Borneman v. Principal Life Insurance (291 F. Supp. 2d 935, 2003)

MEMORANDUM OPINION AND ORDER

PRATT, District Judge.

Plaintiffs Brian and Melissa Borneman filed this action on July 12, 2002, alleging various claims against Defendant Principal Life Insurance Company (“Principal”) and Defendant The Principal Select Savings Plan for Employees (“Plan”) under the Employee Retirement Income Security Act (“ERISA”), 29 U.S.C. §§ 1001 et seq. Plaintiff Brian Borneman was an employee of Defendant Principal and a participant in the Plan. Plaintiff Melissa Borneman is Brian Borneman’s wife and was a beneficiary under the Plan. Their claims arise from Principal’s imposition on Plan participants of a restriction on market timing trading within the investment accounts provided by the Plan. Specifically, Plaintiffs have asserted claims under 29 U.S.C. § 1132(a)(1)(B) for recovery of benefits under the Plan, under 29 U.S.C. §§ 1132(a)(2) and 1132(a)(3) for breach of fiduciary duty and invalidation of the market timing trading restriction, under 29 U.S.C. § 1140 for retaliation and interference, and under 29 U.S.C. § 1132(c) for failure to supply plan documentation.

On August 18, 2003, Defendants moved for summary judgment on all of Plaintiffs’ claims. On September 26, 2003, Plaintiffs submitted an opposition to Defendants’ motion, and requested that the Court grant summary judgment to Plaintiffs on each claim. The Defendants submitted a reply brief on October 17, 2003, and oral argument was held on October 30, 2003. The matter is fully submitted. For the reasons detailed, below, the Court grants Defendants’ motion in part and denies it in part, and grants Plaintiffs’ motion in part and denies it in part.

I. FACTS

Plaintiff Brian Borneman began working for Principal in 1994. During the time period relevant to this action, approximately the beginning of 2001 until November of 2001, Mr. Borneman worked as an assistant product development consultant in Principal’s Product Development Department. The Product Development Department is part of Principal’s Retirement and Investor Services (“RIS”) division.

Defendant Principal maintains the Principal Select Savings Plan for Employees, which is a 401 (k) plan, for its employees. Principal plays multiple roles within the context of the Plan. Principal is the Plan’s sponsor and administrator. The Plan is funded through a group annuity contract (“GAC”) issued by Principal, which also makes Principal the Plan insurer and investment manager. As an insurance company, Principal issues group annuity contracts to fund its clients’ retirement plans. Principal in its role as an employer is one of the clients who uses Principal in its role as an insurer and investment manager to fund its employee retirement plan. In these contracts, Principal agrees to pay benefits to a retirement plan’s participants and beneficiaries in a manner consistent with the employer’s plan. The assets backing Principal’s contractual promises with its clients are invested in various separate accounts, which function much like mutual funds. In a 401 (k) plan, which is the type of plan that Plaintiff Brian Borneman participated in during his employment with Principal, the individual plan participants direct their contributions to specific separate accounts. Each separate account has a specific investment focus. During the time period relevant to this action, Principal maintained six separate accounts that focused on international equities. The benefits due to individual plan participants are based on the returns associated with the separate accounts they have selected.

During the second half of 2000, Principal began to see high fluctuations of cash flow in the separate accounts. Toward the end of the year, Principal came to the conclusion that market timing trading was a factor in the fluctuations it was seeing. Market timing trading, in essence, involves short-term trades between domestic and international separate accounts. Shares in Principal’s separate accounts are repriced at 4:00 PM Eastern Standard time each day, the time that the U.S. stock market closes. When a participant in Principal’s 401 (k) plan purchases shares in a separate account during the day, the participant does so at the price prevailing at 4:00 PM. The 4:00 PM prices are calculated on the basis of the last traded price of the stocks in that fund. The prices for the international separate accounts are among those that are recalculated at 4:00 PM, however by this time the Japanese and European markets have already been closed for some time.

In an internal study, Principal found that the performance of its international separate accounts on any given day was highly correlated with the performance of the NASDAQ on the previous day, meaning that the NASDAQ’s performance on any one day could be used, albeit perhaps imperfectly, as a predictor of what would happen in the international separate accounts on the following day. The correlation between the domestic markets and Principal’s international separate accounts provided the opportunity for low-risk arbitrage between the domestic and international separate accounts. A participant could look for an increase in the NASDAQ or another domestic market index, then purchase shares in one of the international separate accounts that day. The participant would buy in at the price reflected at 4:00 PM, after the relevant international markets had already closed and before the international markets had responded to the NASDAQ increase. Because of the correlation between the NASDAQ and the international separate accounts, the likelihood was that the foreign markets would increase the next day, the value of the investor’s investment from the previous day would rise, and the investor would then sell the international shares to capture the gain and move his or her money back to domestic investments to await another opportunity to invest internationally. As Principal did not charge fees for transfers between the separate accounts, a participant would not incur costs as a result of these trades.

As will be discussed in more detail below, Principal decided that market timing trading was having a negative impact on the performance of its international separate accounts. To deal with this issue, Principal decided to take steps to limit market timing trading in the separate accounts of its various plans. The plan document that governs the Plan provides that Plan participants can direct contributions and order transfers “to the extent permitted by the ... [GAC].” In a Separate Account Investment Rider, which is a part of the GAC, there is language expressing that Principal in its capacity as investment manager “reserve[s] the right to defer or stop your ability to direct Contributions and transfers to a Separate Account.” It was this language upon which Principal relied as authority to impose the market timing trading restriction.

