amicus
curiae.
1 This arrangement is commonly referred to as "contributory," as
compared to a plan whose members do not make contributions, which
is commonly referred to as "noncontributory." See generally S.
Bruce, Pension Claims 22 (2d ed. 1993). But a contributory plan
should not be confused with a "defined contribution plan" as
defined by ERISA § 3(34), 29 U. S. C. § 1002(34).
436
fied status of the Plan ... and to comply with all applicable
legal requirements." But § 6.2 of the Plan gives Hughes "the right
to suspend its contributions to the Plan at any time," so long as
doing so does not "create an 'accumulated funding deficiency'"
under ERISA.2
By 1986, as a result of employer and employee contributions and
investment growth, the Plan's assets exceeded the actuarial or
present value of accrued benefits by almost $1 billion. In light of
this Plan surplus, Hughes suspended its contributions in 1987,
which it has not resumed. Pursuant to the terms of the Plan, the
employee contribution requirement remains operational.
Two amendments Hughes made to the Plan are the subject of the
present litigation. In 1989, Hughes established an early retirement
program that provided significant additional retirement benefits to
certain eligible active employees. Subsequently, Hughes again
amended the Plan to provide that, effective January 1, 1991, new
participants could not contribute to the Plan, and would thereby
receive fewer benefits. Existing members could continue to
contribute or opt to be treated as new participants. The Plan
obligations created by these amendments constitute the only use of
the Plan's assets other than paying the pre-existing obligations
under the original contributory benefit structure. The Plan's
assets substantially exceed the minimum amount needed to fund all
current and future defined benefits.
In January 1992, respondents filed this class action on behalf
of all Plan participants who had contributed to the Plan and who
are or may become eligible to receive benefits des-
2 ERISA defines "accumulated funding deficiency" as
"the excess of the total charges to the funding standard account
for all plan years (beginning with the first plan year to which
this part applies) over the total credits to such account for such
years or, if less, the excess of the total charges to the
alternative minimum funding standard account for such plan years
over the total credits to such account for such years." §
302(a)(2), 29 U. S. C. § l082(a)(2).
437
ignated for contributing participants. The District Court
granted Hughes' motion to dismiss the complaint for failure to
state a claim. A divided panel of the Ninth Circuit reversed.
105 F.3d
1288 (1997), amended,
128 F.3d
1305 (1998). The majority concluded that the 1991 amendment may
have terminated the Plan and created two plans: one consisting of
pre-existing members and the other consisting of new participants.
Distinguishing
Lockheed Corp. v. Spink,
517 U. S. 882 (1996), as
concerning a plan funded solely by
employer contributions,
the majority held that the act of amending the Plan triggered
ERISA's fiduciary provisions. The majority also thought that the
employees who were members of the contributory structure had a
vested interest in the Plan's surplus.
Accordingly, the Court of Appeals concluded that respondents had
alleged six causes of action in their complaint. Specifically,
respondents claimed that Hughes had violated ERISA's prohibition
against using employees' vested, nonforfeitable benefits to meet
its obligations by depleting the surplus to fund the
noncontributory structure. § 203, 29 U. S. C. § 1053(a). They
further argued that Hughes had violated ERISA's anti-inurement
prohibition, § 403(c)(1), 29 U. S. C. § 1103(c)(1), by benefiting
itself at the expense of the Plan's surplus. Respondents also
alleged that Hughes had breached its fiduciary duties under ERISA
in three ways: amending the Plan in 1989 to fund a program outside
of the Plan's purposes violated § 404(a)(1)(D), 29 U. S. C. §
1104(a)(1)(D); amending the Plan in 1991 to create the
noncontributory structure violated § 406(a)(1)(D), 29 U. S. C. §
1106(a)(1)(D); and using the surplus assets to fund noncontributory
benefits for those who had never contributed to the Plan violated §
404, 29 U. S. C. § 1104. Finally, respondents claimed that the
alleged termination of the Plan had violated § 4044(d)(3)(A), 29 U.
S. C. § 1344(d)(3)(A), which requires that residual assets in a
terminated plan be distributed to its beneficiaries.
438
The dissenting judge concluded that the District Court properly
dismissed the complaint. He reasoned that an amendment to a
pre-existing plan does not affect the availability of the plan's
pool of assets for funding pre-existing obligations and cannot be
characterized as a termination; interpreted
Spink to stand
for the proposition that the act of amending a plan does not
trigger fiduciary duties; and observed that employees who
contribute to a defined benefit plan do not have an interest in
that plan's surplus.
