Conkright v. Frommert
The Supreme Court ruled that a single honest mistake by a company pension plan's administrator does not strip that administrator of the deference courts normally give to its interpretations of the plan.
The decision rejects a rule the appeals court had created that would have made administrators start from scratch with no deference every time a court found an earlier interpretation unreasonable, preserving a more predictable, less litigious system for resolving pension disputes nationwide.
“People make mistakes. Even administrators of ERISA plans.”
The Court's opening framing of why one honest interpretive error shouldn't cost a plan administrator its usual deference.
How it got here: A federal trial court and then the Second Circuit twice ruled against giving the Plan Administrator deference on remand; Xerox's plan and administrators asked the Supreme Court to review that ruling.
The Case in Depth
What happened
Xerox employees who left the company in the 1980s received lump-sum payouts of benefits they had earned, then were rehired later. When they eventually retired, Xerox's plan administrator had to figure out how to reduce their new benefits to account for the money they had already received, so they weren't paid twice for the same years of work.
The question before the Court
If a company's pension plan administrator makes one honest mistake interpreting the plan, must courts stop deferring to that administrator's later interpretations?
The Court's answer
No — a single honest mistake by a pension plan administrator in interpreting the plan does not strip that administrator of the deference courts normally owe under Firestone Tire & Rubber Co. v. Bruch. The Court found no support in trust law, the plan's own terms, or ERISA's purposes for the Second Circuit's 'one-strike-and-you're-out' rule, which would have required courts to stop deferring to an administrator once an earlier interpretation of the same plan terms had been rejected.
Instead, the Court held that the ordinary deferential standard should keep applying: courts should ask only whether the administrator's new interpretation is reasonable. Stripping deference after one good-faith error, the Court reasoned, would make ERISA litigation more complicated and threaten the predictability and uniformity that letting employers rely on a single administrator's expertise is meant to provide.
Curious how the Court got there? See the step-by-step legal reasoning →
Why it matters
Employers and pension plan administrators across the country can continue relying on the deferential review standard when interpreting complicated retirement plans, even after a past mistake, which keeps disputes over benefits from turning into fresh rounds of costly litigation. Employees challenging benefit calculations will generally still need to show an interpretation is unreasonable, not just that the administrator once erred before.
What changes now
The case goes back to the lower courts, which must now apply the deferential standard to the plan administrator's post-remand interpretation of how to account for the employees' earlier lump-sum payouts, rather than the non-deferential approach they previously used. The Court did not decide whether the administrator's interpretation was itself reasonable, nor whether it satisfied ERISA's notice requirements, leaving those merits questions for the lower courts to resolve on remand.
What this does not decide
The Court did not decide whether the plan administrator's proposed interpretation on remand was actually a reasonable one, or whether it satisfied ERISA's notice requirements — those merits questions were left for the lower courts. The ruling also does not mean administrators always win; it only restores the ordinary reasonableness standard of review.
Concurrences and dissents
Dissent — Justice Breyer
“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”Breyer's objection that the majority's new rule will create its own litigation problems.
Justice Breyer argued that trust law is not actually unclear on this question and that courts have long had authority to craft their own remedy once a trustee has been found to have abused discretion, rather than being required to defer again. He would have affirmed the Second Circuit's decision, finding no abuse of the District Court's remedial authority and criticizing the majority's 'one free honest mistake' rule as impractical and likely to encourage administrators to draft ambiguous plans.
How the Court got there
The legal reasoning, step by step
- The Court applied Firestone Tire & Rubber Co. v. Bruch, its prior decision holding that when a retirement plan gives its administrator discretion to interpret disputed terms, courts must use a deferential standard of review and leave the administrator's interpretation alone if it is reasonable.
- The Court asked whether that deferential standard has an exception for administrators who have already had one interpretation of the same plan rejected as unreasonable, since the appeals court had carved out such an exception here.
- Looking to trust law, which guides but does not fully control ERISA questions, the Court found the sources split: some treatises and cases would let a court take over decision-making after an administrator's mistake, while others say a court should still let the trustee try again absent bad faith.
- Because trust law did not resolve the question, the Court turned to ERISA's underlying goals of efficiency, predictability, and uniformity, reasoning that these goals are undermined, not preserved, if administrators lose deference after a single good-faith error.
- The Court concluded that stripping deference after one mistake would inject costly side disputes into ERISA litigation over whether an administrator was interpreting the 'same terms' again, and would risk inconsistent interpretations of the same nationwide plan in different courts.
- Applying the ordinary deferential standard instead, the Court held that courts should ask only whether the administrator's later interpretation is reasonable, not treat an earlier reversal as an automatic disqualification.
Doctrinal impact
Cases affected by this decision
Reaffirms Firestone Tire & Rubber Co. v. Bruch (489 U. S. 101)
The Court relies on and applies Firestone's rule that plan administrators get deference when plans give them interpretive discretion.
Reaffirms Metropolitan Life Ins. Co. v. Glenn (554 U. S. ___)
The Court extends Glenn's logic that conflicts of interest don't strip deference to also cover honest mistakes.