In order to implement the limitation, Principal first identified the corporate clients and individual participants who were engaged in market timing trading. As of January 2001, Principal had identified among its clients, not simply within the Plan it sponsored for its own emplojr-ees, 36 plan sponsors and 80 individuals who were engaged in market timing trading. The company sent each of the affected plan sponsors a letter indicating that it included members who had initiated an excessive number of one-day transfers between domestic and international separate accounts. The letter asked each sponsor to voluntarily control the activity, and indicated that if the market timing did not stop Principal would enforce new guidelines limiting member transfers involving international separate accounts to $30,000 per day.

Plaintiff Brian Borneman was one of the individuals who was identified as having engaged in market timing trading within the separate accounts of the Plan. Plaintiff became aware of the correlation between domestic market indices and Principal’s international separate accounts after a market professional apprised him of the connection between international economies. Plaintiff began engaging in market timing trading around September or October of 2000. Market timing trading was very profitable for Mr. Borneman. He claims that during the first four months of 2001 he earned approximately an 11% return on his account, in a market that was down 20 to 25%. In February of 2001, Plaintiff and other members of his department received an e-mail explaining that Principal, in its role as investment manager to the Plan, was asking some of its customers to stop excessive market timing trading by participants in their plans. The e-mail indicated, among other things, that market timing trading increased the cost of portfolio management, increased brokerage transaction costs, and decreased investment performance for all individuals using the particular investment option being traded in this manner. Attached to the e-mail was a sample letter to customers, which indicated that if the activity did not stop, Principal would restrict market timing trading for each plan participant to $30,000 per day. This e-mail was not sent to Plaintiff in his capacity as a Plan participant and it did not expressly call upon him to take any action with respect to his own market timing trading. Plaintiff continued market timing trading after receiving this correspondence.

In the spring of 2001, in order to comply with Principal’s request to voluntarily limit employee market timing trading, Tammy DeHaai, who acted as Plan Administrator for Principal, obtained a list of Plan participants who were engaged in market timing trading. Brian Borneman was one of the individuals identified. DeHaai then contacted the identified employees’ managers and asked them to discuss market timing trading with those employees. On April 27, 2001, Joni Tibbetts, the officer in charge of Plaintiffs department, met with Plaintiff to discuss market timing trading. She requested that Plaintiff voluntarily discontinue his market timing trading activity, and indicated that if the market timing trading activity did not stop Principal would impose a $30,000 daily limit on transfer to the international separate accounts. Plaintiff continued market timing trading after this meeting.

Principal continued to monitor those clients and individuals who had been market timing trading in order to ascertain whether there had been voluntary compliance with the request to curtail market timing trading. For those clients who were unable to stop market timing trading within their plans, including Principal in its role as employer and plan sponsor, Principal as investment manager imposed a computer restriction in early June of 2001 that limited Plan participants to trading $30,000 per day in the international separate accounts. At the point at which the official limitation was imposed, Tibbetts, Natalie Bachman, Plaintiffs supervisor, and Chris Bowman, the head of Plaintiffs division, met with Plaintiff to communicate to him that effective immediately one-day transfers to the international separate accounts would be limited to $30,000 per day. They gave Plaintiff a memo that stated that Plaintiff would be fired if he violated the new limitations. After this time, Mr. Borneman complied with the $30,000 limit.

After engaging in discussions with management about his market timing trading, Plaintiff was subsequently given a poor performance review, placed on written warning in August of 2001, placed on final warning in October of 2001, and ultimately terminated as part of a reduction in force (“RIF”) by Principal in November of 2001.

II. SUMMARY JUDGMENT

A. The Legal Standard

Federal Rule of Civil Procedure 56(c) provides that summary judgment “shall be rendered forthwith if the pleadings, depositions, answers to interrogatories, and admissions on file, together with the affidavits, if any, show that there is no genuine issue as to any material fact and that the moving party is entitled to a judgment as a matter of law.” An issue is genuine “if the evidence is such that a reasonable jury could return a verdict for the nonmoving party.” Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248, 106 S.Ct. 2505, 91 L.Ed.2d 202 (1986). A fact is material if the dispute over it might affect the outcome of the suit under the governing law. Id.

The moving party has the burden of demonstrating the absence of a genuine issue of material fact. See Celotex Corp. v. Catrett, 477 U.S. 317, 323, 106 S.Ct. 2548, 91 L.Ed.2d 265 (1986); Anderson, 477 U.S. at 248, 106 S.Ct. 2505. In meeting its burden, the moving party may support his or her motion with affidavits, depositions, answers to interrogatories, and admissions. See Celotex, 477 U.S. at 323, 106 S.Ct. 2548. Once the moving party has carried its burden, the nonmoving party must go beyond the pleadings and, by affidavits or by the depositions, answers to interrogatories, and admissions on file, designate the specific facts showing that there is a genuine issue for trial. See Fed.R.Civ.P. 56(c), 56(e); Celotex Corp., 477 U.S. at 322-323, 106 S.Ct. 2548; Anderson, 477 U.S. at 257, 106 S.Ct. 2505. The role of summary judgment is to “pierce the boilerplate of the pleadings and assay the parties’ proof in order to determine whether trial is actually required.” Wynne v. Tufts University School of Medicine, 976 F.2d 791, 794 (1st Cir.1992) (citations omitted). In order to survive a motion for summary judgment, the non-moving party must present enough evidence for a reasonable jury to return a verdict in his or her favor. Anderson, 477 U.S. at 257, 106 S.Ct. 2505.

