(Slip Opinion)              OCTOBER TERM, 2009                                       1

                                       Syllabus

         NOTE: Where it is feasible, a syllabus (headnote) will be released, as is
       being done in connection with this case, at the time the opinion is issued.
       The syllabus constitutes no part of the opinion of the Court but has been
       prepared by the Reporter of Decisions for the convenience of the reader.
       See United States v. Detroit Timber & Lumber Co., 200 U. S. 321, 337.


SUPREME COURT OF THE UNITED STATES

                                       Syllabus

           CONKRIGHT ET AL. v. FROMMERT ET AL.

CERTIORARI TO THE UNITED STATES COURT OF APPEALS FOR
                 THE SECOND CIRCUIT

    No. 08–810.      Argued January 20, 2010—Decided April 21, 2010
Petitioners are Xerox Corporation’s pension plan (Plan) and the Plan’s
  current and former administrators (Plan Administrator). Respon
  dents are employees who left Xerox in the 1980’s, received lump-sum
  distributions of retirement benefits earned up to that point, and were
  later rehired. To account for the past distributions when calculating
  respondents’ current benefits, the Plan Administrator initially inter
  preted the Plan to call for an approach that has come to be known as
  the “phantom account” method. Respondents challenged that method
  in an action under the Employee Retirement Income Security Act of
  1974 (ERISA). The District Court granted summary judgment for
  the Plan, but the Second Circuit vacated and remanded. It held that
  the Plan Administrator’s interpretation was unreasonable and that
  respondents had not received adequate notice that the phantom ac
  count method would be used to calculate their benefits. On remand,
  the Plan Administrator proposed a new interpretation of the Plan
  that accounted for the time value of the money respondents had pre
  viously received. The District Court declined to apply a deferential
  standard to this interpretation, and adopted instead an approach
  proposed by respondents that did not account for the time value of
  money. Affirming in relevant part, the Second Circuit held that the
  District Court was correct not to apply a deferential standard on re
  mand, and that the District Court’s decision on the merits was not an
  abuse of discretion.
Held: The District Court should have applied a deferential standard of
 review to the Plan Administrator’s interpretation of the Plan on re
 mand. Pp. 4–15.
    (a) This Court addressed the standard for reviewing the decisions
 of ERISA plan administrators in Firestone Tire & Rubber Co. v.
2                      CONKRIGHT v. FROMMERT

                                  Syllabus

    Bruch, 489 U. S. 101. Firestone looked to “principles of trust law” for
    guidance. Id., at 111. Under trust law, the appropriate standard de
    pends on the language of the instrument creating the trust. When a
    trust instrument gives the trustee “power to construe disputed or
    doubtful terms, . . . the trustee’s interpretation will not be disturbed
    if reasonable.” Ibid. Under Firestone and the Plan’s terms, the Plan
    Administrator here would normally be entitled to deference when in
    terpreting the Plan. The Court of Appeals, however, crafted an ex
    ception to Firestone deference, holding that a court need not apply a
    deferential standard when a plan administrator’s previous construc
    tion of the same plan terms was found to violate ERISA. Pp. 4–5.
       (b) The Second Circuit’s “one-strike-and-you’re-out” approach has
    no basis in Firestone, which set out a broad standard of deference
    with no suggestion that it was susceptible to ad hoc exceptions. This
    Court held in Metropolitan Life Ins. Co. v. Glenn, 554 U. S. ___, ___,
    that a plan administrator operating under a systemic conflict of in
    terest is nonetheless still entitled to deferential review. In light of
    that ruling, it is difficult to see why a single honest mistake should
    require a different result. Nor is the Second Circuit’s decision sup
    ported by the considerations on which Firestone and Glenn were
    based—the plan’s terms, trust law principles, and ERISA’s purposes.
    The Plan grants the Plan Administrator general interpretive author
    ity without suggesting that the authority is limited to first efforts to
    construe the Plan. An exception to Firestone deference is also not re
    quired by trust law principles, which serve as a guide under ERISA
    but do not “tell the entire story.” Varity Corp. v. Howe, 516 U. S. 489,
    497. Trust law does not resolve the specific question whether courts
    may strip a plan administrator of Firestone deference after one good
    faith mistake, but the guiding principles underlying ERISA do.
       ERISA represents a “ ‘careful balancing’ between ensuring fair and
    prompt enforcement of rights under a plan and the encouragement of
    the creation of such plans.” Aetna Health Inc. v. Davila, 542 U. S.
    200, 215. Firestone deference preserves this “careful balancing” and
    protects the statute’s interests in efficiency, predictability, and uni
    formity. Respondents claim that deference is less important once a
    plan administrator’s interpretation has been found unreasonable, but
    the interests in efficiency, predictability, and uniformity do not sud
    denly disappear simply because of a single honest mistake, as illus
    trated by this case. When the District Court declined to apply a def
    erential standard of review on remand, the court made the case more
    complicated than necessary. Respondents’ approach threatens to in
    terject additional issues into ERISA litigation that “would create fur
    ther complexity, adding time and expense to a process that may al
    ready be too costly for many [seeking] redress.” Glenn, supra, at ___.
                     Cite as: 559 U. S. ____ (2010)                    3

                                Syllabus

  This case also demonstrates the harm to predictability and uniform
  ity that would result from stripping a plan administrator of Firestone
  deference. The District Court’s interpretation does not account for
  the time value of money, but respondents’ own actuarial expert testi
  fied that fairness required recognizing that principle. Respondents
  do not dispute that the District Court’s approach would place them in
  a better position than employees who never left the company. If
  other courts construed the Plan to account for the time value of
  money, moreover, Xerox could be placed in an impossible situation in
  which the Plan is subject to different interpretations and obligations
  in different States. Pp. 5–13.
     (c) Respondents claim that plan administrators will adopt unrea
  sonable interpretations of their plans seriatim, receiving deference
  each time, thereby undermining the prompt resolution of benefit dis
  putes, driving up litigation costs, and discouraging employees from
  challenging administrators’ decisions. These concerns are overblown
  because there is no reason to think that deference would be required
  in the extreme circumstances that respondents foresee. Multiple er
  roneous interpretations of the same plan provision, even if issued in
  good faith, could support a finding that a plan administrator is too
  incompetent to exercise his discretion fairly, cutting short the rounds
  of costly litigation that respondents fear. Applying a deferential
  standard of review also does not mean that the plan administrator
  will always prevail on the merits. It means only that the plan admin
  istrator’s interpretation “will not be disturbed if reasonable.” Fire
  stone, 489 U. S., at 111. The lower courts should have applied the
  standard established in Firestone and Glenn. Pp. 13–14.
535 F. 3d 111, reversed and remanded.

  ROBERTS, C. J., delivered the opinion of the Court, in which SCALIA,
KENNEDY, THOMAS, and ALITO, JJ., joined. BREYER, J., filed a dissenting
opinion, in which STEVENS and GINSBURG, JJ., joined. SOTOMAYOR, J.,
took no part in the consideration or decision of the case.
                        Cite as: 559 U. S. ____ (2010)                              1

                             Opinion of the Court

     NOTICE: This opinion is subject to formal revision before publication in the
     preliminary print of the United States Reports. Readers are requested to
     notify the Reporter of Decisions, Supreme Court of the United States, Wash
     ington, D. C. 20543, of any typographical or other formal errors, in order
     that corrections may be made before the preliminary print goes to press.


SUPREME COURT OF THE UNITED STATES
                                   _________________

                                   No. 08–810
                                   _________________


SALLY L. CONKRIGHT, ET AL., PETITIONERS v. PAUL
             J. FROMMERT ET AL.
 ON WRIT OF CERTIORARI TO THE UNITED STATES COURT OF

           APPEALS FOR THE SECOND CIRCUIT

                                 [April 21, 2010] 


  CHIEF JUSTICE ROBERTS delivered the opinion of the
Court.
  People make mistakes. Even administrators of ERISA
plans. That should come as no surprise, given that the
Employee Retirement Income Security Act of 1974 is “an
enormously complex and detailed statute,” Mertens v.
Hewitt Associates, 508 U. S. 248, 262 (1993), and the plans
that administrators must construe can be lengthy and
complicated. (The one at issue here runs to 81 pages, with
139 sections.) We held in Firestone Tire & Rubber Co. v.
Bruch, 489 U. S. 101 (1989), that an ERISA plan adminis
trator with discretionary authority to interpret a plan is
entitled to deference in exercising that discretion. The
question here is whether a single honest mistake in plan
interpretation justifies stripping the administrator of that
deference for subsequent related interpretations of the
plan. We hold that it does not.
                             I
  As in many ERISA matters, the facts of this case are
exceedingly complicated. Fortunately, most of the factual
details are unnecessary to the legal issues before us, so we
2                CONKRIGHT v. FROMMERT

