The opinion
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[PUBLISH]
In the
United States Court of Appeals
For the Eleventh Circuit
____________________
No. 22-12366
____________________
ERIC ROMANO,
TODD ROMANO,
Plaintiffs-Appellants
Cross Appellee,
versus
JOHN HANCOCK LIFE INSURANCE COMPANY (USA),
Defendant-Appellee
Cross Appellant.
____________________
Appeals from the United States District Court
for the Southern District of Florida
D.C. Docket No. 1:19-cv-21147-JG
____________________
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2 Opinion of the Court 22-12366
Before JORDAN, BRASHER, and ABUDU, Circuit Judges.
JORDAN, Circuit Judge:
“The aim of ERISA is ‘to make the plaintiffs whole, but not
to give them a windfall.’” Henry v. Champlain Enters., Inc., 445 F.3d
610, 624 (2d Cir. 2006) (Sotomayor, J.) (quoting Jones v. Unum Life
Ins. Co. of Am., 223 F.3d 130, 139 (2d Cir. 2000)). The question in
this case is whether, under the fiduciary duty provision of the Em-
ployee Retirement Income Security Act of 1974 (“ERISA”), 29
U.S.C. § 1109(a), the value of certain foreign tax credits received by
John Hancock should have been passed through to a class of de-
fined-contribution plans. Eric and Todd Romano, as class repre-
sentatives and the trustees of the Romano Law, PL 401(k) Plan,
contend that they should have been, and because they were not,
John Hancock breached its fiduciary duties under ERISA.
Following a review of the record and with the benefit of oral
argument, we affirm the district court’s order granting summary
judgment in favor of John Hancock. As we explain, John Hancock
was not an ERISA fiduciary with regard to the matter at issue and
the Romanos (and the other plans) are therefore not entitled to the
value of the foreign tax credits. To rule otherwise would provide
them a windfall.
I
We take the following facts in the light most favorable to the
Romanos and draw reasonable inferences in their favor. See Brady
v. Carnival Corp., 33 F.4th 1278, 1281 (11th Cir. 2022).
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22-12366 Opinion of the Court 3
A
John Hancock is an insurance company. Among other
things, it provides investment and recordkeeping services to 401(k)
retirement plans. One such retirement plan is the Romano Law,
PL 401(k) Plan (the “Romano Law Plan”), for which Eric and Todd
Romano act as trustees. The Romanos established the Romano
Law Plan for themselves and the employees of their jointly-owned
law firm, Romano Law, PL. To do so, they engaged a financial
advisor, Christian Searcy, Jr., to recommend service providers and
investments. On the advice of Mr. Searcy, Jr., the Romanos con-
tracted with John Hancock and entered into a “Signature” platform
group variable annuity contract, which made a menu of invest-
ment options available for the Romano Law Plan and its partici-
pants. The Romanos also executed a recordkeeping agreement, un-
der which John Hancock agreed to provide administrative and
recordkeeping services.
The Signature platform is at issue here. As it did with the
Romano Law Plan, John Hancock enters into two standardized
form contracts—a group annuity contract and a recordkeeping
agreement—with each retirement plan that signs up for the Signa-
ture platform. The investment options made available under the
Signature platform include certain mutual funds. John Hancock
first selects a group of mutual funds for the platform and then each
retirement plan chooses a subset of those funds for investment by
the plan and its participants. From that subset of mutual funds
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4 Opinion of the Court 22-12366
chosen by a plan, the individual participants are then able to deter-
mine which specific funds they wish to invest in.
Neither the Romano Law Plan nor its participants, however,
invested directly in the mutual funds. Rather, the group annuity
contract allowed the Romano Law Plan to make contributions into
John Hancock “separate accounts,” which are accounts “segre-
gated from the general funds of [John Hancock].” This meant that
“[a]ny income, gains, or losses . . . from assets in a Separate Account
w[ould] be credited or charged against said account with regard to
the other income, gains, or losses of [John Hancock].” The sepa-
rate accounts were divided into sub-accounts that corresponded to
the mutual funds and other investment options available under the
contracts that John Hancock maintained with the respective retire-
ment plans.
The Romano Law Plan’s assets were allocated among those
sub-accounts, which were established, administered, owned, and
managed by John Hancock. John Hancock was also the legal and
taxable owner of the assets in the separate accounts. But the sepa-
rate accounts were not chargeable with any of John Hancock’s lia-
bilities outside of the group annuity contracts and the recordkeep-
ing agreements (hence the “separate” label).
Because the sub-account transactions were processed only
at the direction of the Romano Law Plan and its participants, the
group annuity contract explained that, by availing the Plan and its
participants of its platform of investments and by providing record-
keeping services, John Hancock did “not assume any fiduciary
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22-12366 Opinion of the Court 5
responsibility of the Contractholder, Plan Administrator, Plan
Sponsor or any other Fiduciary of the Plan.” Group Annuity Con-
tract, D.E. 1-1 at 13–14. The recordkeeping agreement similarly
explained that John Hancock would not have any discretionary au-
thority or responsibility for the management or control of the sep-
arate accounts’ assets; instead, its authority was limited to holding
the assets in the separate accounts and allocating them as instructed
by the Romanos and their participants. See D.E. 110-11.