The majority's decision is in tension with our decision in
Spink, where we held that "the act of amending a pension
plan does not trigger ERISA's fiduciary provisions," 517 U. S., at
891, and with other Circuits' decisions. See,
e. g.,
Brillinger v.
General Elec. Co., 130 F.3d
61 (CA2 1997), cert. pending, No. 97-1834;
American Flint
Glass Workers Union v.
Beaumont Glass Co., 62 F.3d
574 (CA3 1995);
Malia v.
General Elec. Co.,
23 F.3d
828 (CA3), cert. denied, 513 U. S. 956 (1994);
Johnson
v.
Georgia-Pacific Corp., 19 F.3d
1184 (CA7 1994);
Phillips v.
Bebber, 914 F.2d
31 (CA4 1990)
(per curiam). We granted certiorari, 523
U. S. 1093 (1998), and now reverse.
II
Our review of the six claims recognized by the Ninth Circuit
requires us to interpret a number of ERISA's provisions. As in any
case of statutory construction, our analysis begins with "the
language of the statute."
Estate of Cowart v.
Nicklos
Drilling Co., 505
U. S. 469, 475 (1992). And where the statutory language
provides a clear answer, it ends there as well. See
Connecticut
Nat. Bank v.
Germain, 503 U. S. 249, 254
(1992).
A
Respondents' vested-benefits and anti-inurement claims proceed
on the erroneous assumption that they had an interest in the Plan's
surplus, which, with respect to the antiinurement claim, was used
exclusively to benefit Hughes.
439
These claims fail because the 1991 amendment did not affect the
rights of pre-existing Plan participants and Hughes did not use the
surplus for its own benefit.
To understand why respondents have no interest in the Plan's
surplus, it is essential to recognize the difference between
defined contribution plans and defined benefit plans, such as
Hughes'. A defined contribution plan is one where employees and
employers may contribute to the plan, and "'the employer's
contribution is fixed and the employee receives whatever level of
benefits the amount contributed on his behalf will provide.'"
Nachman Corp. v.
Pension Benefit Guaranty
Corporation, 446
U. S. 359, 364, n. 5 (1980) (quoting
Alabama Power Co.
v.
Davis, 431
U. S. 581, 593, n. 18 (1977)). A defined contribution plan
"provides for an individual account for each participant and for
benefits based solely upon the amount contributed to the
participant's account." ERISA § 3(34); 29 u. S. C. § 1002(34).
"[U]nder such plans, by definition, there can never be an
insufficiency of funds in the plan to cover promised benefits,"
Nachman, supra, at 364, n. 5, since each beneficiary is
entitled to whatever assets are dedicated to his individual
account.
A defined benefit plan, on the other hand, consists of a general
pool of assets rather than individual dedicated accounts. Such a
plan, "as its name implies, is one where the employee, upon
retirement, is entitled to a fixed periodic payment."
Commissioner v.
Keystone Consolo Industries, Inc.,
508 U. S. 152,
154 (1993); see also
Mead Corp. v.
Tilley, 490 U. S. 714, 717
(1989); ERISA § 3(35), 29 U. S. C. § 1002(35). The asset pool may
be funded by employer or employee contributions, or a combination
of both. See ERISA § 204(c); 29 U. S. C. § 1054(c). But the
employer typically bears the entire investment risk and-short of
the consequences of plan termination-must cover any underfunding as
the result of a shortfall that may occur from the plan's
investments. See
Connolly v.
Pension Benefit Guaranty
Corporation, 475
U. S. 211, 232 (1986) (O'CONNOR, J., concur-
440
ring); 2 J. Mamorsky, Employee Benefits Law § 8.04 (1998).
Conversely, if the defined benefit plan is overfunded, the employer
may reduce or suspend his contributions. See
Nachman, supra,
at 363-364, n. 5 (quoting
Alabama Power Co., supra, at 593,
n. 18) (noting that" 'the employer's contribution is adjusted to
whatever level is necessary'" to provide the defined benefits).