                     Opinion of the Court

cover them only in broad strokes. This case concerns
Xerox Corporation’s pension plan, which is covered by
ERISA, 88 Stat. 829, as amended, 29 U. S. C. §1001 et seq.
Petitioners are the plan itself (hereinafter Plan), and the
Plan’s current and former administrators (hereinafter
Plan Administrator). See §1002(16)(A)(i); App. 32a. Re
spondents are Xerox employees who left the company in
the 1980’s, received lump-sum distributions of retirement
benefits they had earned up to that point, and were later
rehired. See 328 F. Supp. 2d 420, 424 (WDNY 2004); Brief
for Respondents 9–10. The dispute giving rise to this case
concerns how to account for respondents’ past distribu
tions when calculating their current benefits—that is, how
to avoid paying respondents the same benefits twice.
   The Plan Administrator initially interpreted the Plan to
call for an approach that has come to be known as the
“phantom account” method. 328 F. Supp. 2d, at 424.
Essentially, that method calculated the hypothetical
growth that respondents’ past distributions would have
experienced if the money had remained in Xerox’s invest
ment funds, and reduced respondents’ present benefits
accordingly. See id., at 426–428; App. to Pet. for Cert.
146a. After the Plan Administrator denied respondents’
administrative challenges to that method, respondents
filed suit in federal court under ERISA, 29 U. S. C.
§1132(a)(1)(B). See 328 F. Supp. 2d, at 428–429. The
District Court granted summary judgment for the Plan,
applying a deferential standard of review to the Plan
Administrator’s interpretation. See id., at 430–431, 439.
The Second Circuit vacated and remanded, holding that
the Plan Administrator’s interpretation was unreasonable
and that respondents had not been adequately notified
that the phantom account method would be used to calcu
late their benefits. See 433 F. 3d 254, 257, 265–269
(2006).
   The phantom account method having been exorcised
                 Cite as: 559 U. S. ____ (2010)           3

                     Opinion of the Court

from the Plan, the District Court on remand considered
other approaches for adjusting respondents’ present bene
fits in light of their past distributions. See 472 F. Supp.
2d 452, 456–458 (WDNY 2007). The Plan Administrator
submitted an affidavit proposing an approach that, like
the phantom account method, accounted for the time value
of the money that respondents had previously received.
But unlike the phantom account method, the Plan Admin
istrator’s new approach did not calculate the present value
of a past distribution based on events that occurred after
the distribution was made. Instead, the new approach
used an interest rate that was fixed at the time of the
distribution, thereby calculating the current value of the
distribution based on information that was known at the
time of the distribution. See App. to Pet. for Cert. 147a–
153a. Petitioners argued that the District Court should
apply a deferential standard of review to this approach,
and accept it as a reasonable interpretation of the Plan.
See Defendants’ Pre-Hearing Brief Addressed to Remedies
in No. 00–CV–6311 (WDNY), pp. 7–8; Defendants’ Pre-
Hearing Reply Brief Addressing Remedies in No. 00–CV–
6311 (WDNY), p. 2.
   The District Court did not apply a deferential standard
of review. Nor did it accept the Plan Administrator’s
interpretation. Instead, after finding the Plan to be am
biguous, the District Court adopted an approach proposed
by respondents that did not account for the time value of
money. Under that approach, respondents’ present bene
fits were reduced only by the nominal amount of their past
distributions—thereby treating a dollar distributed to
respondents in the 1980’s as equal in value to a dollar
distributed today. See 472 F. Supp. 2d, at 457–458. The
Second Circuit affirmed in relevant part, holding that the
District Court was correct not to apply a deferential stan
dard on remand, and that the District Court’s decision on
the merits was not an abuse of discretion. See 535 F. 3d
4                CONKRIGHT v. FROMMERT

                     Opinion of the Court

111, 119 (2008).
   Petitioners asked us to grant certiorari on two ques
tions: (1) whether the District Court owed deference to the
Plan Administrator’s interpretation of the Plan on re
mand, and (2) whether the Court of Appeals properly
granted deference to the District Court on the merits. Pet.
for Cert. i. We granted certiorari on both, 557 U. S. ___
(2009), but find it necessary to decide only the first.
                              II
                               A
   This Court addressed the standard for reviewing the
decisions of ERISA plan administrators in Firestone, 489
U. S. 101. Because ERISA’s text does not directly resolve
the matter, we looked to “principles of trust law” for guid
ance. Id., at 109, 111. We recognized that, under trust
law, the proper standard of review of a trustee’s decision
depends on the language of the instrument creating the
trust. See id., at 111–112. If the trust documents give the
trustee “power to construe disputed or doubtful terms, . . .
the trustee’s interpretation will not be disturbed if reason
able.” Id., at 111. Based on these considerations, we held
that “a denial of benefits challenged under §1132(a)(1)(B)
is to be reviewed under a de novo standard unless the
benefit plan gives the administrator or fiduciary discre
tionary authority to determine eligibility for benefits or to
construe the terms of the plan.” Id., at 115.
   We expanded Firestone’s approach in Metropolitan Life
Ins. Co. v. Glenn, 554 U. S. ___ (2008). In determining the
proper standard of review when a plan administrator
operates under a conflict of interest, we again looked to
trust law, the terms of the plan at issue, and the principles
of ERISA—plus, of course, our precedent in Firestone. See
554 U. S., at ___ (slip op., at 4, 6–7, 9–10). We held that,
when the terms of a plan grant discretionary authority to
the plan administrator, a deferential standard of review
                   Cite as: 559 U. S. ____ (2010)               5

                       Opinion of the Court

remains appropriate even in the face of a conflict. See id.,
at ___ (slip op., at 9).
  It is undisputed that, under Firestone and the terms of
the Plan, the Plan Administrator here would normally be
entitled to deference when interpreting the Plan. See 328
F. Supp. 2d, at 430–431 (observing that the Plan grants
the Plan Administrator “broad discretion in making deci
sions relative to the Plan”). The Court of Appeals, how
ever, crafted an exception to Firestone deference. Specifi
cally, the Second Circuit held that a court need not apply a
deferential standard “where the administrator ha[s] previ
ously construed the same [plan] terms and we found such
a construction to have violated ERISA.” 535 F. 3d, at 119.
Under that view, the District Court here was entitled to
reject a reasonable interpretation of the Plan offered by
the Plan Administrator, solely because the Court of Ap
peals had overturned a previous interpretation by
the Administrator.       Cf. ibid. (accepting the District
Court’s chosen method as one of “several reasonable
alternatives”).
                               B
  We reject this “one-strike-and-you’re-out” approach.
Brief for Petitioners 51. As an initial matter, it has no
basis in the Court’s holding in Firestone, which set out a
broad standard of deference without any suggestion that
the standard was susceptible to ad hoc exceptions like the
one adopted by the Court of Appeals. See 489 U. S., at
111, 115. Indeed, we refused to create such an exception
to Firestone deference in Glenn, recognizing that ERISA
law was already complicated enough without adding
“special procedural or evidentiary rules” to the mix. 554
U. S., at ___ (slip op., at 10). If, as we held in Glenn, a
systemic conflict of interest does not strip a plan adminis
trator of deference, see id., at ___ (slip op., at 9), it is diffi
cult to see why a single honest mistake would require a
6                CONKRIGHT v. FROMMERT

                      Opinion of the Court

different result.
  Nor is the Court of Appeals’ decision supported by the
considerations on which our holdings in Firestone and
Glenn were based—namely, the terms of the plan, princi
ples of trust law, and the purposes of ERISA. See supra,
at 4–5. First, the Plan here grants the Plan Administrator
general authority to “[c]onstrue the Plan.” App. to Pet. for
Cert. 141a–142a. Nothing in that provision suggests that
the grant of authority is limited to first efforts to construe
the Plan.
  Second, the Court of Appeals’ exception to Firestone
deference is not required by principles of trust law. Trust
law is unclear on the narrow question before us. A leading
treatise states that a court will strip a trustee of his dis
cretion when there is reason to believe that he will not
exercise that discretion fairly—for example, upon a show
ing that the trustee has already acted in bad faith:
    “If the trustee’s failure to pay a reasonable amount [to
    the beneficiary of the trust] is due to a failure to exer
    cise [the trustee’s] discretion honestly and fairly, the
    court may well fix the amount [to be paid] itself. On
    the other hand, if the trustee’s failure to provide rea
    sonably for the beneficiary is due to a mistake as to
    the trustee’s duties or powers, and there is no reason
    to believe the trustee will not fairly exercise the dis
    cretion once the court has determined the extent of
    the trustee’s duties and powers, the court ordinarily
    will not fix the amount but will instead direct the
    trustee to make reasonable provision for the benefici
    ary’s support.” 3 A. Scott, W. Fratcher, & M. Ascher,
    Scott and Ascher on Trusts §18.2.1, pp. 1348–1349
    (5th ed. 2007) (hereinafter Scott and Ascher) (footnote
    omitted) (citing cases).
This is not surprising—if the settlor who creates a trust
grants discretion to the trustee, it seems doubtful that the
                      Cite as: 559 U. S. ____ (2010)                       7

