205 F.3d 327 (7th Cir. 2000)
Carolyn Herzberger,    Plaintiff-Appellant,v.Standard Insurance Company,    Defendant-Appellee.Beverly A. Johnson,     Plaintiff-Appellant,v.Prudential Insurance Company of America,    Defendant-Appellee.
No. 99-1944, No. 99-3116
In the  United States Court of Appeals  For the Seventh Circuit
Argued January 12, 2000Decided February 23, 2000

Appeal from the United States District Court  for the Northern District of Illinois, Eastern Division.  No. 98 C 2203--Harry D. Leinenweber, Judge.
Appeal from the United States District Court  for the Western District of Wisconsin.  No. 98 C 750--Barbara B. Crabb, Judge. [Copyrighted Material Omitted]
Before Posner, Chief Judge, and Coffey and  Ripple, Circuit Judges.
Posner, Chief Judge.


1
We have  consolidated for decision two appeals  that raise the same issue regarding the  scope of judicial review of decisions by  administrators of ERISA welfare or  pension plans to deny benefits sought by  participants in or beneficiaries of such  plans. The issue is whether language in  plan documents to the effect that  benefits shall be paid when the plan  administrator upon proof (or satisfactory  proof) determines that the applicant is  entitled to them confers upon the  administrator a power of discretionary  judgment, so that a court can set it  aside only if it was "arbitrary and  capricious," that is, unreasonable, and  not merely incorrect, which is the  question for the court when review is  plenary ("de novo"). The cases directly  on point say "no," ruling that the  language in the plan documents must  confer discretion in clearer terms.  Kinstler v. First Reliance Standard Life  Ins. Co., 181 F.3d 243, 251-52 (2d Cir.  1999); Kearney v. Standard Ins. Co., 175  F.3d 1084, 1089-90 (9th Cir. 1999) (en  banc); Brown v. Seitz Foods, Inc.  Disability Benefit Plan, 140 F.3d 1198,  1200 (8th Cir. 1998); Bounds v. Bell  Atlantic Enterprises Flexible Long-Term  Disability Plan, 32 F.3d 337, 339 (8th  Cir. 1994); Haley v. Paul Revere Life  Ins. Co., 77 F.3d 84, 87-89 (4th Cir.  1996). Some of our cases, however, may  seem to come close to answering "yes."  Ramsey v. Hercules Inc., 77 F.3d 199,  205-06 (7th Cir. 1996); Patterson v.  Caterpillar, Inc., 70 F.3d 503, 505 (7th  Cir. 1995); Donato v. Metropolitan Life  Ins. Co, 19 F.3d 375, 379-80 (7th Cir.  1994); Bali v. Blue Cross & Blue Shield  Ass'n, 873 F.2d 1043, 1047 (7th Cir.  1989). The Patterson case comes closest,  holding (as does Perez v. Aetna Life Ins.  Co., 150 F.3d 550, 555-58 (6th Cir. 1998)  (en banc), which involved the same  language), that discretion is conferred  by providing in the plan just that the  benefits decision shall be based on such  proof as shall be "required" by the plan  administrator. Perez explains that this  phraseology implies that the  administrator shall determine how much  proof is enough, which the court thought  a subjective standard. Another of our  cases, Perlman v. Swiss Bank Corp.  Comprehensive Disability Protection Plan,  195 F.3d 975 (7th Cir. 1999), involved a  plan that conditioned benefits on  satisfactory proof, but though we  reviewed the denial of benefits under the  deferential standard, the majority and  dissenting opinions assumed rather than  decided that it was the proper standard  to use. See id. at 980; id. at 985. The  proper standard was simply not an issue.


2
It is highly desirable to have a uniform  national rule. Many employers have  branches in more than one state and  transfer employees from state to state  with some frequency. An employee so  transferred will remain under the same  ERISA plan; but if courts in different  states interpret identical plan language  differently, the employee's rights under  his plan (rights that as a practical  matter include the right of judicial  review) may change with every transfer--  and usually without his knowing it. Maybe  all the holdings can be reconciled; but  there is at least a superficial tension,  a difference in tone and emphasis,  between our cases and Perez, on the one  hand, and the cases in the other circuits  on the other hand, with our cases seeming  more inclined to interpret ambiguous  language in favor of an inference that it  grants discretion to the plan  administrator. We write today to clarify  our position and reduce the tension.  Because we are endeavoring to state a  general rule with which aspects of some  of our decisions may be inconsistent, we  circulated this opinion in advance  ofpublication to all the judges of the  court in regular active service, pursuant  to 7th Cir. R. 40(e); none voted to hear  the case en banc.