The structure of a defined benefit plan reflects the risk borne
by the employer. Given the employer's obligation to make up any
shortfall, no plan member has a claim to any particular asset that
composes a part of the plan's general asset pool. Instead, members
have a right to a certain defined level of benefits, known as
"accrued benefits." That term, for purposes of a defined benefit
plan, is defined as "the individual's accrued benefit determined
under the plan [and ordinarily is] expressed in the form of an
annual benefit commencing at normal retirement age." ERISA §
3(23)(A), 29 U. S. C. § 1002(23)(A).3 In order to prevent a
subsequent downward adjustment in benefits below a member's
contribution amount, a defined benefit plan participant has a
nonforfeitable right to the greater of (1) the benefits provided
under the plan or (2) an amount derived from the employee's
accumulated contributions, determined using an interest rate fixed
by statute. See § 204(c)(2)(B), 29 U. S. C. § 1054(c)(2)(B); see
also § 3(23)(A), 29 U. S. C. § 1002(23)(A); § 204(c)(2)(C), 29 U.
S. C. § 1054(c)(2)(C). Given this accumulated contribution floor,
plan members generally have a nonforfeitable right only to their
"accrued benefit," so that a plan's actual investment experience
does not affect their statutory entitlement. Since a decline in the
value of a plan's assets does not alter accrued benefits, members
similarly have no entitlement to share in a plan's surplus-even
3 By contrast, an "accrued benefit" for purposes of defined
contribution plans means "the balance of the individual's account."
ERISA § 3(23)(B), 29 U. S. C. § 1002(23)(B).
441
if it is partially attributable to the investment growth of
their contributions.
Therefore, Hughes could not have violated ERISA's vesting
requirements by using assets from the surplus attributable to the
employees' contributions to fund the noncontributory structure.
ERISA's vesting requirement is met "if an employee's rights in his
accrued benefit derived from his own contributions are
nonforfeitable," assuming that such are not limited to a certain
percentage of benefits depending on the employee's years of
service. §§ 203(a)(1)-(2), 29 U. S. c. §§ 1053(a)(1)-(2). The
vesting provision "sets the minimum level of benefits an employee
must receive after accruing specified years of service."
Teamsters v.
Daniel, 439 U. S. 551, 569
(1979). Otherwise, the "level of benefits" is determined by "the
private parties, not the Government."
Alessi v.
Raybestos-Manhattan, Inc., 451 U. S. 504, 511
(1981). Hence, this provision does not concern items such as a
return on investment that fall outside of the definition of
"accrued benefit." ERISA §§ 3(23)(A), 203(a); 29 U. S. c. §§
1002(23)(A), 1053(a). Assuming that an employee's minimum accrued
benefit is provided, this section is not implicated. Hughes never
deprived respondents of their accrued benefits. Indeed, when it
implemented the noncontributory structure, Hughes permitted the
Plan's existing participants to switch into the new structure.
Since respondents do not allege that Hughes has ever withdrawn
accrued benefits or otherwise nonforfeitable interests from the
pre-existing members, this vesting claim is meritless.
Respondents further contend that, even if they have no interest
in the Plan's assets, the creation of the new contributory
structure permitted Hughes to use assets from the surplus
attributable to employer
and employee contributions for its
sole and exclusive benefit, in violation of ERISA's antiinurement
provision. This section provides, in relevant part:
442
"[T]he assets of a plan [except as otherwise provided in the
statute] shall never inure to the benefit of any employer and shall
be held for the exclusive purposes of providing benefits to
participants in the plan and their beneficiaries and defraying
reasonable expenses of administering the plan." § 403(c)(1); 29 U.
S. c. § 1l03(c)(1).
As the language makes clear, the section focuses exclusively on
whether fund assets were used to pay pension benefits to plan
participants, without distinguishing either between benefits for
new and old employees under one or more benefit structures of the
same plan, or between assets that make up a plan's surplus as
opposed to those needed to fund the plan's benefits. Respondents do
not dispute that Hughes used fund assets for the sole purpose of
paying pension benefits to Plan participants. Furthermore, at all
times, Hughes satisfied its continuing obligation under the
provisions of the Plan and ERISA to assure that the Plan was
adequately funded. See Plan § 6.2; ERISA § 302, 29 U. S. C. § 1082.
In other words, Hughes did not act impermissibly by using surplus
assets from the contributory structure to add the noncontributory
structure to the Plan. The act of amending a pre-existing plan
cannot as a matter of law create two de
facto plans if the
obligations (both preamendment and postamendment) continue to draw
from the same single, unsegregated pool or fund of assets. ERISA
provides an employer with broad authority to amend a plan, see
Curtiss-Wright Corp. v.