                           Opinion of the Court

settlor would want the trustee divested entirely of that
discretion simply because of one good-faith mistake.1
  Here the lower courts made no finding that the Plan
Administrator had acted in bad faith or would not fairly
exercise his discretion to interpret the terms of the Plan.
Thus, if the District Court had followed the trust law
principles set out in Scott and Ascher, it should not have
“act[ed] as a substitute trustee,” Eaton v. Eaton, 82 N. H.
216, 218, 132 A. 10, 11 (1926), and stripped the Plan

——————
  1 The   dissent is wrong to suggest a lack of case support for this inter
pretation of trust law. Post, at 10–12 (opinion of BREYER, J.). See, e.g.,
Hanford v. Clancy, 87 N. H. 458, 461, 183 A. 271, 272–273 (1936)
(“Affirmative orders of disposition, such as the court made in this case,
may only be sustained if, under the circumstances, there is but one
reasonable disposition possible. If more than one reasonable disposi
tion could be made, then the trustee must make the choice” (emphasis
added)); In re Sullivan’s Will, 144 Neb. 36, 40–41, 12 N. W. 2d 148,
150–151 (1943) (although trustees erred in not providing any support to
plaintiff, “the court was without authority to determine the amount of
support to which plaintiff was entitled from the trust fund” because
“the court has no authority to substitute its judgment for that of the
trustees” (emphasis added)); Eaton v. Eaton, 82 N. H. 216, 218–219,
132 A. 10, 11 (1926) (“[The trustee’s] failure to administer the fund
properly did not entitle the court to act as a substitute trustee. . . .
[W]ithin the limits of reasonableness the trustee alone may exercise
discretion, since that is what the will requires” (emphasis added) (cited
in 3 A. Scott & W. Fratcher, Law of Trusts §187.1, pp. 30–31 (4th ed.
1988))); In re Marre’s Estate, 18 Cal. 2d 184, 190, 114 P. 2d 586, 590–
591 (1941) (lower court erred in setting amount of payments to benefi
ciary after ruling that trustees had mistakenly failed to make payment;
“[i]t is well settled that the courts will not attempt to exercise discretion
which has been confided to a trustee unless it is clear that the trustee
has abused his discretion in some manner. . . . The amounts to be paid
should therefore be determined in the discretion of the trustees” (cited
in 3 Scott and Ascher 1349, n. 4 (5th ed. 2007))); Finch v. Wachovia
Bank & Trust Co., 156 N. C. App. 343, 348, 577 S. E. 2d 306, 310 (2003)
(agreeing with lower court that trustee abused its discretion, but
vacating the court’s remedial order because it would “strip discretion
from the trustee and replace it with the judgment of the court”). See
also Brief for Petitioners 40–43.
8                CONKRIGHT v. FROMMERT

                     Opinion of the Court

Administrator of the deference he would otherwise enjoy
under Firestone and the terms of the Plan.
  Other trust law sources, however, point the other way.
For example, the Restatement (Second) of Trusts states
that “the court will control the trustee in the exercise of a
power where he acts beyond the bounds of a reasonable
judgment.” Restatement (Second) of Trusts §187, Com
ment i, p. 406 (1957). Another treatise states that, after a
trustee has abused his discretion, “[s]ometimes the court
decides for the trustee how he should act, either by stating
the exact result it desires to achieve, or by fixing some
limits on the trustee’s action and giving him leeway within
those limits.” G. Bogert & G. Bogert, Law of Trusts and
Trustees §560, p. 223 (2d rev. ed. 1980).
  The unclear state of trust law on the question was per
haps best captured by the Texas Supreme Court:
    “There is authority for ordering a dismissal of the case
    to afford the trustee an opportunity to exercise a rea
    sonable discretion in arriving at the amount of pay
    ments to be made in the light of our discussion of the
    problem and after a proper consideration of the many
    factors involved. On the other hand, there is author
    ity for remanding the case to the trial court to hear
    evidence and in the exercise of its supervisory juris
    diction to fix the amount of such payments. There is
    still other authority for remanding the case to the
    trial court to hear evidence and fix the boundaries of a
    reasonable discretion to be exercised by the trustee
    within maximum and minimum limits.” State v.
    Rubion, 158 Tex. 43, 54–55, 308 S. W. 2d 4, 11 (1957)
    (citations omitted).
  While we are “guided by principles of trust law” in
ERISA cases, Firestone, 489 U. S., at 111, we have recog
nized before that “trust law does not tell the entire story,”
Varity Corp. v. Howe, 516 U. S. 489, 497 (1996); see ibid.
                 Cite as: 559 U. S. ____ (2010)            9

                     Opinion of the Court

(“In some instances, trust law will offer only a starting
point, after which courts must go on to ask whether, or to
what extent, the language of the statute, its structure, or
its purposes require departing from common-law trust
requirements”); Brief for Respondents 50 (pressing same
view as the dissent but concluding that the dispute over
trust law “need not be resolved”). Here trust law does not
resolve the specific issue before us, but the guiding princi
ples we have identified underlying ERISA do.
   Congress enacted ERISA to ensure that employees
would receive the benefits they had earned, but Congress
did not require employers to establish benefit plans in the
first place. Lockheed Corp. v. Spink, 517 U. S. 882, 887
(1996). We have therefore recognized that ERISA repre
sents a “ ‘careful balancing’ between ensuring fair and
prompt enforcement of rights under a plan and the en
couragement of the creation of such plans.” Aetna Health
Inc. v. Davila, 542 U. S. 200, 215 (2004) (quoting Pilot Life
Ins. Co. v. Dedeaux, 481 U. S. 41, 54 (1987)). Congress
sought “to create a system that is [not] so complex that
administrative costs, or litigation expenses, unduly dis
courage employers from offering [ERISA] plans in the first
place.” Varity Corp., supra, at 497. ERISA “induc[es]
employers to offer benefits by assuring a predictable set of
liabilities, under uniform standards of primary conduct
and a uniform regime of ultimate remedial orders and
awards when a violation has occurred.” Rush Prudential
HMO, Inc. v. Moran, 536 U. S. 355, 379 (2002).
   Firestone deference protects these interests and, by
permitting an employer to grant primary interpretive
authority over an ERISA plan to the plan administrator,
preserves the “careful balancing” on which ERISA is
based. Deference promotes efficiency by encouraging
resolution of benefits disputes through internal adminis
trative proceedings rather than costly litigation. It also
promotes predictability, as an employer can rely on the
10               CONKRIGHT v. FROMMERT

                      Opinion of the Court

expertise of the plan administrator rather than worry
about unexpected and inaccurate plan interpretations that
might result from de novo judicial review. Moreover,
Firestone deference serves the interest of uniformity,
helping to avoid a patchwork of different interpretations of
a plan, like the one here, that covers employees in differ
ent jurisdictions—a result that “would introduce consider
able inefficiencies in benefit program operation, which
might lead those employers with existing plans to reduce
benefits, and those without such plans to refrain from
adopting them.” Fort Halifax Packing Co. v. Coyne, 482
U. S. 1, 11 (1987). Indeed, a group of prominent actuaries
tells us that it is impossible even to determine whether an
ERISA plan is solvent (a duty imposed on actuaries by
federal law, see 29 U. S. C. §§1023(a)(4), (d)) if the plan is
interpreted to mean different things in different places.
See Brief for Chief Actuaries as Amici Curiae 5–11.
   Respondents and the United States as amicus curiae do
not question that deference to plan administrators serves
these important purposes. Rather, they argue that defer
ence is less important once a plan administrator has is
sued an interpretation of a plan found to be unreasonable.
But the interests in efficiency, predictability, and uniform
ity—and the manner in which they are promoted by defer
ence to reasonable plan construction by administrators—
do not suddenly disappear simply because a plan adminis
trator has made a single honest mistake.
   This case illustrates the point. Consider first the inter
est in efficiency, an interest that Xerox has pursued by
granting the Plan Administrator authority to construe the
Plan. On remand from the Court of Appeals, if the Dis
trict Court had applied a deferential standard of review
under Firestone, the question before it would have been
whether the Plan Administrator’s interpretation of the
Plan was reasonable. After answering that question, the
case might well have been over. Instead, the District
                 Cite as: 559 U. S. ____ (2010)           11