John Hancock’s fees for administrative and recordkeeping
services included an “Annual Maintenance Charge” of 0.60% of the
assets in each sub-account. The group annuity contract at issue
here contained the following provision concerning John Hancock’s
use of credits, fees, or revenue sharing to reduce the Annual
Maintenance Charge for its services:
The revenue sharing as well as the credits that the
Company receives in respect of an underlying invest-
ment vehicle affiliated with the Company are some-
times generically referred to as “revenue from under-
lying fund.” The amount of revenue received by the
Company from the underlying vehicle varies from
Fund to Fund. The Company uses all revenue re-
ceived from the underlying fund, trust or portfolio to
reduce the [Annual Maintenance Charge] for the
[s]ub-account such that the sum of such revenue from
the underlying mutual fund, trust or portfolio and the
[Annual Maintenance Charge] is equal to 0.60% of
your Contract assets invested in each [s]ub-account.
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Group Annuity Contract, D.E. 1-1 at 19. In short, John Hancock
agreed to use those revenue-sharing fees and credits as an offset to
“reduce the [Annual Maintenance Charge]” charged to the plans.
Id.
The Romanos received a “Supplemental Information
Guide” and a recordkeeping agreement, both of which disclosed
the total cost of investing in each sub-account after any reductions
were applied. They also received a “Fund Information Guide,”
which contained additional information about the sub-accounts
and their investments and fees. The Guide also explained that ad-
ditional information about each fund was “available upon request,”
including “complete details on investment objectives, risks, fees,
charges and expenses as well as other information about the under-
lying investment vehicle, which should be carefully considered.”
None of these documents disclosed that John Hancock re-
ceived and retained foreign tax credits from the mutual fund shares
owned in the separate accounts. These foreign tax credits—and
John Hancock’s undisclosed retention of them—constitute the
crux of this litigation. We therefore explain them in detail.
B
As discussed, the Romano Law Plan was presented with a
group of mutual funds by John Hancock pursuant to its group an-
nuity contract. On the advice of Mr. Searcy, Jr., the Romanos, as
trustees, chose options for the Romano Law Plan from over 200
sub-accounts. Some of the chosen sub-accounts owned shares in
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22-12366 Opinion of the Court 7
mutual funds that invested in foreign securities and were therefore
subject to foreign taxes.
These foreign taxes had U.S.-based tax implications. The In-
ternal Revenue Code taxes all income of U.S. taxpayers earned
worldwide. See 26 U.S.C. § 61(a). To avoid double taxation of in-
come earned abroad—by both the United States and the country
in which the income was earned—Congress established the foreign
tax credit regime under the Code. When a U.S. taxpayer pays in-
come tax to another country due to its business activities in that
country, the taxpayer can claim a dollar-for-dollar credit against its
tax liability in the United States for the foreign taxes already paid.
See 26 U.S.C. §§ 853(b)(2)(A), 901–909. See also Paul R. McDaniel et
al., Introduction to United States International Taxation ¶¶ 6.1–6.2
(6th ed. 2014) (“Generally speaking, it is to the taxpayer’s advantage
to elect the foreign tax credit rather than the deduction. The credit
produces a dollar-for-dollar offset against US tax liability; the bene-
fit of a deduction is limited to the amount of the foreign income
taxes multiplied by the taxpayer’s marginal US tax bracket (i.e.,
generally a maximum reduction for a corporation of 35 cents in US
tax for each dollar of foreign tax paid.”)); Robert J. Misey, Jr. & Mi-
chael S. Schadewald, Practical Guide to U.S. Taxation of Interna-
tional Transactions ¶¶ 4.01–4.03 (6th ed. 2007) (providing an over-
view of foreign tax credit regime and noting that “[t]axpayers have
the option of deducting foreign income taxes in lieu of taking a
credit”). This credit offsets the taxpayer’s United States tax liability
and reduces its overall tax bill. See McDaniel et al., International
Taxation at ¶ 6.2.
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The Code permits certain regulated investment companies,
such as mutual funds, to pass through tax credits to their sharehold-
ers. See 26 U.S.C. § 853. A number of mutual funds available on
John Hancock’s Signature platform elect to operate under this pro-
vision of the Code and do just that. Because John Hancock is the
legal and taxable owner of the shares of the mutual funds, it re-
ceives the passed-through foreign tax credits from such mutual
funds.
Recall, however, that the shares of the mutual funds are pur-
chased with assets from the pooled 401(k) retirement plans, includ-
ing the Romano Law Plan. According to the Romanos and the
class of similarly situated plans, John Hancock should therefore be
required to pass through the benefits of the foreign tax credits to
the plans, whose assets are reduced by the amount of the foreign
taxes paid with the assets of the sub-accounts. In their view, the
group annuity contract also requires that John Hancock offset the
cost of its recordkeeping services—the Annual Maintenance
Charge—by the value it receives from the foreign tax credits.
As John Hancock sees things, under the Code a mutual fund
paying foreign taxes may make an election requiring shareholders
that are U.S. taxpayers to include the amount paid in foreign taxes
as income on their federal income tax returns—known as a foreign
tax “gross up.” See 26 U.S.C. § 853(b)(2)(A). When that occurs, the
shareholders may also qualify for a choice between a correspond-
ing foreign tax credit or a deduction. See id. Here, because John
Hancock is the taxable owner of the mutual fund shares held in the
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22-12366 Opinion of the Court 9
separate accounts, it—and only it—is required to gross-up its taxa-
ble income to include the foreign taxes paid by a mutual fund that
makes this election. Thus, these tax obligations apply only to John
Hancock, and not to its ERISA-governed plan customers such as
the Romano Law Plan. 1
From 2013 through 2019, John Hancock received more than
$130 million in foreign tax credits from the various plans’ invest-
ments. John Hancock used these credits to reduce its overall U.S.
tax liability by tens of millions of dollars. The Romanos’ expert
calculated that the monetary value of the foreign tax credits to John
Hancock from 2013 through 2019 exceeded $90 million.