Schoonejongen, 514 U. S. 73, 78 (1995),
and nowhere suggests that an amendment creating a new benefit
structure also creates a second plan.4 Because only one plan
ex-
4 Our conclusion is consistent with other Government
pronouncements in this area. For example, the Internal Revenue
Service has promulgated a treasury regulation that provides, for
income tax purposes, a pension plan will not fail to be a "single
plan" merely because the "plan has several distinct benefit
structures." Treas. Reg. § 1.414(1)-1(b)(1)(i), 26 CFR
443
ists and respondents do not allege that Hughes used any of the
assets for a purpose other than to pay its obligations to the
Plan's beneficiaries, Hughes could not have violated the
anti-inurement provision under ERISA § 403(c)(1).
B
Each of respondents' fiduciary duty claims must fail because
ERISA's fiduciary provisions are inapplicable to the amendments.
This conclusion follows from our decision in
Spink, where we
considered whether amending a plan to require the conditioning of
benefit payments under an early retirement program on the
participants' release of employment-related claims was a prohibited
transaction under ERISA § 406(a). 517 U. S., at 885. We
explained:
"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, '[e]mployers or other plan
sponsors are generally free under ERISA, for any reason at any
time, to adopt, modify, or terminate welfare plans.' When employers
undertake those actions, they do not act as fiduciaries, but are
analogous to the settlors of a trust." Id., at 890 (quoting
Curtiss- Wright, supra, at 78 (citations omitted)).
We made clear in
Spink that our reasoning applied both to
"pension benefit plans" and "welfare benefit plans," since "[t]he
definition of fiduciary makes no distinction between persons
exercising authority over" these different types of plans. 517 U.
S., at 890-891. Our conclusion applies with equal force to persons
exercising authority over a contribu-
§ 1.414(l)-1(b)(1)(i) (1998). It further provides that "[a] plan
is a 'single plan' if and only if, on an ongoing basis, all of the
plan assets are available to pay benefits to employees who are
covered by the plan."
Ibid.; see also 29 CFR § 2520.102-4
(1998) ("[A]n employee benefit plan may provide different benefits
for various classes of participants and beneficiaries").
444
tory plan, a noncontributory plan, or any other type of plan.
Our holding did not turn, as the Court of Appeals below thought, on
the type of plan being amended for the simple reason that the plain
language of the statute defining fiduciary makes no distinction.
See id., at 891; ERISA § 404(a), 29 U. S. C. § 1l04(a) (specifying
duties of a "fiduciary ... with respect to a plan"). Rather, it
turned on whether the employer's act of amending its plan
constituted an exercise of fiduciary duty. In
Spink, we
concluded it did not. 517 U. S., at 891.
The same act of amending here also does not constitute the
action of a fiduciary, although Hughes' Plan happens to be one to
which employees contribute. In general, an employer's decision to
amend a pension plan concerns the composition or design of the plan
itself and does not implicate the employer's fiduciary duties which
consist of such actions as the administration of the plan's assets.
See id., at 890. ERISA's fiduciary duty requirement simply is not
implicated where Hughes, acting as the Plan's settlor, makes a
decision regarding the form or structure of the Plan such as who is
entitled to receive Plan benefits and in what amounts, or how such
benefits are calculated. See
Shaw v.
Delta Air Lines,
Inc., 463 U. S.
85, 91 (1983) (describing how ERISA does not mandate that
"employers provide any particular benefits, and does not itself
proscribe discrimination in the provision of employee benefits").5
A settlor's powers include the ability to add a new benefit
structure to an existing plan. Re-
5 Respondents suggest that they may be regarded as cosettlors
because they have contributed to the Plan's corpus. However, merely
making contributions does not make one akin to a settlor who is
responsible for creating the plan. See generally G. Bogert, Law of
Trusts and Trustees § 1, p. 4 (rev. 2d ed. 1984) ("The settlor of a
trust is the person who intentionally causes it to come into
existence" (footnote omitted; emphasis deleted)). Certainly,
respondents do not contend that they are responsible for the
creation of the Plan.
445
spondents' three fiduciary duty claims are directly foreclosed
by
Spink's holding that, without exception, "[p]lan sponsors
who alter the terms of a plan do not fall into the category of
fiduciaries." 517 U. S., at 890.
Respondents attempt to circumvent this conclusion by arguing
that the amendments amounted to a sham transaction. Specifically,
respondents argue that Hughes-by effectively increasing certain
employees' wages through either providing increased retirement
incentives or including those employees in the Plan's
noncontributory structure-reduced its labor costs by spending down
the Plan's surplus to cover its own obligations. In
Spink,
we noted in passing that if a transaction constituted "merely a
sham transaction, meant to disguise an otherwise unlawful transfer
of assets to a party in interest, ... that might present a
different question."