                     Opinion of the Court

Court declined to defer, and therefore had to answer the
more complicated question of how best to interpret the
Plan.
   The prospect of increased litigation costs inherent in
respondents’ approach does not end there. Under respon
dents’ and the Government’s view, the question whether a
deferential standard of review was required in this case
turns on whether the Plan Administrator was interpreting
the “same terms” or deciding the “same issue” on remand.
See Brief for Respondents 43, 46–48, 53, and n. 13; Brief
for United States as Amicus Curiae 13–15, 23. Whether
that condition is satisfied will not always be clear. Indeed,
petitioners dispute that question here, arguing that the
Plan Administrator confronted an entirely new issue on
remand—how to interpret the Plan, knowing that specific
provisions requiring use of the phantom account method
could not be applied to respondents due to a lack of notice.
See Brief for Petitioners 50–51. Respondents would force
the parties to litigate this potentially complicated “same
issue” or “same terms” question before a district court
could even decide whether deference is owed to a plan
administrator’s view. As we recognized in Glenn, there is
little place in the ERISA context for these sorts of “special
procedural rules [that] would create further complexity,
adding time and expense to a process that may already be
too costly for many of those who seek redress.” 554 U. S.,
at ___ (slip op., at 10).
   The position of respondents and the Government could
interject other additional issues into ERISA litigation. For
example, even under their view, the District Court here
could have granted deference to the Plan Administrator;
the court merely was not required to do so. See Brief for
Respondents 43, 49–50, 52–53; Brief for United States as
Amicus Curiae 23–24. That raises the question of how a
court is to decide between the two options; respondents’
answer is to weigh an indeterminate number of factors,
12               CONKRIGHT v. FROMMERT

                     Opinion of the Court

which would only further complicate ERISA proceedings.
See Tr. of Oral Arg. 34, 40–45.
  This case also demonstrates the harm to the interest in
predictability that would result from stripping a plan
administrator of Firestone deference. After declining to
apply a deferential standard here, the District Court
adopted an interpretation of the Plan that does not ac
count for the time value of money. 472 F. Supp. 2d, at
458; 535 F. 3d, at 119. In the actuarial world, this is
heresy, and highly unforeseeable. Indeed, the actuaries
tell us that they have never encountered an ERISA plan
resembling this one that did not include some adjustment
for the time value of money. Brief for Chief Actuaries as
Amici Curiae 12.
  Respondents’ own actuarial expert testified before the
District Court that fairness would require recognizing the
time value of money in some fashion. See App. 127a,
130a. And respondents and the Government do not dis
pute that the District Court’s approach, which does not
account for the fact that respondents were able to use
their past distributions as they saw fit for over 20 years,
would place respondents in a better position than employ
ees who never left the company. Cf. Brief for Respondents
42–43; Brief for United States as Amicus Curiae 32–33.
Deference to plan administrators, who have a duty to all
beneficiaries to preserve limited plan assets, see Varity
Corp., 516 U. S., at 514, helps prevent such windfalls for
particular employees.
  Finally, this case demonstrates the uniformity problems
that arise from creating ad hoc exceptions to Firestone
deference. If other courts were to adopt an interpretation
of the Plan that does account for the time value of money,
Xerox could be placed in an impossible situation. Similar
Xerox employees could be entitled to different benefits
depending on where they live, or perhaps where they bring
a legal action. Cf. 29 U. S. C. §1132(e)(2) (permitting suit
                 Cite as: 559 U. S. ____ (2010)           13

                     Opinion of the Court

“where the plan is administered, where the breach took
place, or where a defendant resides or may be found”). In
fact, that may already be the case. In similar litigation
over the Plan, the Ninth Circuit also rejected the use of
the phantom account method, but held that the Plan
Administrator should utilize actuarial principles in ac
counting for rehired employees’ past distributions—which
would presumably include taking some cognizance of the
time value of money. See Miller v. Xerox Corp. Retirement
Income Guarantee Plan, 464 F. 3d 871, 875–876 (2006);
Brief for ERISA Industry Committee and American Bene
fits Council as Amici Curiae 8–9. Thus, failing to defer to
the Plan Administrator here could well cause the Plan to
be subject to different interpretations in California and
New York. “Uniformity is impossible, however, if plans
are subject to different legal obligations in different
States.” Egelhoff v. Egelhoff, 532 U. S. 141, 148 (2001).
Firestone deference serves to avoid that result and to
preserve the “careful balancing” of interests that ERISA
represents. Pilot Life Ins. Co., 481 U. S., at 54.
                               C
   In spite of all this, respondents and the Government
argue that requiring the District Court to apply Firestone
deference in this case would actually disserve the purposes
of ERISA. They argue that continued deference would
encourage plan administrators to adopt unreasonable
interpretations of plans in the first instance, as adminis
trators would anticipate a second chance to interpret their
plans if their first interpretations were rejected. And they
argue that plan administrators would be able to proceed
seriatim through several interpretations of their plans,
each time receiving deference, thereby undermining the
prompt resolution of disputes over benefits, driving up
litigation costs, and discouraging employees from chal
lenging the decisions of plan administrators at all.
14               CONKRIGHT v. FROMMERT

                     Opinion of the Court

   All this is overblown. There is no reason to think that
deference would be required in the extreme circumstances
that respondents foresee. Under trust law, a trustee may
be stripped of deference when he does not exercise his
discretion “honestly and fairly.” 3 Scott and Ascher 1348.
Multiple erroneous interpretations of the same plan provi
sion, even if issued in good faith, might well support a
finding that a plan administrator is too incompetent to
exercise his discretion fairly, cutting short the rounds of
costly litigation that respondents fear.
   Applying a deferential standard of review does not mean
that the plan administrator will prevail on the merits. It
means only that the plan administrator’s interpretation of
the plan “will not be disturbed if reasonable.” Firestone,
489 U. S., at 111; see also ibid. (“ ‘Where discretion is
conferred upon the trustee with respect to the exercise of a
power, its exercise is not subject to control by the court
except to prevent an abuse by the trustee of his discre
tion’ ” (quoting Restatement (Second) of Trusts §187)).
Thus, far from “impos[ing] [a] rigid and inflexible re
quirement” that courts must defer to plan administrators,
post, at 8, we simply hold that the lower courts should
have applied the standard established in Firestone and
Glenn.
                            III
   The Court of Appeals erred in holding that the District
Court could refuse to defer to the Plan Administrator’s
interpretation of the Plan on remand, simply because the
Court of Appeals had found a previous related interpreta
tion by the Administrator to be invalid. Because we re
verse on that ground, we do not reach the question
whether the Court of Appeals also erred in applying a
deferential standard of review to the decision of the Dis
                    Cite as: 559 U. S. ____ (2010)                  15

                         Opinion of the Court

trict Court on the merits.2
   The judgment of the Court of Appeals for the Second
Circuit is reversed, and the case is remanded for further
proceedings consistent with this opinion.
                                          It is so ordered.

  JUSTICE SOTOMAYOR took no part in the consideration
or decision of this case.




——————
  2 The Government raises an additional argument—that the District

Court should not have deferred to the Plan Administrator’s second
interpretation of the Plan because that interpretation would have
violated ERISA’s notice requirements. See Brief for United States as
Amicus Curiae 25–26. That is an argument about the merits, not the
proper standard of review, and we leave it to be decided, if necessary,
on remand.
                 Cite as: 559 U. S. ____ (2010)            1

                     BREYER, J., dissenting

SUPREME COURT OF THE UNITED STATES
                         _________________

                          No. 08–810
                         _________________


SALLY L. CONKRIGHT, ET AL., PETITIONERS v. PAUL
             J. FROMMERT ET AL.
 ON WRIT OF CERTIORARI TO THE UNITED STATES COURT OF

           APPEALS FOR THE SECOND CIRCUIT

                        [April 21, 2010] 


  JUSTICE BREYER, with whom JUSTICE STEVENS and
JUSTICE GINSBURG join, dissenting.
  I agree with the Court that “[p]eople make mistakes,”
ante, at 1, but I do not share its view of the law applicable
to those mistakes. To explain my view, I shall describe the
three significant mistakes involved in this case.
                             I

                             A

  The first mistake is that of Xerox Corporation’s pension
plan (Plan) and its administrators (collectively, Plan
Administrator), petitioners here. The Plan, as I under­
stand it, pays employees the highest of three benefits upon
retirement. App. 29a–31a. These benefits are calculated
as follows (I simplify and use my own words, not those of
the Plan):
    (1) “The Pension”: Take your average salary for your
    five highest salary years at Xerox; multiply by 1.4 per­
    cent; and multiply again by the number of years you
    worked at Xerox (up to 30). Id., at 7a–11a, 29a–30a.
    Thus, if the average salary of your five highest paid
    years was $50,000 and you worked at Xerox for 30
    years, you would be entitled to receive $21,000 per
    year ($50,000 × 1.4 percent × 30).
    (2) “The Cash Account”: Every year, Xerox credits 5
2               CONKRIGHT v. FROMMERT