C
The Romanos, as the trustees of the Romano Law Plan, filed
a class action against John Hancock, asserting two claims. The first
was that John Hancock breached its fiduciary duties under ERISA.
The second was that John Hancock, as a fiduciary, violated ERISA’s
prohibited-transaction provisions. The district court certified a na-
tionwide class of trustees of defined-contribution plans that entered
into group annuity contracts and recordkeeping agreements with
John Hancock, and that selected mutual funds which paid foreign
taxes.
1 John Hancock also submits that even if the Romano Law Plan were the
owner of the mutual fund shares, it does not pay federal income taxes because
of its tax-exempt status. The Romano Law Plan therefore would still not be
eligible for a corresponding foreign tax credit or deduction and could not offset
the foreign tax payments made.
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10 Opinion of the Court 22-12366
Two orders are at issue in this appeal. The Romanos appeal
the district court’s order granting summary judgment in favor of
John Hancock on their ERISA claims. John Hancock cross-appeals
the district court’s order denying its motion to strike the Romanos’
jury demand on behalf of the class. Because we affirm the sum-
mary judgment order, we do not reach John Hancock’s cross-ap-
peal.
II
The district court’s order granting summary judgment is
subject to plenary review. See Benning v. Comm’r, Ga. Dep’t of Corr.,
71 F.4th 1324, 1328 (11th Cir. 2023). The same standard applies to
the district court’s Article III standing determination. See Wilding
v. DNC Servs., Corp., 941 F.3d 1116, 1124 (11th Cir. 2019).
In its summary judgment order, the district court concluded
that John Hancock was not an ERISA fiduciary for the conduct un-
derlying the Romanos’ claims, did not breach any ERISA fiduciary
duties, or engage in ERISA prohibited transactions. The district
court also ruled that the Romanos and the class failed to establish
loss causation and therefore lacked Article III standing. We disa-
gree with the district court on standing, but affirm its summary
judgment order on the merits.
III
Article III standing is a threshold jurisdictional matter, so we
begin there. See Wiand v. ATC Brokers Ltd., 96 F.4th 1303, 1311 (11th
Cir. 2024).
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The Constitution confines the federal judicial power to the
resolution of “Cases” and “Controversies.” U.S. Const. art. III, §§
1–2. “For there to be a case or controversy under Article III, the
plaintiff must have a ‘personal stake’ in the case—in other words,
standing.” TransUnion LLC v. Ramirez, 594 U.S. 413, 423 (2021) (in-
ternal quotation marks omitted). To establish this “personal
stake,” a plaintiff must show (i) that he or she suffered an injury in
fact that is concrete, particularized, and actual or imminent; (ii) that
the injury was likely caused by the defendant; and (iii) that the in-
jury could likely be redressed by judicial relief. See Lujan v. Defs. of
Wildlife, 504 U.S. 555, 560–61 (1992).
“[C]ertain harms readily qualify as concrete injuries under
Article III.” TransUnion, 594 U.S. at 425. Traditional tangible
harms, such as physical and monetary harms, are among “[t]he
most obvious.” Id. “Various intangible harms can also be con-
crete,” including “reputational harms, disclosure of private infor-
mation, and intrusion upon seclusion.” Id. But a plaintiff does not
automatically satisfy the injury-in-fact requirement whenever a
statute grants a person a statutory right. See Spokeo, Inc. v. Robins,
578 U.S. 330, 341 (2016).
A plaintiff must demonstrate standing “with the manner and
degree of evidence required at the successive stages of the litiga-
tion,” Lujan, 504 U.S. at 561, but the Supreme Court has cautioned
that federal courts “must not ‘confuse weakness on the merits with
absence of Article III standing.’” Ariz. St. Leg. v. Ariz. Indep. Redis-
tricting Comm’n, 576 U.S. 787, 800 (2015) (quoting Davis v. United
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12 Opinion of the Court 22-12366
States, 564 U.S. 229, 249 n.10 (2011)). Indeed, in assessing standing,
“the court must be careful not to decide the questions on the merits
for or against the plaintiff, and must therefore assume that on the
merits the plaintiffs would be successful in their claims.” Culver-
house v. Paulson & Co. Inc., 813 F.3d 991, 994 (11th Cir. 2016) (cita-
tion and internal quotation marks omitted). See also Moody v. Hol-
man, 887 F.3d 1281, 1285–86 (11th Cir. 2018) (explaining that stand-
ing and the lack of a cause of action are not interchangeable con-
cepts).
Here, the district court ruled—after a full decision on the
merits of the claims—that the Romanos (and therefore the class)
had not shown an injury attributable to John Hancock’s use of the
foreign tax credits. This was because the Romano Law Plan could
not use the foreign tax credits (as a tax-exempt plan) and because
the Plan’s “contractual entitlement was to assets valued using a
mutual fund’s [net asset value],” which was determined net of any
foreign taxes. See D.E. 339 at 81. Accordingly, the district court
ruled that the Romanos and the class “have no standing to seek any
monetary relief because they have not incurred a redressable in-
jury.” Id.
