Seventh Circuit Notes Split re Permissibility of "Official" Plan Administrator and "De Facto" Administrator in ERISA Context

Per Rud v. Liberty Life Assur. Co. of Boston, --- F.3d ----, 2006 WL 399149 (7th Cir. Feb. 22, 2006):

It may seem odd that Liberty Life should be administering the plan, when Andersen is the plan administrator. The oddness is dissipated by recognizing that administration is divided. Andersen decides who is eligible to participate in the plan and explains the plan to its employees, but the determination of eligibility to receive benefits under the plan is confided to Liberty Life. This division gives the insurance company discretionary authority over claim applications, making it an ERISA fiduciary.

We are mindful of the circuit split over the question whether there can be, alongside the official plan administrator, a "de facto" administrator. Hall v. Lhaco, Inc., 140 F.3d 1190, 1195 (8th Cir.1998). The courts that say "no" are worried about the confusion that can result if decisions are being made by someone (usually the employer) who is not designated as the plan administrator. Our court, while aware of the potential for confusion, see Riordan v. Commonwealth Edison Co., 128 F.3d 549, 551 (7th Cir.1997), has suggested that equitable estoppel might sometimes justify treating someone else as the plan administrator. "We can imagine a case in which the plan sponsor would be estopped to deny that it was the administrator; the district judge may have thought this such a case. If UOP's legal department had told Jones's lawyer to forget about the Committee and direct all his document requests to the legal department, and if in reliance on this advice the lawyer had forgone an opportunity to obtain the documents from the plan administrator and Jones had suffered a harm as a result, the elements of equitable estoppel would be present." Jones v. UOP, 16 F.3d 141, 144 (7th Cir.1994). But maybe it's wrong to get hung up on who is (are) the plan administrator(s). Maybe the right question to ask is whether the particular defendant made a discretionary determination concerning the plaintiff's entitlement to plan benefits.