                    BREYER, J., dissenting

    percent of your salary to a cash account. Id., at 40a.
    This account accrues interest at a yearly fixed rate 1
    percent above the 1-year Treasury bill rate. Id., at
    41a. To determine your benefits under this approach,
    take the balance of your cash account and convert the
    final amount to an annuity. Id., at 31a. Thus, if you
    have accrued, say, $200,000 in your account and the
    relevant annuity rate at the time of your retirement is
    7 percent, you would be entitled to receive approxi­
    mately $14,000 per year upon your retirement (ap­
    proximately $200,000 ×7 percent).
    (3) “The Investment Account”: Before 1990, Xerox
    contributed to an employee profit sharing plan. Id., at
    33a–34a. Thus, all employees who were hired by the
    end of 1989 have an investment account that consists
    of all of the contributions Xerox made to this profit
    sharing plan (prior to its discontinuation) and the in­
    vestment returns on those contributions. Id., at 33a–
    36a. To determine your benefits under this approach,
    take the balance of your investment account and con­
    vert the final amount to an annuity. Id., at 31a.
    Thus, just like the cash account, if you have accrued
    $400,000 in your account and the relevant annuity
    rate at the time of your retirement is 7 percent, you
    would be entitled to receive approximately $28,000
    per year upon your retirement (approximately
    $400,000 × 7 percent).
Given these three examples, the retiring employee’s pen­
sion would come from the investment account, and the
employee would receive $28,000 per year.
  This case concerns one aspect of Xerox’s retirement
plan, namely, the way in which the Plan treats employees
who leave Xerox and later return, working for additional
years before their ultimate retirement. The Plan has long
treated such leaving-and-returning employees as follows
                 Cite as: 559 U. S. ____ (2010)           3

                    BREYER, J., dissenting

(again, I simplify and use my own words):
   First, when an employee initially leaves, she is paid a
lump-sum distribution equivalent to the benefits she has
accrued up to that point (i.e., the highest of her pension,
her cash account, or, if she was hired before the end of
1989, her investment account). See ante, at 2.
   Second, when the employee returns, she again begins to
accrue amounts in her cash account, App. 40a–41a, start­
ing from scratch. (She accrues nothing in her investment
account, because Xerox no longer makes profit sharing
contributions. Id., at 34a.) Thus, by the time of her re­
tirement the employee may not have accrued much money
in this account.
   Third, a rehired employee’s pension is calculated in the
way I have set forth above, with her entire tenure at Xerox
(both before her departure and after her return) taken into
account. See Brief for Petitioners 9–10.
   Fourth, the employee’s benefits calculation is adjusted
to take account of the fact that the employee has already
received a lump-sum distribution from the Plan. See App.
32a; Brief for Petitioners 10–11.
   This case is about the adjustment that takes place dur­
ing step four. It concerns the way in which the Plan Ad­
ministrator calculates that adjustment so as to reflect the
fact that a retiring leaving-and-returning employee has
already received a distribution when she initially left
Xerox. Before 1989, the Plan Administrator calculated the
adjusted amount by taking the benefits distribution previ­
ously received (say, $100,000) and adjusting it to equal the
amount that would have existed in the investment account
had no distribution been made. Ibid. Thus, if an employee
had not left Xerox, and if the $100,000 had been left in her
investment account for, say, 20 years, that amount would
likely have increased dramatically—perhaps doubling,
tripling, or quadrupling in amount, depending upon how
well the Plan’s investments performed.
4                CONKRIGHT v. FROMMERT

                    BREYER, J., dissenting

   It is this hypothetical sum—termed the “phantom ac­
count,” ante, at 2—that is at issue in this case. Xerox’s
pre-1989 Plan assumed that a rehired employee had this
hypothetical sum on hand at the time of her final retire­
ment from the company, and in effect subtracted the
amount from the employee’s benefits upon her departure.
Brief for Petitioners 10–11; cf. ante, at 2. Depending on
how the Plan’s investments did over time, the Administra­
tor’s use of this “phantom account” could have a substan­
tial impact on a rehired employee’s benefits. (See Appen­
dix, infra, for an example of how this “phantom account”
works.)
   When the Plan Administrator amended Xerox’s Em­
ployee Retirement Income Security Act of 1974 (ERISA)
Plan in 1989, however, it made what it tells us was an
“inadverten[t]” omission. Brief for Petitioners 11, n. 3. In
a section of the 1989 Plan applicable to the roughly 100
leaving-and-returning employees who are plaintiffs here,
the Plan said that it would “offset” the retiring employees’
“accrued benefit” (as ordinarily calculated) “by the accrued
benefit attributable” to the prior lump-sum “distribution”
those employees received when they initially left Xerox.
App. 32a. But the Plan said nothing about how it would
calculate this “offset.” In other words, the Plan said noth­
ing about the Administrator’s use of the “phantom ac­
count.”
   This led to the first mistake in this case. Despite the
Plan’s failure to include language explaining how the
Administrator would take into account an employee’s prior
distribution, the Plan Administrator continued to employ
the “phantom account” methodology. In essence, the
Administrator read the 1989 Plan to include the language
that had been omitted—an interpretation that, as de­
scribed below, see Part I–B, infra, the Court of Appeals
found to be arbitrary and capricious and in violation of
ERISA.
                  Cite as: 559 U. S. ____ (2010)            5

                     BREYER, J., dissenting

                               B
   The District Court committed the second mistake in this
case. In 1999, the respondents, nearly 100 employees who
left and were later rehired by Xerox, brought this lawsuit.
Ante, at 2; Brief for Petitioners ii–iii, 12. They pointed out
that the 1989 Plan said that it would decrease their re­
tirement benefits to reflect the fact that they had already
received a lump-sum benefits distribution when they
initially left Xerox. But, they added, neither the 1989
Plan, nor the 1989 Plan’s Summary Plan Description, said
anything about whether (or how) the Administrator would
adjust their previous benefits distribution to take into
account that they had received the distribution well before
their retirement. They thus claimed that the Plan Admin­
istrator could not use the “phantom account” methodology
to adjust their previous distributions. See Brief for United
States as Amicus Curiae 4–5.
   The District Court, however, rejected respondents’
claims. 328 F. Supp. 2d 420 (WDNY 2004). The court
accepted the Administrator’s argument that the 1989 Plan
implicitly incorporated the “phantom account” approach
that had previously been part of Xerox’s retirement plan.
Id., at 433–434. And the court thus held in favor of peti­
tioners—thereby committing the second mistake in this
case. Id., at 439.
   On appeal, the Second Circuit disagreed with the Dis­
trict Court and vacated the District Court’s decision in
relevant part. 433 F. 3d 254 (2006). The Court of Appeals
concluded that, because the 1989 Plan said nothing about
how the Administrator would adjust the previous benefits
distributions, it was “arbitrary and capricious” for the
Administrator to interpret the 1989 Plan as if it still in­
corporated the “phantom account.” Id., at 265–266, and
n. 11. And the Court of Appeals thus held that the lan­
guage of the Plan and the Summary Plan Description, at
the least, violated ERISA by failing to provide respondents
6                CONKRIGHT v. FROMMERT

                    BREYER, J., dissenting

with fair notice that the Administrator was going to use
the “phantom account” approach. See id., at 265 (discuss­
ing 29 U. S. C. §1022); see also 433 F. 3d, at 263, 267–268
(holding that the Administrator’s attempt to apply the
“phantom account” to respondents violated two other
ERISA provisions: 29 U. S. C. §1054(h)’s notice require­
ment and §1054(g)’s prohibition on retroactive benefit
cutbacks). Rather, the court noted, respondents “likely
believed”—based on the language of the Plan—“that their
past distributions would only be factored into their [cur­
rent] benefits calculations by taking into account the
amounts they had actually received.” 433 F. 3d, at 267.
  In light of these conclusions, the Court of Appeals rec­
ognized the need to devise a remedy for the Administra­
tor’s abuse of discretion and ERISA violations—a remedy
that took into account the previous benefits distributions
respondents had received in a manner consistent with the
1989 Plan. The court therefore remanded the case to the
District Court, with the following instructions:
    “On remand, the remedy crafted by the district court
    for those employees [in the respondents’ situation]
    should utilize an appropriate [pre-1989 Plan] calcula­
    tion to determine their benefits. We recognize the dif­
    ficulty that this task poses . . . . As guidance for the
    district court, we suggest that it may wish to employ
    equitable principles when determining the appropri­
    ate calculation and fashioning the appropriate rem­
    edy.” Id., at 268.
  On remand, the District Court invited the parties to
submit remedial recommendations. Brief for Petitioners
14. The Plan Administrator proposed an approach that
would adjust respondents’ previous benefits distributions
by adding interest, and, as a fallback, the Administrator
suggested that the Plan should treat respondents as new
hires. Ante, at 3; Brief for United States as Amicus Curiae
                 Cite as: 559 U. S. ____ (2010)            7