On a motion for summary judgment, the Court is required to “view the evidence in the light most favorable to the nonmoving party and give that party the benefit of all reasonable inferences.” United States v. City of Columbia, 914 F.2d 151, 153 (8th Cir.1990). The Court does not weigh the evidence or make credibility determinations. See Anderson, 477 U.S. at 252, 106 S.Ct. 2505. The Court only determines whether there are any disputed issues and, if so, whether those issues are both genuine and material. Id.

B. Recovery of Benefits under the Plan

Plaintiffs claim, pursuant to 29 U.S.C. § 1132(a)(1)(B), that Principal and the Plan have denied benefits due to them under the Plan by restricting market timing trading in contravention of the Plan’s terms. The benefits denied, Plaintiffs allege, include lost past and future investment earnings under the Plan; presumably, return on market timing trading over $30,000 per day that Plaintiff Brian Borne-man could have engaged in had the market timing trading restriction not been imposed.

In their motion for summary judgment, Defendants offer four arguments in support of granting judgment as a matter of law against Plaintiffs on this claim: 1) Principal as investment manager properly exercised its reserved authority under the GAC to restrict market timing trading; 2) Principal as Plan Administrator reasonably interpreted the plan documents as permitting Principal as investment manager to restrict market timing trading; 3) even if the Plan Administrator’s reading of the plan documents was not the only possible interpretation, the Administrator did not abuse its discretion in interpreting the documents to permit a restriction on market timing trading; and 4) even if the plan documents did not permit the market timing trading restriction, Principal’s fiduciary obligations would still have required it to limit such activity.

The Court notes at the outset that the mandatory restriction on market timing trading was not instituted until early June of 2001. It is undisputed that, although Principal as Plan Administrator and employer of Mr. Borneman requested as early as April of 2001 that Mr. Borneman voluntarily restrict or discontinue his market timing trading, Mr. Borneman in fact continued market timing trading until approximately June 14, 2001, at which time Principal in its role as investment manager imposed the mandatory $30,000 per day restriction on market timing trading on all employees who participated in Principal’s 401(k) plan. The restriction of which Plaintiffs complain then, did not take effect until June 2001. The only relevant time period for purposes of Plaintiffs’ claim for benefits under the Plan, then, is the period after June 14, 2001, when the restriction was actually imposed on Mr. Borneman. Before that time, there was no mandatory restriction in place to prevent Mr. Borne-man from making trades greater than $30,000 per day in and out of the international separate accounts, and the undisputed evidence indicates that Plaintiff did indeed continue making such trades during the time between April and June of 2001.

1. Principal as Investment Manager

The first question the Court addresses is whether Principal in its role as investment manager had the authority to impose the market timing trading restriction on participants and beneficiaries of the Plan. Defendants argue that subsection G.2 of the Separate Account Investment Rider appended to the GAC gave it such authority. Section G provides that Principal as investment manager “reserve[s] the right to defer or stop your ability to direct Contributions and transfers to a Separate Account, and we may require you to transfer existing account balances out of a Separate Account.” The four subsections under section G delineate the conditions under which Principal can exercise this authority. Defendants argue that subsection 2 is the relevant one for purposes of this litigation. Subsection 2 provides that Principal can exercise its authority to defer or stop contributions or transfers if it “believe[s] it would be imprudent not to do so in fulfilling our fiduciary role as an investment advisor under ERISA.”

The Court will address the general “defer” and “stop” language of section G and the language of subsection 2 separately. The Court acknowledges and will discuss below Defendants’ argument that Principal’s decision as Plan Administrator to impose the market timing trading restriction is entitled to review under an abuse of discretion standard because the Plan Administrator is vested with the discretion to construe and interpret provisions of the plan, even where they are ambiguous. See Cash v. Wal-Mart Group Health Plan, 107 F.3d 637, 641 (8th Cir.1997). There is, however, no argument that the decision of Principal as investment manager to impose such a restriction is entitled to review under the more lenient abuse of discretion standard. The language of the plan document clearly provides that it is the Plan Administrator only who has the right to construe provisions of the Plan. The Plan Administrator is defined in the plan as the employer. Although Defendant Principal wears multiple hats in the context of this ERISA plan, its roles must be separated for analytical purposes. Principal in its role as investment manager is not the entity who has discretionary authority to construe the Plan’s provisions. Consequently, its decision to impose market timing trading is reviewed de novo. Cash, 107 F.3d at 640-41 (“ERISA itself does not specify a standard of review; however, the Supreme Court has held that a reviewing court should use a de novo standard of review unless the plan gives the ‘administrator or fiduciary discretionary authority’ to ... construe the terms of the plan.” (citations omitted)). “In the de novo review of an ERISA plan, we interpret the terms of the plan by ‘giving the language its common and ordinary meaning as a reasonable person in the position of the [plan] participant, not the actual participant, would have understood the words to mean.’ ” Hughes v. 3M Retiree Med. Plan, 281 F.3d 786, 790 (8th Cir.2002) (quoting Chiles v. Ceridian Corp., 95 F.3d 1505, 1511 (10th Cir.1996).

a. “Defer or stop’’

Plaintiffs argue that the “defer or stop” language of section G does not give Defendants the authority to limit the amount of money with which a plan participant can engage in market timing trading. Defer, they argue, is consistently defined within the GAC as referring to the timing of trading, rather than the amount being traded. The Court is inclined to agree that the word “defer” does not, based on the evidence in the record, aptly describe Principal’s action in restricting trading over $30,000 per day. The word stop, however, does. Plaintiffs argue that because the $30,000 restriction does not stop trading altogether, it is not an appropriate restriction under the language of section G of the GAC. However, the $30,000 l’estriction does in fact stop trading. Specifically, it stops trading in the international separate accounts in amounts exceeding $30,000 per day.