3
An ERISA plan is a contract, e.g.,  Anstett v. Eagle-Picher Industries, Inc., 203 F.3d 501, 503 (7th  Cir. Feb. 8, 2000); Mathews v. Sears  Pension Plan, 144 F.3d 461, 465 (7th Cir.  1998); Haley v. Paul Revere Life Ins.  Co., supra, 77 F.3d at 88, and the  meaning of a contract is ordinarily  decided by the court, rather than by a  party to the contract, let alone the  party that drafted it. It is true that  the courts treat an ERISA plan as a  special kind of contract, in order to  confer greater protection on one of the  parties, namely the participant or  beneficiary, than on the other, the plan  administrator (they do this by invoking  their understanding of trust law); and  obviously this particular weighting  favors, in doubtful cases, a presumption  of full judicial review at the behest of  the favored party. See Firestone Tire &  Rubber Co. v. Bruch, 489 U.S. 101 (1989);  see also Van Boxel v. Journal Company  Employees' Pension Trust, 836 F.2d 1048,  1052 (7th Cir. 1987). The Bruch case  makes plenary review the default rule,  that is, the rule to govern when the plan  documents contain no indication of the  scope of judicial review; and it is a  natural and modest extension of Bruch, or  perhaps merely a spelling out of an  implication of it, to construe uncertain  language concerning the scope of judicial  review as favoring plenary review as  well.


4
The same result would follow as a matter  of ordinary contract law, with no ERISA  thumb on the scales. See John H.  Langbein, "The Supreme Court Flunks  Trusts," 1990 Supreme Ct. Rev. 207, 223-  26. It is true that a contract can vary  from the norm by including language which  indicates that one of the parties is to  have discretion to interpret and apply  the contract. Typically this is done by  providing that performance must be to the  promisee's "satisfaction." Even so,  unless it's a contract involving "matters  which are dependent upon the personal  feelings, taste or judgment of the"  promisee, Muka v. Estate of Muka, 517  N.E.2d 673, 677 (Ill. App. 1987), as in a  contract to paint a portrait, "the party  to be satisfied must base his  determination on grounds which are  reasonable and just." Id.; see also Morin  Bldg. Products Co. v. Baystone  Construction, Inc., 717 F.2d 413, 415  (7th Cir. 1983); Wolff v. Smith, 25  N.E.2d 399, 401-03 (Ill. App. 1940);  Gibson v. Cranage, 39 Mich. 49 (1878).  The standard is an objective one and the  scope of judicial review is the same as  it is with respect to any other alleged  breach of contract.


5
An ERISA plan can likewise specify that  the administrator has discretion in  interpreting or applying it (and we're  about to suggest language to make such  specification plain and unequivocal), but  the conferral of discretion is not to be  assumed. Especially not when we consider  the importance of the fringe benefits  covered by ERISA plans to modern  employees. See Langbein, supra, at 208.  An employee's decision with regard to the  purchase of medical insurance and the  provision of resources for retirement  will often depend critically on his  understanding of his rights under his em  ployer's ERISA plan. The very existence  of "rights" under such plans depends on  the degree of discretion lodged in the  administrator. The broader that  discretion, the less solid an entitlement  the employee has and the more important  it may be to him, therefore, to  supplement his ERISA plan with other  forms of insurance. In these  circumstances, the employer should have  to make clear whether a plan confers  solid rights or merely the "right" to  appeal to the discretion of the plan's  administrator.