Id., at 895, n. 8. Even assuming that a
sham transaction may implicate a fiduciary duty, the incidental
benefits conferred upon Hughes when it amended the Plan are not
impermissible under the statute. It is irrelevant whether Hughes
received lower labor costs or other such incidental benefits from
implementing the noncontributory structure under the 1991
amendment. As we noted in
Spink:
"[A]mong 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."
Id., at 893-894 (citation omitted).
Receipt of these types of benefits no more constitutes a breach
of fiduciary duties than they would constitute improper inurement
or otherwise violate ERISA. To find that
446
such benefits somehow violated the statute would forestall
employers' efforts to implement a pension plan. ERISA, by and
large, is concerned with "ensur[ing] that employees will not be
left emptyhanded once employers have guaranteed them certain
benefits," id., at 887, not with depriving employers of benefits
incidental thereto. In sum, respondents have failed to show that
Hughes labored under fiduciary duties or engaged in a sham
transaction.
C
Finally, respondents allege that the 1991 amendment requires a
court to order petitioners to terminate the Plan. ERISA itself
plainly spells out the circumstances under which a plan terminates.
In a section entitled, "[e]xclusive means of plan termination," the
statute provides:
"Except in the case of a termination for which proceedings are
otherwise instituted by the [Pension Benefit Guaranty Corporation]
as provided in section 1342 of this title, a single-employer plan
may be terminated only in a standard termination under subsection
(b) of this section or a distress termination under subsection (c)
of this section." § 4041(a)(1), as set forth in 29 U. S. C. §
1341(a)(1).
Subsections (b) and (c) concern the two ways by which an
employer may voluntarily terminate a plan. See 29 U. S. C. §§
1341(b) and (c); see also
Pension Benefit Guaranty
Corporation v.
LTV Corp., 496 U. S. 633, 638-639
(1990). Based on the language of the statute, these means
constitute the sole avenues for voluntary termination. See
Germain, 503 U. S., at 254 (explaining that Congress "says
in a statute what it means and means in a statute what it says
there").
Respondents concede that no voluntary termination has occurred,
but nevertheless contend that the 1991 amendment worked an
effective termination based on the common-law
447
theory of a wasting trust. Under common law, a wasting trust is
a trust whose purposes have been accomplished, such that the
continuation of the trust would frustrate the settlor's intent. See
generally 4 A. Scott, Law of Trusts §§ 334, 337, 337.8 (4th ed.
1989); G. Bogert, Law of Trusts and Trustees §§ 1002, 1007 (2d rev.
ed. 1983). This claim also fails.
As an initial matter, because ERISA is a "comprehensive and
reticulated statute,"
Nachman, 446 U. S., at 361, and is
"enormously complex and detailed,"
Mertens v.
Hewitt
Associates, 508
U. S. 248, 262 (1993), it should not be supplemented by
extratextual remedies, such as the common-law doctrines advocated
by respondents. See
Guidry v.
Sheet Metal Workers Nat.
Pension Fund, 493
U. S. 365, 376 (1990) (explaining that, "[a]s a general matter,
courts should be loath to announce equitable exceptions to
legislative requirements or prohibitions that are unqualified by
the statutory text"). Although trust law may offer a "starting
point" for analysis in some situations, it must give way if it is
inconsistent with "the language of the statute, its structure, or
its purposes."
Varity Corp. v.
Howe, 516 U. S. 489, 497
(1996). Application of the wasting trust doctrine in this context
would appear to be inconsistent with the language of ERISA's
termination provisions.
Even assuming that the wasting trust doctrine might apply in
certain circumstances-an extremely doubtful proposition-it is by
its own terms inapplicable here. As respondents concede, since the
date of the 1991 amendment, the Plan has been accepting new members
and paying all the promised benefits to eligible Plan participants.
Furthermore, thousands of active participants in the contributory
benefit structure continue to accrue benefits. Simply put, these
circumstances can in no way be construed to constitute an enfeebled
plan whose membership has dwindled to a mere remnant that would no
longer benefit from the Plan's admin-
448
istration. Therefore, the wasting trust doctrine cannot salvage
respondents' termination claim.
***
The judgment of the Court of Appeals is therefore reversed.
It is so ordered.
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