                     BREYER, J., dissenting

6–7. The District Court rejected these suggestions and
concluded that the “appropriate” remedy was the one
suggested by the Second Circuit: no adjustment to the
prior distributions received by respondents.              472
F. Supp. 2d 452, 458 (WDNY 2007). The court stated that
this remedy was “straightforward; it adequately pre­
vent[ed] employees from receiving a windfall[;] and . . . it
most clearly reflect[ed] what a reasonable employee would
have anticipated based on the not-very-clear language in
the Plan.” Ibid. And the Court of Appeals, finding that
the District Court did not abuse its discretion in crafting a
remedy, affirmed. 535 F. 3d 111 (CA2 2008).
                             II
   The third mistake, I believe, is the Court’s. As the
majority recognizes, ante, at 4, “principles of trust law”
guide this Court in “determining the appropriate stan­
dard” by which to review the actions of an ERISA plan
administrator. Firestone Tire & Rubber Co. v. Bruch, 489
U. S. 101, 111–113 (1989); see also Metropolitan Life Ins.
Co. v. Glenn, 554 U. S. ___, ___ (2008) (slip op., at 4);
Aetna Health Inc. v. Davila, 542 U. S. 200, 218–219
(2004); Central States, Southeast & Southwest Areas Pen
sion Fund v. Central Transport, Inc., 472 U. S. 559, 570
(1985). And, as the majority also recognizes, ante, at 4,
where an ERISA plan grants an administrator the discre­
tionary authority to interpret plan terms, trust law re
quires a court to defer to the plan administrator’s inter­
pretation of plan terms. See, e.g., Glenn, supra, at ____
(slip op., at 4). But the majority further concludes that
trust law “does not resolve the specific issue before” the
Court in this case—i.e., whether a court is required to
defer to an administrator’s second attempt at interpreting
plan documents, even after the court has already deter­
mined that the administrator’s first attempt amounted to
an abuse of discretion. Ante, at 9. In my view, this final
8                 CONKRIGHT v. FROMMERT

                      BREYER, J., dissenting

conclusion is erroneous, as trust law imposes no such rigid
and inflexible requirement.
   The Second Circuit found the Administrator’s interpre­
tation of the Plan to be arbitrary and capricious and in
violation of ERISA, and it made clear that the District
Court’s task on remand was to “craf[t]” a “remedy.” See
433 F. 3d, at 268. Trust law treatise writers say that in
these circumstances a court may (but need not) exercise its
own discretion rather than defer to a trustee’s interpreta­
tion of trust language. See G. Bogert & G. Bogert, Law of
Trusts and Trustees §560, pp. 222–223 (2d rev. ed. 1980)
(hereinafter Bogert & Bogert) (after finding an abuse of
discretion, a court may “decid[e] for the trustee how he
should act,” possibly by “stating the exact result” the court
“desires to achieve”); see also 2 Restatement (Third) of
Trusts §50, p. 258 (2001) (hereinafter Third Restatement)
(“A discretionary power conferred upon the trustee . . . is
subject to judicial control only to prevent misinterpreta­
tion or abuse of the discretion by the trustee”); 1 Restate­
ment (Second) of Trusts §187, p. 402 (1957) (hereinafter
Second Restatement) (“Where discretion is conferred upon
the trustee . . . , its exercise is not subject to control by the
court, except to prevent an abuse by the trustee of his
discretion”); see also Firestone, supra, at 111. Judges
deciding trust law cases have said the same. See, e.g.,
Colton v. Colton, 127 U. S. 300, 322 (1888) (stating that it
was the “duty of the court” to determine the trust pay­
ments due after rejecting the trustee’s interpretation);
State v. Rubion, 158 Tex. 43, 55, 308 S. W. 2d 4, 11 (1957)
(“Considering that we have held that there has already
been an abuse of discretion by the trustee . . . , we have
concluded that a remand of the case to the trial court for
the definite establishment of amounts to be paid will
better promote a speedy administration of justice and a
final termination of this litigation”); Glenn, supra, at ____
(SCALIA, J., dissenting) (slip op., at 5) (court may exercise
                  Cite as: 559 U. S. ____ (2010)              9

                      BREYER, J., dissenting

discretion under trust law when a “trustee had discretion
but abused it”). In short, the controlling trust law princi­
ple appears to be that, “[w]here the court finds that there
has been an abuse of a discretionary power, the decree to
be rendered is in its discretion.” Bogert & Bogert §560, at
222.
   Of course, the fact that trust law grants courts discre­
tion does not mean that they will exercise that discretion
in all instances. The majority refers to the 2007 edition of
Scott on Trusts, ante, at 6, which says that, if there is “no
reason” to doubt that a trustee “will . . . fairly exercise” his
“discretion,” then courts “ordinarily will not fix the
amount” of a payment “but will instead direct the trustee
to make reasonable provision for the beneficiary’s sup­
port,” 3 A. Scott, W. Fratcher, & M. Ascher, Scott and
Ascher on Trusts §18.2.1, pp. 1348–1349 (5th ed. 2007)
(emphasis added). As this passage demonstrates, there
are situations in which a court will typically defer to a
trustee’s remedial suggestion.      The word “ordinarily”
confirms, however, that the Scott treatise writers recog­
nize that there are instances in which courts will not
defer. And other treatises indicate that black letter trust
law gives the district courts authority to decide which
instances are which. See Bogert & Bogert §560, at 222–
223 (when there is an abuse of discretion, a court “may set
aside the transaction,” “award damages to the benefici­
ary,” or “order a new decision to be made in the light of
rules expounded by the court”); 2 Third Restatement §50,
and Comment b, at 261 (discussing similar remedial op­
tions); 1 Second Restatement §187, and Comment b, at
402 (same); see also 3 Third Restatement §87, and Com­
ment c, at 244–245 (noting that “judicial intervention on
the ground of abuse” is allowed when a “good-faith,” yet
“unreasonable,” decision is made by a trustee); Rubion,
supra, at 54–55, 308 S. W. 2d, at 11 (discussing a court’s
remedial options).
10               CONKRIGHT v. FROMMERT

                     BREYER, J., dissenting

  Nevertheless, the majority reads the Scott treatise as
establishing an absolute requirement that courts defer to
a trustee’s fallback position absent “reason to believe that
[the trustee] will not exercise [his] discretion fairly—for
example, upon a showing that the trustee has already
acted in bad faith.” Ante, at 6. And based on this reading,
the majority further concludes that the existence of the
Scott treatise creates uncertainty as to whether, under
basic trust law principles, a court has the power to craft a
remedy for a trustee’s abuse of discretion. Ante, at 6–9.
  It is unclear to me, however, why the majority reads the
passage from Scott as creating a war among treatise writ­
ers, compare ante, at 6 (discussing Scott) with ante, at 8
(discussing Bogert), when the relevant passages can so
easily be read as consistent with one another. I simply
read the Scott treatise language as identifying circum­
stances in which courts typically choose to defer to an
administrator’s fallback position. The treatise does not
suggest that the law forbids a court from acting on its own
in the exercise of its broad remedial authority—authority
that trust law plainly grants to supervising courts. See
supra, at 8–9.
  A closer look at the Scott treatise confirms this under­
standing. The treatise cites seven cases in support of the
passage upon which the majority relies. See 3 Scott
§18.2.1, at 1349, n. 4. Three of these cases explicitly state
that a court may exercise its discretion to craft a remedy if
a trustee has previously abused its discretion. See Old
Colony Trust Co. v. Rodd, 356 Mass. 584, 589, 254 N. E.
2d 886, 889 (1970) (“A court of equity may control a trus­
tee in the exercise of a fiduciary discretion if it fails to
observe standards of judgment apparent from the applica­
ble instrument”); In re Marre’s Estate, 18 Cal. 2d 184, 190,
114 P. 2d 586, 590–591 (1941) (“It is well settled that the
courts will not attempt to exercise discretion which has
been confided to a trustee unless it is clear that the trustee
                  Cite as: 559 U. S. ____ (2010)           11

                     BREYER, J., dissenting

has abused his discretion in some manner” (emphasis
added)); In re Ferrall’s Estate, 92 Cal. App. 2d 712, 716–
717, 207 P. 2d 1077, 1079–1080 (1949) (following In re
Marre’s Estate). Three other cases are inapposite because
their circumstances do not involve any allegation of abuse
of discretion by the trustee. See In re Ziegler’s Trusts, 157
So. 2d 549, 550 (Fla. Dist. Ct. App. 1963) (per curiam)
(“There is no contention here that the court . . . would not
retain its rights, upon appropriate petition or other plead­
ings by an interested party, to review an alleged abuse, if
any, of the discretion exercised by the trustees”); In re
Grubel’s Will, 37 Misc. 2d 910, 911, 235 N. Y. S. 2d 21, 23
(Surr. Ct. 1962) (stating that “in the first instance” it is
the “proper function of the trustees” to set an amount to be
paid (emphasis added)); Orr v. Moses, 94 N. H. 309, 312,
52 A. 2d 128, 130 (1947) (declining to construe will be­
cause none “of the parties now assert claims adverse to
any position taken by the trustee”). In the final case, the
court decided that, on the facts before it, it did not need to
control the trustees’ discretion. See Estate of Stillman,
107 Misc. 2d 102, 111, 433 N. Y. S. 2d 701 (Surr. Ct. 1980)
(“The fine record of the trustees in enhancing the equity of
these trusts while earning substantial income, also per­
suades the court of the wisdom of retaining their services
as fiduciaries”). Which of these cases says that, after the
trustee has abused its discretion, a district court must still
defer to the trustee? None of them do. I repeat: Not a
single case cited by the Scott treatise writers supports the
majority’s reading of the treatise.
   The majority seeks to justify its reading of the Scott
treatise by referring to four cases that Scott does not cite.
See ante, at 7, n. 1. I am not surprised that the treatise
does not refer to these cases. In the first three, a court
thought it best, when a trustee had not yet exercised
judgment about a particular matter, to direct the trustee
to do so. See In re Sullivan’s Will, 144 Neb. 36, 40–41, 12
12                CONKRIGHT v. FROMMERT