The Court finds Plaintiffs’ argument that Principal should have used a word such as “limit” or “restrict” in section G if it had intended to allow a restriction such as the one imposed on market timing trading unpersuasive. First, Principal did use a variation of the word restrict in the heading of section G: “Deposits to Separate Accounts; Restrictions and Order of Entry.” (emphasis added). Second, Plaintiffs argue that the plan document and the GAC were intended to allow participants the freedom to select the investments each participant decided were most appropriate for his or her individual needs, and that this intended flexibility is an indication that the “defer or stop” language cannot authorize the imposition of the market timing trading restriction. This argument defies logic, as the defer or stop language in section G, whether or not it authorizes a restriction on market timing trading, certainly recognizes the authority of Principal in its role as investment manager to control the trading of Plan participants in some manner. The flexibility that Plaintiffs argue inheres in the Plan is not without limitation. Consequently, an argument that asserts, based on the Plan’s intended flexibility for participants, that any type of restriction on participant contributions is invalid is completely inconsistent with the defer or stop language of section G.

In fact, Plaintiffs’ flexibility argument cuts the other way. Here, rather than carving out a much broader limitation than it thought necessary to comply with its fiduciary duty to beneficiaries and participants of the Plan, Principal instead attempted to allow employees trading in the international separate accounts some flexibility in continuing to do so, within certain boundaries established by Principal in its role as investment manager. Thus, Principal’s solution to the market timing trading issue, restricting trading over $30,000 per day, accords mox-e closely with the goals of the Plan as defined by Plaintiffs than does a rule completely prohibiting any and all market timing trading, which Plaintiffs seem to argue would be authorized under the “defer or stop” language of the GAC. Consequently, a reasonable participant who understood the Plan as providing a measure of flexibility would presumably understand the language of section G to mean that if Principal felt a fiduciary responsibility to stop trading in some way, it would be authorized to do so in the least restrictive way possible within the bounds of the “defer or stop” language.

Despite Plaintiffs’ argument to the contrary, it is of no consequence whatsoever that the drafter of the disputed language in the GAC did not specifically have market timing trading in mind when drafting the language. In section G, Principal did not reserve for itself the authority to defer or stop certain categories of trading activities. Rather, it reserved for itself the right to defer or stop contributions or transfers in four specifically delineated situations. The fact that Principal was not aware of market timing trading at the time the GAC was drafted does not mean that the GAC’s provisions cannot be used to limit market timing trading, if such a limitation falls within the plain language of the provision.

In summary, the Court believes that a reasonable Plan participant would have understood Principal’s reservation of the right to “stop” trading in section G as including the right to partially stop trading, including, as was done here, to stop trading over a certain dollar level.

b. Fiduciary Duty to Restrict Market Timing Trading

The second portion of the clause that Defendant Principal contends allowed them to impose the market timing trading restriction provides that direction of contributions or transfers can be “defer[red] or stop[ped]” if Principal “believe[s] it would be imprudent not to do so in fulfilling our fiduciary role as an investment advisor under ERISA.” As discussed in the previous section, Plaintiffs have argued that the “defer or stop” language contained in the GAC does not itself permit a restriction or limitation on market timing trading. Plaintiffs premised their entire opposition to summary judgment on this claim on the “defer or stop” limitation, indicating that subsection 2 of section G is “immaterial to this motion because it applies only if Defendants have the right to impose the limitation, which they do not.” Plaintiffs indicated that they would not address subsection 2, but that they did not concede any legal argument or factual assertion made by Defendants with respect to subsection 2.

Under ERISA, Principal acting in its capacity as an investment manager to the Plan is clearly a fiduciary. 29 U.S.C. § 1102(21)(A) (“a person is a fiduciary with respect to a plan to the extent ... he exercises any discretionary authority or discretionary control respecting management of such plan or exercises any authority or control respecting management or disposition of its assets” or “renders investment advice for a fee ... with respect to any moneys or other property of such plan”). ERISA holds fiduciaries to a prudent person standard of care and requires that fiduciaries discharge their duties with respect to a plan solely in the interest of the participants and beneficiaries and, inter alia, for the exclusive purpose of providing benefits to participants and their beneficiaries and “with the care, skill, prudence, and diligence under the circumstances then prevailing that a prudent man acting in a like capacity and familiar with such matters would use in the conduct of an enterprise of a like character and with like aims.” 29 U.S.C. § 1104(a)(1). The prudent person standard mandated by § 1104(a) is an objective standard that focuses on the fiduciary’s conduct preceding a challenged decision. Roth v. Sawyer-Cleator Lumber Co., 16 F.3d 915, 917-918 (8th Cir.1994) (citations omitted). To say a decision is objectively reasonable “require[s] taking into account everything that the trustees should have known at the time of their decision.” Id. at 919 (emphasis in original) (citations omitted). As a fiduciary, Principal has a duty to act in the best interests of all plan participants and beneficiaries, not simply a duty to act in the best interests of each individual plan participant or beneficiary. Varity Corp. v. Howe, 516 U.S. 489, 514, 116 S.Ct. 1065, 134 L.Ed.2d 130 (1996) (“The common law of trusts ... requires a trustee to take impartial account of the interests of all beneficiaries.”).