The Romanos satisfied the injury-in-fact, causation, and re-
dressability requirements of standing at the summary judgment
phase. They asserted (and provided some evidence to support their
theory) that both under ERISA and the respective plans’ contrac-
tual agreements with John Hancock—namely, the group annuity
contracts and recordkeeping agreements—they and the class
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22-12366 Opinion of the Court 13
members were entitled to the monetary value of the foreign tax
credits retained by John Hancock. And they asserted entitlement
to monetary damages under ERISA because John Hancock kept the
foreign tax credits—valued at over $90 million—for which the Ro-
manos, the class members, and their respective plans paid the un-
derlying foreign taxes. In other words, the Romanos and the class
paid for the benefit that was ultimately retained by John Hancock
in purported breach of its ERISA fiduciary duties. Furthermore,
pursuant to the group annuity contract, John Hancock agreed to
use certain revenue-sharing fees and credits as an offset to reduce
the Annual Maintenance Charge charged to the plans. See Group
Annuity Contract, D.E. 1-1 at 19. The Romanos and the class as-
serted that John Hancock was required to apply the foreign tax
credits to reduce the Annual Maintenance Charges to the respec-
tive plans and that the failure to do so should result in compensa-
tory damages (for fees paid) or injunctive disgorgement (for an un-
just benefit retained).
Whether these theories are legally sound or sufficient is an-
other matter. But we must assume, for purposes of our standing
analysis, that these theories are valid and will succeed. See Culver-
house, 813 F.3d at 994.
Both in its sequence of analysis and ultimate reasoning, the
district court conflated the merits of the ERISA claims and the
standing of the Romanos and the class to bring those claims. See,
e.g., Pedro v. Equifax, Inc., 868 F.3d 1275, 1279 (11th Cir. 2017) (ex-
plaining that Article III standing “must be addressed prior to and
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14 Opinion of the Court 22-12366
independent of the merits of a party’s claims”) (emphasis added). Cf.
Warth v. Seldin, 422 U.S. 490, 498 (1975) (noting that “the question
of standing is whether the litigant is entitled to have the court de-
cide the merits of the dispute or of particular issues”). The district
court’s decision—and John Hancock’s argument—would mean
that “a plaintiff who ultimately loses on the merits (and by defini-
tion did not have a substantive right to relief) would never have
had standing to pursue his or her claims in the first place. The law
does not countenance, much less demand, such a result.” Moody,
887 F.3d at 1287.
The Romanos and the class were not required to succeed on
their ERISA claims in order to have Article III standing. To rule
otherwise would allow a merits decision to swallow the antecedent
matter of standing.
IV
Having concluded that the Romanos and the class have Ar-
ticle III standing, we turn to the merits of the ERISA claims. 2
ERISA sets minimum standards for employee benefit plans,
such as the 401(k) contribution plans here. See generally 29 U.S.C. §§
1001, 1002. It also creates federal causes of action for recovery of
benefits under such plans. See 29 U.S.C. § 1132(a)(1)(B). For
2 When a district court rules alternatively that it lacks subject-matter jurisdic-
tion and that the plaintiffs’ claims fail on the merits, we may affirm on the
merits if we conclude that there was jurisdiction. See, e.g., M.H.D. v. Westmin-
ster Schools, 172 F.3d 797, 802 n.12 (11th Cir. 1999); Rutherford v. McDonough,
466 F.3d 970, 976 (11th Cir. 2006).
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22-12366 Opinion of the Court 15
example, it permits plan participants to bring actions against plan
fiduciaries for breach of their fiduciary duties and requires plan ad-
ministrators, upon request, to provide plan information to partici-
pants at the risk of statutory penalties for failure to do so. See 29
U.S.C. §§ 1104, 1109(a), 1132(c)(1).
ERISA specifically provides that:
Any person who is a fiduciary with respect to a plan
who breaches any of the responsibilities, obligations
or duties imposed upon fiduciaries by [ERISA] shall
be personally liable to make good to such plan any
losses to the plan resulting from each such breach,
and to restore to such plan any profits of such fiduci-
ary which have been made through the use of assets
of the plan by the fiduciary, and shall be subject to
such other equitable or remedial relief as the court
may deem appropriate, including removal of such fi-
duciary.
29 U.S.C. § 1109(a). “The responsibility attaching to fiduciary sta-
tus has been described as ‘the highest known to law.’” ITPE Pension
Fund v. Hall, 334 F.3d 1011, 1013 (11th Cir. 2003) (quoting Herman
v. Nationsbank Tr. Co. (Ga.), 126 F.3d 1354, 1361 (11th Cir. 1997)).
The Romanos assert two fiduciary duty claims against John
Hancock under the civil remedy provision of ERISA, 29 U.S.C. §
1132. Both claims present issues of first impression. As far as we
can tell, no courts have analyzed similar claims involving the reten-
tion of foreign tax credits.
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16 Opinion of the Court 22-12366
First, the Romanos claim that John Hancock breached its du-
ties under 29 U.S.C. § 1104(a)(1)(A), which requires a fiduciary to
discharge its “duties with respect to a plan solely in the interest of
the participants and beneficiaries and . . . for the exclusive purpose
of: (i) providing benefits to participants and their beneficiaries; and
(ii) deferring reasonable expenses of administering the plan.” Spe-
cifically, they assert that because John Hancock profited from the
foreign tax credits without passing through a commensurate bene-
fit to the underlying plans, it failed to act solely in the best interest
of the plans and failed to defray the reasonable expenses of admin-
istering those plans.