6
We should do what we can to clarify the  rights and duties of the parties to ERISA  plans. Judges are quick to say what is  prohibited, but perhaps too slow to say  what is permitted and by doing so dispel  legal risk. We have therefore drafted,  and commend to employers, the following  "safe harbor" language for inclusion in  ERISA plans: "Benefits under this plan  will be paid only if the plan  administrator decides in his discretion  that the applicant is entitled to them."  Cf. Bartlett v. Heibl, 128 F.3d 497, 501-  02 (7th Cir. 1997). An ERISA plan that  contains such language will not be open  to being characterized as entitling the  applicant for benefits to plenary  judicial review of a decision turning him  down. Cozzie v. Metropolitan Life Ins.  Co., 140 F.3d 1104, 1107 (7th Cir. 1998);  Hightshue v. AIG Life Ins. Co., 135 F.3d  1144, 1147 (7th Cir. 1998); Anderson v.  Operative Plasterers' & Cement Masons'  Int'l Ass'n Local No. 12 Pension &  Welfare Plans, 991 F.2d 356, 358 (7th  Cir. 1993); Terry v. Bayer Corp., 145  F.3d 28, 37 (1st Cir. 1998). Equally  clearly, the presumption of plenary  review is not rebutted by the plan's  stating merely that benefits will be paid  only if the plan administrator determines  they are due, or only if the applicant  submits satisfactory proof of his  entitlement to them.


7
If only because the courts have  consistently held that there are no  "magic words" determining the scope  ofjudicial review of decisions to deny  benefits, e.g., Mers v. Marriott Int'l  Group Accidental Death & Dismemberment  Plan, 144 F.3d 1014, 1020 (7th Cir.  1998); Sisters of the Third Order of St.  Francis v. Swedish-American Group Health  Benefit Trust, 901 F.2d 1369, 1371 (7th  Cir. 1990); Kinstler v. First Reliance  Standard Life Ins. Co., supra, 181 F.3d  at 251, we forbear to make our "safe  harbor" language mandatory, its absence  compelling the conclusion that the plan  administrator has no discretion. In some  cases the nature of the benefits or the  conditions upon it will make reasonably  clear that the plan administrator is to  exercise discretion. In others the plan  will contain language that, while not so  clear as our "safe harbor" proposal,  indicates with the requisite if minimum  clarity that a discretionary  determination is envisaged. In our Donato  case, for example, the entitlement to  benefits was conditioned on submission of  proof "satisfactory to us" (that is, to  the plan administrator), and we ruled  that the "to us" signaled the subjective,  discretionary character of the judgment  that was to be made. 19 F.3d at 379; see  also Bali v. Blue Cross & Blue Shield  Ass'n, supra, 873 F.2d at 1047. A more  difficult case is Ramsey, where use of  the phrase "as determined by the Company"  in regard to short-term disability  benefits, coupled with the omission of  the phrase in regard to long-term  disability benefits, persuaded the court  that judicial review of the denial of the  latter type of benefit was plenary. 77  F.3d at 205-06. The conclusion was right  but the implication that judicial review  of denial of short-term benefits was not  plenary is open to question, depending as  it does on the kind of lawyerly  comparison of paragraphs that a plan  participant is unlikely to undertake.


8
We hold that the mere fact that a plan  requires a determination of eligibility  or entitlement by the administrator, or  requires proof or satisfactory proof of  the applicant's claim, or requires both a  determination and proof (or satisfactory  proof), does not give the employee  adequate notice that the plan  administrator is to make a judgment  largely insulated from judicial review by  reason of being discretionary. Obviously  a plan will not--could not, consistent  with its fiduciary obligation to the  other participants--pay benefits without  first making a determination that the  applicant was entitled to them. The  statement of this truism in the plan  document implies nothing one way or the  other about the scope of judicial review  of his determination, any more than our  statement that a district court  "determined" this or that telegraphs the  scope of our judicial review of that  determination. That the plan  administrator will not pay benefits until  he receives satisfactory proof of  entitlement likewise states the obvious,  echoing standard language in insurance  contracts not thought to confer any  discretionary powers on the insurer. See  Bounds v. Bell Atlantic Enterprises  Flexible Long-Term Disability Plan,  supra, 32 F.3d at 339; 13A George J.  Couch, Ronald A. Anderson & Mark S.  Rhodes, Couch on Insurance sec. 49A:27  (2d rev. ed. 1982). When an automobile  insurance policy provides that the  insurer will not pay for collision damage  save upon submission of proof of that  damage, all it is saying is that it will  not pay upon the insured's say-so; it  will require proof. There is no reason to  interpret an ERISA plan differently. See  Bounds v. Bell Atlantic Enterprises  Flexible Long-Term Disability Plan,  supra.