In support of summary judgment, Defendants have pointed to deposition testimony from Principal executives indicating that portfolio managers reported high fluctuations in cash flow in the second half of 2000 in the separate accounts. The portfolio managers reported increased transactions costs and reported that they were having to maintain a high level of liquidity within the accounts to deal with the additional costs. Additionally, because they had to maintain a high level of cash on hand, their portfolios were not fully invested. When the market is going up, a portfolio will not get as much return on cash as on securities, so holding a large amount of cash can be detrimental to the performance of a separate account. Plus, portfolio managers would occasionally be forced to sell shares at less than optimal prices in order to get the cash to make the transactions that were being requested by individual clients in the separate accounts.

In the fourth quarter of 2000, approximately four to six months before requesting that Brian Borneman voluntarily discontinue market timing trading and approximately seven months before imposing the market timing trading restriction, Principal came to the conclusion that market timing trading was a factor in the high fluctuation of cash flows in the separate accounts. At this time, a group of Principal executives discussed Principal’s options with respect to market timing trading. Three plans were discussed: 1) instituting a lockout period, such that once a plan participant had made a transaction within the separate accounts, further transactions would be unavailable for a certain time period after the transaction (specifically, Principal discussed a 30- or 60-day lockout period); 2) charging high fees for the transactions, while continuing to allow the trading to take place; and 3) putting a dollar limit on market timing trading within the separate accounts. Principal decided not to implement either of the first two options. A lockout period, it feared, would discourage transactions and make its product appear less attractive to employers who wanted to give employees the freedom to invest money as they chose. It decided against the fees for transactions systems because of the costs and complexity associated with implementing such a system, which Principal did not already have in place. In making the decision to implement a $30,000 trading limit, Principal looked at the actions of peer and competitor institutions for guidance.

There is undisputed testimony in the record that Principal believed that market timing trading was having a detrimental effect on the performance of its separate accounts. In a confidential e-mail sent in February, 2001, Principal’s Media Relations Manager indicated that “[mjarket timing is not illegal, but it creates cash flow problems for the money managers, costs for us and most important, performance drain (10% drain on accounts)— meaning the activity of a select few is negatively impacting all other plan members’ performance.” Additionally, Defendants presented deposition testimony from one of Principal’s vice presidents that market timing trading was hurting non-market timing trading employees who invested in Principal’s plans. Other courts have recognized the deleterious effects of market timing trading on a fund designed for long-term investment. See Windsor Securities, Inc. v. Hartford Life Insurance Co., 986 F.2d 655, 658, 665-66 (3rd Cir.1993); First Lincoln Holdings, Inc. v. Equitable Life Assurance Society of the United States, 164 F.Supp.2d 883, 389-90 (S.D.N.Y.2001).

Additionally, Defendants have appended to their summary judgment pleadings an article from April 2001 from Mutual Fund Market News, entitled “Insurers Try to Work with Market Timers.” Published approximately two months before Principal imposed mandatory market timing trading restrictions on its clients, the article helps to clarify the context in which Defendant Principal was acting in order to determine whether its actions qualify as those of a prudent person under 29 U.S.C. § 1104(a). The article indicates the “dilemma” of insurance companies who want to provide flexibility to investors:

[W]hen excessive trading in and out of variable annuity sub-accounts occurs, both sides get frustrated. In many cases, managers are forced to sell securities to meet sizeable redemptions, and then must rush to reinvest those same assets when they come back into the fund a few days later. Fund expenses related to an increased volume of trades can quickly drag down performance. And, assets repeatedly moving in and out of a fund can seriously disrupt a fund manager’s investment strategy.

Defendants also produced a letter dated June 15, 2001 from Oppenheimer Funds, which is addressed “Dear Financial Advis- or” and goes on to note that the company has

experienced a substantial increase in short-term trading activities in the mutual funds managed by our global equity team. This has resulted in large day-today changes in the cash positions of the relevant funds. Short-term money movements make the funds’ portfolio managers reluctant to invest cash, which can negatively impact the respective fund’s performance. Similarly, investing cash but then redeeming portfolio securities to satisfy redemptions caused by short-term money movements forces the funds to incur additional brokerage costs, to the detriment of long-term shareholders.

This letter is dated just a few days after Principal imposed its market timing trading restriction and, as such, is reflective of what was going on in the mutual fund market around the time the restriction was imposed. Such information helps to shed light on whether the phenomenon of market timing trading carried the negative consequences that Defendants have alleged it did and whether Principal’s response was in accordance with their fiduciary duty under § 1104(a).