Second, the Romanos claim that John Hancock engaged in
prohibited transactions under 29 U.S.C. § 1106(b)(1), which forbids
a fiduciary from “deal[ing] with assets of the plan in his own inter-
est or his own account.” By retaining the full benefit of the foreign
tax credits generated by the plans’ investments, the Romanos claim
that John Hancock dealt with the assets of the plans for its own
interest or account.
A
In order to determine whether John Hancock is subject to
ERISA’s strict fiduciary obligations, see, e.g., 29 U.S.C. §
1104(a)(1)(A), we must first ask whether the company is an ERISA
fiduciary with respect to the Romano Law Plan and/or the foreign
tax credits. Under ERISA, a person or entity is deemed a fiduciary
either by being named as such in the plan document, or by per-
forming or possessing the authority to perform certain functions.
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See 29 U.S.C. §§ 1102(a), 1002(21)(A). The latter—called a “func-
tional fiduciary”—applies “to the extent (i) [the entity] exercises
any discretionary authority or discretionary control respecting
management of [the] plan or exercises any authority or control re-
specting management or disposition of its assets, (ii) [the entity]
renders investment advice for a fee or other compensation . . . or
(iii) [the entity] has any discretionary authority or discretionary re-
sponsibility in the administration of [the] plan.” § 1002(21)(A). In
other words, “ERISA . . . defines ‘fiduciary’ not in terms of formal
trusteeship, but in functional terms of control and authority over
the plan.” Mertens v. Hewitt Assocs., 508 U.S. 248, 262 (1993). See
also Gimeno v. NCHMD, Inc., 38 F.4th 910, 915 (11th Cir. 2022)
(“Proof of fiduciary status may come from . . . the factual circum-
stances surrounding the administration of the plan, even if these
factual circumstances contradict the designation in the plan docu-
ment.”) (internal quotation and citation omitted). But “fiduciary
status under ERISA is not an ‘all-or-nothing concept,’” so “court[s]
must ask whether a person is a fiduciary with respect to the partic-
ular activity at issue.” Cotton v. Mass. Mut. Life Ins. Co., 402 F.3d
1267, 1277 (11th Cir. 2005) (quoting Coleman v. Nationwide Ins. Co.,
969 F.2d 54, 61 (4th Cir. 1992)).
The Romanos maintain that John Hancock was a functional
fiduciary of the Romano Law Plan because it exercised authority
or control respecting the management or disposition of the foreign
tax credits, which they assert are plan assets, and because John Han-
cock exercised discretionary authority or responsibility in the ad-
ministration and management of the separate accounts containing
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18 Opinion of the Court 22-12366
the various mutual funds and investment vehicles. We address
each contention in turn.
1
“[D]ecisions about the content of a plan are not themselves
fiduciary acts.” Pegram v. Herdich, 530 U.S. 211, 226 (2000). Gener-
ally speaking, an entity’s own day-to-day corporate functions, such
as filing taxes, do not trigger fiduciary status. See Lanfear v. Home
Depot, Inc., 679 F.3d 1267, 1284 (11th Cir. 2012) (“When the defend-
ants in this case filed the form S-8s and created and distributed the
stock prospectuses, they were acting in their corporate capacity
and not in their capacity as ERISA fiduciaries[;] they were conduct-
ing business that was regulated by securities law and not by
ERISA[.]”).
Apparently understanding this reality, the Romanos focus
on the characterization of the foreign tax credits. There is no dis-
pute that John Hancock exercised discretionary authority over the
foreign tax credits. If those constituted plan assets under ERISA,
then John Hancock may be an ERISA fiduciary. We conclude,
however, that the credits were not plan assets.
ERISA “contains no comprehensive definition of plan as-
sets.” John Hancock Mut. Life Ins. Co. v. Harris Tr. & Sav. Bank, 510
U.S. 86, 89 (1993) (internal quotation marks omitted). Some plan
assets are defined by the regulations prescribed by the Secretary of
the Department of Labor. See 29 U.S.C. § 1002(42) (“[T]he term
‘plan assets’ means plan assets as defined by such regulations as the
Secretary may prescribe.”). But the Department of Labor has
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issued only two such regulations. See 29 C.F.R. § 2510.3-101 (plan
assets sometimes include the underlying assets of entities in which
a plan has invested); 29 C.F.R. § 2510.3-102 (plan assets include
“amounts” contributed to the plan by participants and beneficiar-
ies).
To the extent these two regulations do not cover a particular
dispute about whether something is a plan asset, the majority of
circuits look to “ordinary notions of property rights under non-
ERISA law.” U.S. Dep’t of Labor, Advisory Op. No. 93–14A, 1993
WL 188473, at *4 (May 5, 1993). See, e.g., Kalda v. Sioux Valley Phy-
sician Partners, Inc., 481 F.3d 639, 647 (8th Cir. 2007) (collecting De-
partment of Labor advisory opinions); Faber v. Metro. Life Ins. Co.,
648 F.3d 98, 105–06 (2d Cir. 2011) (noting that ERISA’s limited def-
inition is not helpful and finding the Department of Labor’s prop-
erty-rights approach persuasive); Merrimon v. Unum Life Ins. Co. of
Am., 758 F.3d 46, 56–57 (1st Cir. 2014) (using the Department of
Labor’s property-rights approach to determine whether certain
funds were plan assets); In re Luna, 406 F.3d 1192, 1199 (10th Cir.