9
What may have misled courts in some  cases is the analogy between judicial  review of an ERISA plan administrator's  decision to deny disability benefits and  judicial review of the denial of such  benefits by the Social Security  Administration. (One of the appellants,  Herzberger, did apply for, and receive,  social security disability benefits.)  Judicial review of the latter sort of  denial is of course deferential, and it  is natural to suppose that it should be  deferential in the former case as well.  But the analogy is imperfect, quite apart  from its having been implicitly rejected  by the Supreme Court in Bruch when it  determined that the default standard of  review in ERISA cases is plenary review,  and quite apart from the fact that the  social security statute specifies  deferential ("substantial evidence")  review. 42 U.S.C. sec. 405(g). The Social  Security Administration is a public  agency that denies benefits only after  giving the applicant an opportunity for a  full adjudicative hearing before a  judicial officer, the administrative law  judge. The procedural safeguards thus  accorded, designed to assure a full and  fair hearing, are missing from  determinations by plan administrators. An  ERISA plan can stipulate for deferential  review; it might be entirely rational for  an employee to accede to and even prefer  such a plan--it might be cheaper. But  the stipulation must be clear, and cannot  merely be assumed from language that in  the closely related setting of insurance  contracts has never been thought to  entitle the insurer to exercise a  discretionary judgment in determining  whether to pay an insured's claim. An  employer should not be allowed to get  credit with its employees for having an  ERISA plan that confers solid rights on  them and later, when an employee seeks to  enforce the right, pull a discretionary  judicial review rabbit out of his hat.  The employees are entitled to know what  they're getting into, and so if the  employer is going to reserve a broad,  unchanneled discretion to deny claims,  the employees should be told about this,  and told clearly.


10
This analysis requires us to reverse  both decisions before us. In both the  district court granted summary judgment  for the plan administrator after  concluding that the language of the plan  documents conferred the power of  discretionary judgment on the  administrator. In Herzberger, where the  plaintiff sought disability benefits for  chronic fatigue syndrome and the plan  administrator determined that the  plaintiff's real problem was a mental  disorder, for which the plan placed a  tight lid on the amount of disability  benefits payable, the plan document  provided that the administrator "will pay  the . . . BENEFIT upon receipt of  satisfactory written proof that you have  become DISABLED." For the reasons that we  have explained, this language, standing  alone (and there is nothing to qualify or  amplify it), does not take the plan out  of the default rule entitling the  disappointed applicant to plenary review.  In Johnson, where the plaintiff sought  disability benefits on account of her  fibromyalgia, the plan document provided  that "'Total Disability' exists when [the  plan administrator] determines that all  of these conditions are met." The list  that follows is made up entirely of  objective elements, rather than  subjective elements over which  discretionary power could be presumed  just as in the case of portraits. It is  a list of different ways of asking  whether the applicant is unable to  perform the duties of the job for which  he is reasonably fitted by his training  or experience.


11
We therefore remand these cases for  plenary review, but we conclude with a  glance at two issues that may recur. The  first is whether Prudential's letters  denying Johnson benefits were  sufficiently specific to satisfy 29  C.F.R. sec. 2560.503-1(f)(3), which  requires the plan to specify the  information needed to perfect the  applicant's claim and explain why that  information is necessary. The first  letter was clearly insufficient, and the  subsequent ones merely repeated the  conclusion in the first letter, without  amplification. Second, the fact that  Standard supported Herzberger's  application for social security  disability benefits does not estop it to  deny that she was disabled within the  meaning of the policy, cf. Ladd v. ITT  Corp., 148 F.3d 753, 756 (7th Cir. 1998),  since Standard did not take inconsistent  positions. It consistently conceded that  she was disabled, but argued--what was  relevant only to Herzberger's rights  under the plan, and not to her rights to  social security disability benefits--that  her disability was due to a mental  disorder.


12
Reversed and Remanded.