A plaintiff making a claim under § 1132(a)(1)(B) bears the burden of proving an entitlement to plan benefits. See Farley v. Benefit Trust Life Ins. Co., 979 F.2d 653, 658 (8th Cir.1992). Plaintiffs have not pointed the Court toward any evidence tending to show that either 1) market timing trading was not detrimental to the overall performance of Principal’s separate accounts; or 2) Principal was not acting in the interests of the Plan’s participants and beneficiaries in imposing the market timing trading restriction. Rather, Plaintiffs have simply challenged the authority of Principal executives to offer testimony addressing the detrimental impact of market timing trading on the Plan. In their response to Defendants’ statement of material facts, Plaintiffs object to use of deposition testimony by Mark Stark, an investment liaison officer for Principal, and Paul Brown, a Principal vice president, to support statements that the high fluctuations in cash flow experienced as a result of market timing trading had a negative impact on the performance of the international separate accounts. In deciding on summary judgment, the Court’s role is not to weigh the evidence or make credibility determinations. See Anderson, 477 U.S. at 252, 106 S.Ct. 2505. The Court finds that the Defendants met their burden of showing an absence of genuine dispute as to any material fact regarding the negative impact of market timing trading on the Plan. Defendants presented evidence indicating a detrimental impact of market timing trading on the performance of Principal’s separate accounts.

It is fundamental that once a summary judgment motion has been made and properly supported, “an adverse party may not rest upon the mere allegations or denials of the adverse party’s pleading, but the adverse party’s response, by affidavits or as otherwise provided in this rule, must set forth specific facts showing that there is a genuine issue for trial. If the adverse party does not so respond, summary judgment, if appropriate, shall be entered against the adverse party.” Fed.R.Civ.P. 56(e). Here, however, Plaintiffs have failed to set forth any facts that show a genuine issue for trial on this issue. Plaintiffs have objected to the knowledge of the individuals through whom Defendants have provided facts about the negative impact of market timing trading. However, Plaintiffs have not attempted to present testimony from anyone they consider appropriate to address this issue. The role of summary judgment is to “pierce the boilerplate of the pleadings and assay the parties’ proof in order to determine whether trial is actually required.” Wynne v. Tufts University School of Medicine, 976 F.2d 791, 794 (1st Cir.1992) (citations omitted). In order to survive a motion for summary judgment, the nonmoving party must present enough evidence for a reasonable jury to return a verdict in his or her favor. Anderson, 477 U.S. at 257, 106 S.Ct. 2505. Plaintiffs have not done so here.

2. Principal as Plan Administrator

The Court must also decide if Principal’s actions as Plan Administrator in acquiescing to the market timing restriction imposed by Principal as investment manager were authorized by the Plan. Initially, there is a dispute between the parties as to whether the Plan Administrator’s construction of the “defer or stop” language in the GAC is entitled to review under an abuse of discretion standard. Defendants argue that since the Plan Administrator was given discretion by the Plan itself to construe the Plan’s terms that Ms. DeHaai’s decision for Principal as employer and Plan Administrator to allow the market timing restriction must be reviewed only to determine whether the decision was reasonable; that is, whether it was supported by substantial evidence. Cash, 107 F.3d at 641. Under abuse of discretion review, the administrator’s decision is reasonable if “a reasonable person could have reached a similar decision, given the evidence before him, not that a reasonable person would have reached that decision.” Id. (citation omitted).

What the Plan Administrator did in acquiescing to Principal as investment manager’s exercise of a reserved right under the GAC does not strike the Court as an exercise of discretion in interpreting the Plan’s provisions, as the Plan authorizes. The law surrounding ERISA does permit plan administrators to reserve for themselves discretion to construe plan terms, and it is clear that the plan document in question here did so. However, the Group Annuity Contract is a separate document from the plan document. The plan document defines the relationship between Principal as employer and its employee participants and beneficiaries. The GAC, however, is a contract whose parties are Principal, in its role as investment advisor, and Principal, in its role as employer. Defendants argue that the plan document incorporates the GAC by reference. Section 4.04 of the Plan, entitled “Investment and Timing of Contributions,” provides that

The handling of Contributions is governed by the provisions of the Trust Agreement, the Annuity Contract [GAC], and any other funding arrangement in which the Plan Fund is or may be held or invested. To the extent permitted by the Trust Agreement, Annuity Contract [GAC], or other funding arrangement, the parties named below shall direct the Contributions to ... any of the investment options available under the Annuity Contract ... and may request the transfer of amounts resulting from those Contributions between such investment options and investment vehicles or the transfer of amounts between the guaranteed benefit policy portion of the Annuity Contract and such investment options and investment vehicles.

In order to decide whether the Plan Administrator is interpreting the Plan’s terms in making a disputed decision under the Plan, it is necessary to examine what question the Administrator was required to answer in making the decision. Hogan v. Raytheon, Co., 302 F.3d 854, 856-57 (8th Cir.2002). If the question the administrator is answering does not require an interpretation of the Plan’s terms, de novo review is appropriate. Id. (citations omitted). In making the decision about whether to acquiesce to Principal’s imposition of a market timing trading restriction, the question that Principal as Plan Administrator was required to answer was whether Principal as investment manager was permitted to restrict market timing trading to $30,000 per day in the international separate accounts. This question required interpretation of the GAC, not the plan document itself, which the Plan Administrator has no discretion to construe. Defendants admit as much in their brief, indicating that at the point at which Principal imposed the mandatory restriction, the Plan Administrator “no longer had the discretion to prevent the restrictions.” Thus, Principal’s decision as Plan Administrator regarding the market timing trading restriction is reviewed de novo.

The Court has already found that the language of the GAC permitting Principal as investment manager to “defer or stop” contributions did authorize the imposition of the market timing trading restriction of $30,000 per day. Thus, the Plan Administrator’s decision to acquiesce in the imposition of the market timing trading restriction was not a violation of the Plan’s terms, as the Plan expressly mandated deferring to the GAC with respect to direction of contributions and transfers into the international separate accounts.