2005) (using ordinary notions of property rights to determine that
the plan contributions were plan assets because the plan owned a
contractual right to them). Cf. ITPE Pension Fund, 334 F.3d at 1014
(analyzing the definition of “acquiring” property without choosing
or citing to a specific approach).3
3 The Ninth Circuit takes a different approach, asking “whether the item in
question may be used to the benefit (financial or otherwise) of the fiduciary at
the expense of the plan participants or beneficiaries.” Patelco Credit Union v.
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20 Opinion of the Court 22-12366
This definition of property rights includes “any property,
tangible or intangible, in which the plan has a beneficial ownership
interest.” U.S. Dep’t of Labor, Advisory Op. No. 93–14A, 1993 WL
188473, at *4 . Identification of plan assets therefore requires “con-
sideration of any contract or other legal instrument involving the
plan, as well as the actions and representations of the parties in-
volved.” Id. 4
Neither “ordinary notions of property rights” nor the par-
ties’ agreements suggest that the foreign tax credits sought, ob-
tained, and retained by John Hancock were plan assets under
ERISA. The Romanos simply did not have a “beneficial ownership
interest” in them.
In general, “ownership” is defined as the “bundle of rights
allowing one to use, manage, and enjoy property, including the
right to convey it to others.” Black’s Law Dictionary 1329 (12th ed.
2024). It “implies the right to possess a thing, regardless of any ac-
tual or constructive control.” Id. A “beneficial owner” is “[o]ne
recognized in equity as the owner of something because use and
title belong to that person, even though legal title may belong to
Sahni, 262 F.3d 897, 908 (9th Cir. 2001). Neither party proposes this approach,
so we do not address it.
4 We reject the Romanos’ contention that the Department of Labor’s prop-
erty-rights approach also generally includes “any retrospective rate credits” based
on the fact-specific decision in Advisory Opinion No. 93–14A. See Appellants’
Br. at 26 (emphasis in original). Those “retrospective rate credits” refer to the
specific premium stabilization reserve for the contract at issue in that case, not
to “credits” in general.
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22-12366 Opinion of the Court 21
someone else . . . [especially] one for whom property is held in
trust.” Id. See also id. at 966, 1330 (defining “beneficial interest” as
“[a] right or expectancy in something (such as a trust or an estate),
as opposed to legal title to that thing,” and “beneficial ownership”
as “[a] beneficiary’s interest in trust property”). 5
So, for example, “[p]lan assets manifestly include any prop-
erty held in trust on behalf of the plan.” U.S. Dep’t of Labor, Advi-
sory Op. No. 93–14A, 1993 WL 188473, at *4. The Romanos do
not contend that the Romano Law Plan has a pure ownership inter-
est in the foreign tax credits. As a tax-exempt plan, it is unable to
use, manage, or enjoy the credits, and would not be entitled to re-
ceive them otherwise. The Romanos concede as much. See Oral
Argument Audio Recording at 2:30–3:45. See also Hayden Adams,
Claiming Foreign Tax Credits, Charles Schwab (Aug. 12, 2024),
https://www.schwab.com/learn/story/claiming-foreign-taxes-
credit-or-deduction [https://perma.cc/X7TK-AHLC] (“Because
income in a tax-deferred account—such as an individual retirement
account (IRA) or 401(k)—isn’t subject to U.S. tax (at least not until
you begin making withdrawals), you can’t deduct foreign taxes
paid on investments held in the account.”). The tax credits were
inalienable and were “owned” by John Hancock as the legal and
taxable owner of the shares of the mutual funds in the separate ac-
counts. Nor were the foreign tax credits held in trust for the benefit
5 Other contemporary legal dictionaries contain similar definitions. See 2 Bou-
vier Law Dictionary, Desk Edition 1931–32 (2012); Merriam-Webster’s Dic-
tionary of Law 344 (2016).
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22 Opinion of the Court 22-12366
of the Romano Law Plan. They were simply tax benefits offered
by the Internal Revenue Code. That foreign tax credits were the
result of foreign taxes on certain funds did not make them assets of
a 401(k) plan offered and serviced by John Hancock. Cf. In re Fidelity
ERISA Float Litig., 829 F.3d 55, 62 (1st Cir. 2016) (Souter, J.) (reject-
ing the contention that float interest on sums generated by a par-
ticipant’s withdrawal from a mutual fund constituted a plan asset:
“Cash held by a mutual fund is not transmuted into a plan asset
when it is received by an intermediary whose obligation is to trans-
fer it directly to a participant. As between the plan and the partici-
pant, it is the participant who has the superior claim to property in
the cash after redemption. And that is a good reason to reject a
claim that the cash should be treated as a plan asset for the purpose
of enforcing fiduciary responsibilities under ERISA.”).
2
The Romanos therefore contend—as they must—that the
language in the group annuity contract and the recordkeeping
agreement granted the Romano Law Plan a “beneficial interest” in
John Hancock’s corporate tax credits. We disagree.
“As a general rule, the first step in identifying the property
of an ERISA plan is to consult the documents establishing and gov-
erning the plan.” Sec’y of Lab. v. Doyle, 675 F.3d 187, 204 (3d Cir.