                     BREYER, J., dissenting

N. W. 2d 148, 150–151 (1943) (finding that the trustees’
“failure to act” was erroneous, and directing the trustees
to exercise their discretion in setting a payment amount);
Eaton v. Eaton, 82 N. H. 216, 218, 132 A. 10, 11 (1926)
(same); Finch v. Wachovia Bank & Trust Co., 156 N. C.
App. 343, 347–348, 577 S. E. 2d 306, 309–310 (2003) (hold­
ing trustee erred by “[f]ail[ing] to exercise judgment,” and
directing it to do so). The fourth case concerns circum­
stances so distant from those before us that it is difficult to
know what to say. (The question was whether the benefi­
ciary of a small trust had title in certain trust assets or
whether the trustee had discretionary power to allocate
them in her best interest; the court held the latter, adding
that, if the trustee acted unreasonably, the lower court in
that particular case should seek to have the trustee re­
moved rather than trying to administer the trust funds
itself.) See Hanford v. Clancy, 87 N. H. 458, 460–461, 183
A. 271, 272–273 (1936).
   I cannot read these four cases, or any other case to
which the majority refers, as holding that a court, as a
general matter, is required to defer to a trust administra­
tor’s second attempt at exercising discretion. And I am
aware of no such case. In contrast, the Restatement and
Bogert and Scott treatises identify numerous cases in
which courts have remedied a trustee’s abuse of discretion
by ordering the trustee to pay a specific amount. See 2
Third Restatement §50, Reporter’s Note, at 283 (citing
cases such as Coker v. Coker, 208 Ala. 354, 94 So. 566
(1922)); Bogert & Bogert §560, at 223, n. 19 (citing cases
such as Rubion); 3 Scott §18.2.1, at 1348–1349, nn. 3–4
(citing cases such as Emmert v. Old Nat. Bank of Martins
burg, 162 W. Va. 48, 246 S. E. 2d 236 (1978)); see also
Brief for United States as Amicus Curiae 18 (listing cases).
I thus do not find trust law “unclear” on this matter. Ante,
at 6. When a trustee abuses its discretion, trust law
grants courts the authority either to defer anew to the
                 Cite as: 559 U. S. ____ (2010)          13

                    BREYER, J., dissenting

trustee’s discretion or to craft a remedy. See, e.g., 3 A.
Scott & W. Fratcher, Scott on Trusts §187, pp. 14–15 (4th
ed. 1988) (“This ordinarily means that so long as [the
trustee] acts not only in good faith and from proper mo­
tives, but also within the bounds of reasonable judgment,
the court will not interfere; but the court will inter-
fere when he acts outside the bounds of a reasonable
judgment”).
   Nor does anything in the present case suggest that the
District Court abused its remedial authority. The Second
Circuit stated that the interpretive problem on remand
was in essence a remedial problem. See 433 F. 3d, at 268.
It added that the remedial problem was “difficul[t]” and
that “the district court . . . may wish to employ equitable
principles when determining the appropriate calculation
and fashioning the appropriate remedy.” Ibid. The Ad­
ministrator had previously abused his discretionary
power. Id., at 265–268. And the District Court found that
the Administrator’s primary remedial suggestion on re­
mand—adjusting respondents’ previous benefits distribu­
tions by adding interest—probably would have violated
ERISA’s notice provisions. 472 F. Supp. 2d, at 457. Under
these circumstances, the District Court reasonably could
have found a need to use its own remedial judgment,
rather than rely on the Administrator’s—which is just
what the Second Circuit said. 535 F. 3d, at 119.
   Moreover, even if the “narrow” trust law “question
before us” were difficult, ante, at 6—which it is not—this
difficulty would not excuse the Court from trying to do its
best to work out a legal solution that nonetheless respects
basic principles of trust law. “Congress invoked the com­
mon law of trusts” in enacting ERISA, and this Court has
thus repeatedly looked to trust law in order to determine
“the particular duties and powers” of ERISA plan adminis­
trators. Central States, Southeast & Southwest Areas
Pension Fund v. Central Transport, Inc., 472 U. S. 559,
14               CONKRIGHT v. FROMMERT

                     BREYER, J., dissenting

570–572 (1985); see also, e.g., Glenn, 554 U. S., at ___ (slip
op., at 4); Davila, 542 U. S., at 218–219; Firestone, 489
U. S., at 111–113. While, as the majority recognizes, ante,
at 8, trust law may “not tell the entire story,” Varity Corp.
v. Howe, 516 U. S. 489, 497 (1996), I am aware of no other
case in which this Court has simply ignored trust law (on
the basis that it was unclear) and crafted a legal rule
based on nothing but “the guiding principles we have
identified underlying ERISA,” ante, at 9. See Varity,
supra, at 497 (“In some instances, trust law will offer only
a starting point, after which courts must go on to ask
whether, or to what extent, the language of the statute, its
structure, or its purposes require departing from common­
law trust requirements” (emphasis added)).
   In any event, it is far from clear that the Court’s legal
rule reflects an appropriate analysis of ERISA-based
policy. To the contrary, the majority’s absolute “one free
honest mistake” rule is impractical, for it requires courts
to determine what is “honest,” encourages appeals on the
point, and threatens to delay further proceedings that
already take too long. (Respondents initially filed this
retirement benefits case in 1999.) See Glenn, supra, at ___
(slip op., at 10). It also ignores what we previously have
pointed out—namely, that abuses of discretion “arise in
too many contexts” and “concern too many circumstances”
for this Court “to come up with a one-size-fits-all proce­
dural [approach] that is likely to promote fair and accu­
rate” benefits determinations. Ibid. And, finally, the
majority’s approach creates incentives for administrators
to take “one free shot” at employer-favorable plan inter­
pretations and to draft ambiguous retirement plans in the
first instance with the expectation that they will have
repeated opportunities to interpret (and possibly reinter­
pret) the ambiguous terms. I thus fail to see how the
majority’s “one free honest mistake” approach furthers
ERISA’s core purpose of “promot[ing] the interests of
                 Cite as: 559 U. S. ____ (2010)          15

                    BREYER, J., dissenting

employees and their beneficiaries in employee benefit
plans.” Shaw v. Delta Air Lines, Inc., 463 U. S. 85, 90
(1983); see also, e.g., 29 U. S. C. §1001(b) (noting that
ERISA was enacted “to protect . . . employee benefit plans
and their beneficiaries”); Curtiss-Wright Corp. v. Schoone
jongen, 514 U. S. 73, 83 (1995) (discussing ERISA’s central
“goa[l]” of “enab[ing] plan beneficiaries to learn their
rights and obligations at any time”); Massachusetts Mut.
Life Ins. Co. v. Russell, 473 U. S. 134, 148 (1985) (ERISA
was enacted “to protect contractually defined benefits”).
   The majority does identify ERISA-related factors—e.g.,
promoting predictability and uniformity, encouraging
employers to adopt strong plans—that it believes favor
giving more power to plan administrators. See ante, at 9–
13. But, in my view, these factors are, at the least, offset
by the factors discussed above—e.g., discouraging admin­
istrators from writing opaque plans and interpreting them
aggressively—that argue to the contrary. At best, the
policies at issue—some arguing in one direction, some the
other—are far less able than trust law to provide a “guid­
ing principle.” Thus, I conclude that here, as elsewhere,
trust law ultimately provides the best way for courts to
approach the administration and interpretation of ERISA.
See, e.g., Firestone, supra, at 111–113. And trust law
here, as I have said, leaves to the supervising court the
decision as to how much weight to give to a plan adminis­
trator’s remedial opinion.
                            III
  Since the District Court was not required to defer to the
Administrator’s fallback position, I should consider the
second question presented, namely, whether the Court of
Appeals properly reviewed the District Court’s decision
under an “abuse of discretion” standard. Ante, at 4 (ac­
knowledging, but not reaching, this issue). The answer to
this question depends upon how one characterizes the
16               CONKRIGHT v. FROMMERT