Since the market timing trading restriction imposed by Principal was expressly permitted by the GAC, the Court need not address whether Principal would have had a fiduciary duty to violate the express terms of the Plan if the language had not permitted the restriction and if Principal had determined that it had a fiduciary responsibility under 29 U.S.C. § 1104 to restrict market timing trading. The Court notes, however, that if a fiduciary were truly presented with such a situation, the more appropriate avenue would seem to be the amendment of the Plan or GAC to impose such a restriction, unless emergency circumstances dictated faster action than would be possible through amendment.

3. Equitable Estoppel

Plaintiffs also oppose summary judgment on their claim for recovery of benefits under § 1132(a)(1)(B) on equitable estoppel grounds. They argue that Defendants are estopped from arguing that the plan documents, specifically the GAC, allowed imposition of the market timing trading restriction because of previous statements by Principal employees indicating that the restriction was not allowed under the terms of the plan. The facts as presented by Plaintiffs are essentially as follows. When Brian Borneman first learned of Defendants’ attempts to limit market timing trading, he inquired of various individuals at Principal whether the plan document, the GAC, or other documents permitted the limitation. The individuals with whom he spoke were: 1) Andrea McCoy, who drafted the language of section G of the GAC, and who told Mr. Borneman that it was not her intention when writing the language to allow such a restriction, since market timing trading did not exist then and she therefore had no knowledge of it; 2) Bret Taber, who is identified as someone who “works with McCoy,” who offered the opinion that the Defendants did not have authority under the GAC to impose the restriction; 3) Jim Aldridge and Ross Olt-mann, identified only as “Principal employees,” who allegedly told Mr. Borne-man that they did not believe the GAC allowed the market timing trading limitation. The Court notes that it can find no evidence in the summary judgment record that either identifies Jim Aldridge or Ross Oltmann or discloses any conversations that Mr. Borneman may have had with these individuals. Therefore, the Court will ignore Plaintiffs’ allegations regarding the statements of these individuals in addressing the equitable estoppel issue.

The Court finds numerous additional problems with Plaintiffs’ argument. Even if equitable estoppel can give rise to an ERISA claim, a question which the Eighth Circuit has left open, Jensen v. SIPCO, Inc., 38 F.3d 945, 953 (8th Cir.1994), a participant must prove a material misrepresentation on which he or she reasonably relied to his or her detriment. Id. (“[Cjourts recognizing estoppel in ERISA cases require proof of a material misrepresentation on which the participant or beneficiary has reasonably relied to his detriment.”) (citing Black v. TIC Inv. Corp., 900 F.2d 112, 115 (7th Cir.1990)).

Plaintiffs do not point the Court to any facts that indicate that Mr. Bornemaris reliance on the statements of any of these individuals would have been reasonable. Andrea McCoy was a contract writer for Principal. Mr. Borneman has testified that he asked her, subsequent to being informed in February of 2001 that Principal was requesting that plan sponsors ask participants to voluntarily discontinue market timing trading, whether anything in the GAC would allow Principal to impose a restriction on market timing trading of $30,000 per day. In her deposition, Ms. McCoy denied any recollection of this conversation. However, examining the evidence in the light most favorable to Plaintiffs, the best inference that can be drawn is that she told Mr. Borneman that she did not intend, when writing the contract, to allow latitude for Principal to restrict market timing trading. She offered no opinion as to whether Principal actually could impose the restriction. She only stated that she did not intend when writing the contract to allow such latitude. The Court does not find that this statement is contradictory to statements by Defendants that the plan documents did allow them to impose a market timing trading restriction. The contract drafter’s interpretation of contract language does not necessarily control, especially in the ERISA context. Both before and after that conversation, the undisputed evidence shows that Mr. Borneman had a significant amount of correspondence with individuals acting in an official capacity who communicated that indeed Principal did have authority under the plan documents to impose a market timing trading restriction of $30,000 per day. Although the Court does not find Ms. McCoy’s statement to be contradictory to those made by Principal employees later, even if it were Ms. McCoy was not authorized to speak for Principal on this matter to Mr. Borneman, and any assumption by Mr. Borneman otherwise would simply have been unreasonable based upon the undisputed facts in the record.

Mr. Taber is identified only as someone who worked “with/for” Ms. McCoy, and with whom Mr. Borneman has a “real good friendship both personally and professionally.” At his deposition, Mr. Borneman testified that “it was [Mr. Taber’s] opinion ... that the contract did not have the ability to limit people making those types of transfers.” (emphasis added). As with Ms. McCoy’s statement about the terms of the GAC, Mr. Taber’s statement does not convey an official interpretation of Plan terms. Any reliance by Mr. Borneman on this statement would have been unreasonable. There is absolutely no evidence offered by Mr. Borneman that either the statement of Ms. McCoy or that of Mr. Taber was one that either individual was authorized to make as a representative of Principal. Mr. Borneman did have a significant number of conversation in which authorized representatives of Principal discussed the market timing trading restriction with him, and the interpretation of the plan documents expressed in these conversations was universally contrary to the opinions expressed by Ms. McCoy and Mr. Taber.