2012). Cf. ITPE Pension Fund, 334 F.3d at 1013 (“The proper rule,
developed by caselaw, is that unpaid employer contributions are
not assets of a fund unless the agreement between the fund and the
employer specifically and clearly declares otherwise.”). The
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22-12366 Opinion of the Court 23
Romanos point to language in the group annuity contract stating
that “[t]he revenue sharing as well as the credits that [John Han-
cock] receives in respect of an underlying investment vehicle affili-
ated with [John Hancock] are sometimes generally referred to as
‘revenue from the underlying fund.’” Appellants’ Br. at 28 (citing
Group Annuity Contract, D.E. 1-1 at 19). The contract further pro-
vides that John Hancock “uses all revenue received from the un-
derlying mutual fund . . . to reduce the [Annual Maintenance
Charge] for the Sub-account . . . .” Group Annuity Contract, D.E.
1-1 at 19. According to the Romanos, the revenue used to reduce
the Annual Maintenance Charge expressly includes all “credits”
that John Hancock receives—including the foreign tax credits. But
this is not so.
Federal courts “have the authority to develop a body of fed-
eral common law to govern the interpretation and enforcement”
of plans in ERISA cases. See Alexandra H. v. Oxford Health Ins. Inc.
Freedom Access Plan, 833 F.3d 1299, 1306 (11th Cir. 2016) (citation
and internal quotation marks omitted). Under federal common
law, we “first look to the plain and ordinary meaning of the [plan]
terms to interpret the contract.” Id. at 1307. A “contract should be
interpreted to give meaning to all of its terms—presuming that
every provision was intended to accomplish some purpose, and
that none are deemed superfluous.” Harris v. The Epoch Grp., L.C.,
357 F.3d 822, 825 (8th Cir. 2004) (quoting Transitional Learning
Cmty. at Galveston, Inc. v. U.S. Off. of Pers. Mgmt., 220 F.3d 427, 431
(5th Cir. 2000)). When there is an ambiguity, it is construed
“against the drafter.” Alexandra H., 833 F.3d at 1307.
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24 Opinion of the Court 22-12366
The Romanos would have us read the term “credits” in the
group annuity contract as an open-ended general term encompass-
ing any kind of imaginable “credit,” but when understood in the
proper context, the group annuity contract’s revenue definition re-
fers to the provision directly above their relied-upon language. In
pertinent part, the contract explains that John Hancock receives
revenue from the following sources:
(1) an Annual Maintenance Charge (“AMC”);
(2) Sales and Service fee (“SSF”), if applicable;
(3) fees (referred to as “revenue sharing[,]” which
includes the asset based distribution charges
(“12b-1 fees”) or sub-transfer agency fees or
other fund fees described above) paid by the
underlying mutual fund, trust or other fund re-
lated source to us for recordkeeping and other
services provided to you by [John Hancock];
and
(4) in the case of an underlying mutual fund, trust,
or portfolio attributed with [John Hancock],
credits received by [John Hancock] that are attribut-
able to the investment management fees paid to af-
filiates of [John Hancock] by such underlying invest-
ment vehicle.
Group Annuity Contract, D.E. 1-1 at 19 (emphasis added). Read as
a whole and in the context of its directly preceding provisions, it is
apparent to us that the “credits” to be used to offset the Annual
Maintenance Charge refer to the credits attributable to the invest-
ment management fees paid to affiliates of John Hancock by an
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22-12366 Opinion of the Court 25
underlying investment vehicle. The term “credits” does not refer
to or include foreign tax credits. Other than the coincidental usage
of the word “credit” in foreign tax credits, we do not see how the
Romanos can support their assertion that foreign tax credits fit
within the contract’s listing of revenue sources. 6
Because the Romano Law Plan does not have a beneficial
ownership interest in the foreign tax credits, those credits were not
plan assets under ERISA. John Hancock therefore had no fiduciary
obligations to the Romano Law Plan based on its discretionary au-
thority over such credits.
B
The Romanos also contend that, regardless of whether the
foreign tax credits constituted plan assets, John Hancock was an
ERISA fiduciary because the challenged conduct—the retention of
the foreign tax credits—arose from its exercise of discretionary au-
thority over the management and administration of the separate
accounts. We are not persuaded.
“In every case charging breach of ERISA fiduciary duty, . . .
the threshold question is not whether the actions of some person
employed to provide services under a plan adversely affected a plan
beneficiary’s interest, but whether that person was acting as a fidu-
ciary (that is, was performing a fiduciary function) when taking the
action subject to the complaint.” Pegram, 530 U.S. at 226. As noted
earlier, “ERISA recognizes that a person may be a fiduciary for
6 For the same reason, we do not find this aspect of the contract ambiguous.
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26 Opinion of the Court 22-12366
some purposes and not others.” Loc. Union 2134, United Mine Work-
ers of Am. v. Powhatan Fuel, Inc., 828 F.2d 710, 714 (11th Cir. 1987).
Sometimes when a service provider has sufficient “control over fac-
tors that determine the actual amount of its compensation . . . the
person thereby becomes an ERISA fiduciary with respect to that
compensation.” F.H. Krear & Co. v. Nineteen Named Trs., 810 F.2d
1250, 1259 (2d Cir. 1987).
The Romanos’ theory is as follows. John Hancock adminis-
tered and managed the separate accounts that contained sub-ac-
count mutual funds. Some of those mutual funds invested in for-
eign securities and were therefore subject to foreign taxes. The
shares of the mutual funds, however, were purchased with assets
from the pooled 401(k) plans, such as the Romano Law Plan. So
the pooled plans were paying the foreign taxes, while John Han-
cock received the foreign tax credits. Because John Hancock would
not have received the foreign tax credit but for its ownership and
management of the separate accounts, it would not be able to “re-
ceive” and retain the foreign tax credits. By managing those sepa-
rate accounts, John Hancock was an ERISA fiduciary with regard
to its retention of the value of the foreign tax credits. In short, ac-
cording to the Romanos, because the foreign tax credits arose from
its management of the separate accounts that contain mutual funds
with certain foreign investments, John Hancock was an ERISA fi-
duciary with regard to the foreign tax credits that would not have
existed absent the foreign investments. This narrative sounds su-
perficially convincing, but it only tells half the story.