                     BREYER, J., dissenting

Court of Appeals’ decision. If the court deferred to the
District Court’s interpretation of Plan terms, then the
Court of Appeals most likely should have reviewed the
decision de novo. See Firestone, supra, at 112; cf. Davila,
supra, at 210 (“Any dispute over the precise terms of the
plan is resolved by a court under a de novo review stan­
dard”). If instead the Court of Appeals deferred to the
District Court’s creation of a remedy, in significant part on
the basis of “equitable principles,” then it properly re­
viewed the District Court decision for “abuse of discre­
tion.” See, e.g., Cook v. Liberty Life Assurance Co., 320
F. 3d 11, 24 (CA1 2003); Zervos v. Verizon N. Y., Inc., 277
F. 3d 635, 648 (CA2 2002); Grosz-Salomon v. Paul Revere
Life Ins. Co., 237 F. 3d 1154, 1163 (CA9 2001); Halpin v.
W. W. Grainger, Inc., 962 F. 2d 685, 697 (CA7 1992).
   The District Court opinion contains language that sup­
ports either characterization. On the one hand, the court
wrote that its task was to “interpret the Plan as written.”
472 F. Supp. 2d, at 457. On the other hand, the court said
that “virtually nothing is set forth in either the Plan or the
[Summary Plan Description]” about how to treat prior
distributions; and, in describing its task, it said that the
Court of Appeals had directed it to use “equitable princi­
ples” in fashioning a remedy. Ibid. Ultimately, the Dis­
trict Court appears to have used both the Plan language
and equitable principles to arrive at its conclusion. See
id., at 457–459.
   The Court of Appeals, too, used language that supports
both characterizations. Compare 535 F. 3d, at 117 (noting
that the District Court “applied [Plan] terms” in crafting
its remedy), with id., at 117–119 (describing the District
Court’s decision as the “craft[ing]” of a “remedy” and
acknowledging that it had directed the District Court to
use “equitable principles” in doing so). But the Court of
Appeals ultimately treated the District Court’s opinion as
if it primarily created a fair remedy. Ibid. Given the prior
                  Cite as: 559 U. S. ____ (2010)            17

                     BREYER, J., dissenting

Court of Appeals opinion’s language, supra, at 6 (quoting
433 F. 3d, at 268), I believe that view is a fair, indeed a
correct, view. And I consequently believe the Court of
Appeals properly reviewed the result for an “abuse of
discretion.”
   Petitioners argue that, because respondents were seek­
ing relief under 29 U. S. C. §1132(a)(1)(B), the Court of
Appeals was, in effect, prohibited from treating the rem­
edy as anything other than an application of a plan’s
terms. Brief for Petitioners 55–56; Reply Brief for Peti­
tioners 3, and n. 8, 16–17. While this provision allows
plaintiffs only to “enforce” or “clarify” rights or to “recover
benefits” “under the terms of the plan,” §1132(a)(1)(B)
(emphasis added), it does not so limit a court’s remedial
authority, Great-West Life & Annuity Ins. Co. v. Knudson,
534 U. S. 204, 221 (2002) (In §1132(a)(1)(B), “Congress
authorized ‘a participant or beneficiary’ to bring a civil
action . . . without referenc[ing] whether the relief sought
is legal or equitable”). The provision thus does not pro­
hibit a court from shaping relief through the application of
equitable principles, as trust law plainly permits. See,
e.g., 2 Third Restatement §50, and Comment b, at 261
(discussing remedial options); Bogert & Bogert §870, at
123–126 (2d rev. ed. 1995). Indeed, a court that finds, for
example, that an administrator provided employees with
inadequate notice of a plan’s terms (as was true here) may
have no alternative but to rely significantly upon those
principles. Cf. 29 U. S. C. §1104(a)(1)(D) (plan fiduciary
must “discharge his dut[y] . . . in accordance with the
documents and instruments governing the plan insofar as
such documents and instruments are consistent” with
ERISA).
   For these reasons I would affirm the decision of the
Court of Appeals. And I therefore respectfully dissent
from the majority’s contrary determination.
18               CONKRIGHT v. FROMMERT

              AppendixREYER, J., dissenting
                    B to the opinion of BREYER, J.

                        APPENDIX

                  The “Phantom Account” 

   This Appendix provides a simplified and illustrative
example of, as I understand it, how the “phantom account”
works. For the purposes of this Appendix, I make the
following assumptions: John worked at Xerox for 10 years
from 1970 to 1980. At the time of his departure from
Xerox, he was issued a lump-sum benefits distribution of
$140,000. He was then rehired in January 1989, and he
worked for Xerox for 5 more years before retiring (until
December 1993), earning $50,000 each year of his second
term of employment. I also assume that (1) Xerox’s con­
tribution to John’s investment account was $2,500 in 1989
(the last year such accounts were offered), (2) Xerox’s
contributions to John’s cash and investment accounts are
always made on the final day of the year, (3) the rate of
return in John’s cash and investment accounts is always 5
percent, and (4) annuity rates are also always 5 percent.
(For the sake of simplicity, I treat all annuities as perpe­
tuities, meaning that I calculate the present value of the
annuities thusly: Present Value = Annual Pay­
ment/Annuity Rate.)
   Given the above assumptions, John’s pension upon his
retirement would be $10,500 per year ($50,000 × 1.4 per­
cent × 15 years), which has a present value of $210,000
($10,500/5 percent). John’s cash and investment accounts
at the end of his fifth year would look as follows (While
Xerox’s ERISA Plan did not include cash accounts until
1990, each employee’s opening cash account balance was
credited with the balance of his investment account at the
end of 1989. The figures for John’s cash account in 1989
thus reflect the performance of his investment account. In
addition, all numbers are rounded to the nearest hun­
dred):
                        Cite as: 559 U. S. ____ (2010)                           19

                   AppendixREYER, J., dissenting
                         B to the opinion of BREYER, J.

Year      (A)      (B)      (C)     (D)      (E)        (F)        (G)         (H)
         Inv.     Inv.     Inv.     Inv.    Cash       Cash       Cash        Cash
       Account: Account: Account: Account: Account:   Account:   Account:   Account:
        Xerox Accrued Phantom      Total    Xerox     Accrued    Phantom      Total
       Contri­   Since   Account (Columns Contribu­    Since     Account    (Columns
       butions Return              B+C)     tions     Return                  F+G)
1989    2,500   2,500    217,200   219,700   2,500     2,500     217,200    219,700
1990     0      2,600    228,000   230,700   2,500     5,100     228,000    233,200
1991     0      2,800    239,400   242,200   2,500     7,900     239,400    247,300
1992     0      2,900    251,400   254,300   2,500    10,800     251,400    262,200
1993     0      3,000    264,000   267,000   2,500    13,800     264,000    277,800


   Now, as far as I understand it, John’s retirement bene­
fits are calculated as follows, see 433 F. 3d, at 260:
   First, the Plan Administrator would choose which of
John’s three accounts would yield him the greatest bene­
fits. In making this comparison, the Plan Administrator
would assume that John had never left Xerox when calcu­
lating John’s pension. The Plan Administrator would also
assume, when calculating the value of John’s cash and
investment accounts, that the lump-sum distribution John
had received from Xerox had remained invested in his
accounts. (In other words, the Plan Administrator would
include the “phantom account” in his calculations. The
total value of this phantom account in 1989, when John
rejoined Xerox, is equal to John’s lump-sum distribution of
$140,000 × 1.059, or approximately $217,200.)
   The Plan Administrator would thus compare John’s
pension, column D, and column H to determine John’s
benefit. As you can see above, column H provides the
greatest benefit, so John’s cash account would be used to
calculate the benefits he would receive upon retirement.
   Second, the Plan Administrator would “offset” John’s
prior distribution against his current benefits to deter­
mine the amount of benefits John would actually receive.
Thus, the Plan Administrator would take the “total” value
of John’s cash account, including the “phantom account”
($277,800), and subtract out the value of the “phantom
20              CONKRIGHT v. FROMMERT

             AppendixREYER, J., dissenting
                   B to the opinion of BREYER, J.

account” ($264,000). The total present value of the bene­
fits John would receive upon his second retirement would
thus be $13,800.
   This means that John would receive approximately $690
annually ($13,800 × 5 percent) upon retirement under the
Plan Administrator’s “phantom account” approach. In
comparison, if John had simply been treated as a new
employee when he was rehired, his pension would have
entitled him to at least $3,500 annually ($50,000 × 1.4
percent × 5 years) upon his retirement. And the impact of
the “phantom account” may have been even more dramatic
with respect to some of the respondents in this case. See
Brief for Respondents 24 (describing how respondent Paul
Frommert erroneously received a report claiming that his
retirement benefits were $2,482.00 per month, before later
discovering that, because of the “phantom account,” his
actual monthly pension was $5.31 per month); see also
App. 63a.