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22-12366 Opinion of the Court 27
Even assuming that the foreign tax credits constituted “com-
pensation,” John Hancock did not have control over the factors
that gave rise to them. It is undisputed that the Romano Law Plan
and its participants chose which investment vehicles and mutual
funds to invest in. It is also undisputed that the Romano Law Plan
and its participants chose certain mutual funds that invested in for-
eign securities. Nobody contends that John Hancock advised or
otherwise persuaded the Romano Law Plan and its participants to
choose as they did. Indeed, the recordkeeping agreement explains
that John Hancock would not have any discretionary authority or
responsibility for the management or control of the separate ac-
counts’ assets; rather, its authority was limited to holding the assets
and allocating them as instructed by the Romanos and the partici-
pants of the Romano Law Plan. And John Hancock also has no
control over whether it is required to include the foreign taxes as
grossed-up income on its U.S. taxes returns; the mutual funds make
that decision. See 26 U.S.C. § 853.
As the Romanos concede, “[t]he source matters.” Appel-
lants’ Br. at 41. Here, the source of the foreign tax credits was the
Romanos’ choice of the foreign investments, not John Hancock’s
management of the separate accounts. See, e.g., Cotton, 402 F.3d at
1279 (“Mass Mutual has never exercised discretionary authority or
control over plan management or the administration of plan assets
because the decisions to purchase, amend, and borrow against the
policies were made by the plaintiffs themselves. Cases holding that
insurers like Mass Mutual are not ERISA fiduciaries are numer-
ous.”) (collecting cases); Allen v. Credit Suisse Sec. (USA) LLC, 895
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28 Opinion of the Court 22-12366
F.3d 214, 224 (2d Cir. 2014) (“[O]ne factor weighing against the con-
clusion that the defendant banks controlled the Plans’ assets is that
the transactions at issue were initiated not by the banks but at the
discretion of the Plans’ independent investment managers.”);
Leimkuehler v. Am. United Life Ins. Co., 713 F.3d 905, 910 (7th Cir.
2013) (rejecting a fiduciary theory where the funds and share clas-
ses included by the service provider on its platform shaped the
compensation it would receive, and concluding that the plan spon-
sor had “the final say on which investment options” would be in-
cluded); Consol. Beef Indus., Inc. v. N.Y. Life Ins. Co., 949 F.2d 960, 965
(8th Cir. 1991) (holding that an insurer was not acting as a fiduciary
when, through its agent, it “simply sold . . . annuities” and “did not
recommend specific investments beyond its products”).7
The Romanos also argue that John Hancock became a fidu-
ciary as to the foreign tax credits because the parties’ agreements
did not explicitly authorize it to retain those credits. They essen-
tially contend that once the foreign tax credits became available to
John Hancock, it had discretion to give the plans a commensurate
monetary benefit—and that discretion operated to create fiduciary
status over retention of the credits.
7 The Romanos also insist that John Hancock “has complete control over the
disposition and management of the [foreign tax credits],” and therefore, be-
cause its relationship with the Romano Law Plan gives its complete control
over the foreign tax credits, it must be a fiduciary with respect to those credits.
But this theory presupposes that the credits are plan assets, which, as dis-
cussed, they are not.
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22-12366 Opinion of the Court 29
We decline to create fiduciary status based on non-existent
contractual provisions about non-plan assets. We agree with the
district court that the application of foreign tax credits on its own
tax filings did not give John Hancock discretion over plan manage-
ment. See, e.g., Lanfear, 679 F.3d at 1283–84 (concluding that the
defendants were not ERISA fiduciaries when they filed inaccurate
SEC statements and prospectuses, because when doing so “they
were acting in their corporate capacity and not in their capacity as
ERISA fiduciaries”); Barnes v. Lacy, 927 F.2d 539, 544 (11th Cir.
1991) (“[P]lan administrators assume fiduciary status only when
and to the extent that they function in their capacity as plan admin-
istrators, not when they conduct business that is not regulated by
ERISA.”) (internal quotation marks omitted). Cf. Ret. Plans Comm.
of IBM v. Jander, 589 U.S. 49, 54–55 (2020) (Gorsuch, J., concurring)
(“Because ERISA fiduciaries are liable only for actions taken while
‘acting as a fiduciary,’ it would be odd to hold the same fiduciaries
liable for ‘alternative action[s they] could have taken’ only in some
other capacity.”) (internal citations omitted).
John Hancock was not an ERISA fiduciary with regard to its
application and retention of the foreign tax credits. Because fiduci-
ary status is a prerequisite for both of the Romanos’ claims—the
claim for breach of fiduciary duty and the claim for engaging in a
prohibited transaction—those claims fail as a matter of law.
V
The district court correctly granted summary judgment in
favor of John Hancock on the merits. Although the district court
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30 Opinion of the Court 22-12366
erred in holding that the Romanos and the plans lacked Article III
standing, we agree that John Hancock was not an ERISA fiduciary
for the challenged conduct, i.e., the application and retention of the
foreign tax credits.
AFFIRMED.