Plaintiffs cite Kane v. Aetna Life Insurance, 893 F.2d 1283 (11th Cir.1990), as authority for their argument that statements of various Principal employees interpreting the GAC as not allowing the market timing trading restriction estop Defendants from now asserting a contrary interpretation. In that case, the Eleventh Circuit found that the federal common law of equitable estoppel could be applied in a case where one of the Plaintiffs, a Plan participant, relied on statements made on two occasions by “duly authorized representative[s]” of Defendant Aetna that his medical benefits plan would cover medical expenses for a young child he was about to begin the process of formally adopting. Id. at 1286. The Plaintiff thereafter incurred substantial medical expenses in reliance on this interpretation of the Plan. Id. The situation of Plaintiff Brian Borne-man is substantially different than that of the Plaintiff in Kane and Mr. Borneman, even with all inferences drawn in his favor, has not shown a material misrepresentation on which he reasonably relied to his detriment.

k. Nature of the Market Timing Trading Restriction Imposed

Separate from the issue of whether Principal had the right to impose any market timing limitation on participants and beneficiaries in its 401(k) plan is the issue of whether the Plan limited market timing trading to $30,000 per fund per day or $30,000 aggregate per day, and whether the restriction applied to rebalancing. Plaintiffs have treated this issue in their briefs as related to the issue of whether Defendant Principal breached its fiduciary duty to Plaintiffs by misrepresenting the true nature of the market timing trading limitation under the Plan. The argument, then, is that if Defendant breached its fiduciary duty, Plaintiffs are entitled to recovery of benefits under the Plan. Such an argument is expressly contemplated by the United States Supreme Court’s decision in Varity Corp. v. Howe, 516 U.S. 489, 512, 116 S.Ct. 1065, 134 L.Ed.2d 130 (1996). There, the Supreme Court noted that “ERISA specifically provides a remedy for breaches of fiduciary duty with respect to the interpretation of plan documents and the payment of claims ... one that runs directly to the injured beneficiary.” Id. (citing Massachusetts Mutual Life Insurance Company v. Russell, 473 U.S. 134, 144, 105 S.Ct. 3085, 87 L.Ed.2d 96 (1985) and 29 U.S.C. § 1132(a)(1)(B)).

It is undisputed that at all times between the imposition of the formal restriction and the termination of his employment that Plaintiff Brian Borneman was told by Principal that the market timing trading limit was an aggregate limit across all the international separate accounts. In order to determine whether Defendant Principal’s statements to Plaintiff Brian Borneman about the nature of the limit constituted a material misrepresentation, it is necessary to ascertain what policy limitation Principal actually implemented in early June of 2001. On this point, the evidence is disputed. Some members of Principal management involved with making the decision to impose the limitation thought it was to be an aggregate limitation. At least one member of the management team, Mark Stark, thought the limitation was to be a per fund limitation. The letter that Mark Stark sent out on behalf of Principal to inform plan sponsors about the possibility of a limitation does not specify whether the limitation is to be applied per fund or on an aggregate basis.

In early June of 2001, Principal placed a computer restriction on the Plan that limited participants to $30,000 per fund per day. There is testimony from Principal employees that the computer restriction was programmed this way because to program an aggregate limitation would have required a good deal more time and energy-

At a June 14, 2001 meeting, Plaintiff received a memo from Natalie Bachman, Joni Tibbetts, and Chris Bowman that stated that his one-day transfers would be limited to $30,000. On June 18, 2001, Plaintiff sent an e-mail to Natalie Bach-man asking for clarification as to whether the limitation was an aggregate or per fund limitation. Bachman sought guidance on this question from Paul Brown, who indicated that the limitation was to be applied in the aggregate.

On July 30, 2001, one of Principal’s retirement services relationship managers sent a letter to Tammy DeHaai to “follow up” on the market timing situation. In this letter, the relationship manager indicated that because certain Plan members had continued to engage in “excessive” market timing trading, Principal had implemented certain limitations in the Plan. Among the limitations listed was “[o]ne-day transfers from the domestic accounts into the international accounts will be limited to $30,000 per fund, per day.” It is undisputed that at least one Principal employee was being permitted to trade up to $30,000 per fund, per day.

Once Plaintiffs manager became aware of this letter and that the limitation imposed on Plaintiff was more stringent, she alerted management. On September 10, 2001, Principal’s vice president for human resources sent a letter to the individuals who had been identified as market timing traders stating that “[a]s clarification, the $30,000 amount is an aggregate limitation, not a per fund limitation.” (emphasis in original).

Principal argues that the facts demonstrate that its intention all along was to impose an aggregate limitation, and that there was simply confusion in implementing it. The Court, however, finds that a reasonable factfinder could also come to the conclusion that the intended limitation was a per fund limitation that was imperfectly implemented. Specifically, the fact that the computer limitation was programmed as a per fund limitation, the fact that Mr. Stark’s understanding was that the limitation was per fund, and the July 30, 2001 letter to Tammy DeHaai support this inference. However, because the evidence is not so one-sided as to foreclose the possibility that Principal’s interpretation of the facts is the correct one, the Court denies summary judgment to both parties on this segment of Plaintiffs’ claim. The Court notes that there is no dispute that Principal was acting as a fiduciary when it made statements to Plaintiff regarding the aggregate nature of the Plan limitation, nor is there dispute that the Plaintiff relied on these representations. If it is determined at trial as a matter of fact that the original limitation implemented in June 2001 was indeed a per fund limitation, rather than an aggregate limitation, then Principal’s statements to Plaintiff regarding the nature of the limit would have been material misrepresentations and Plaintiffs may be entitled to judgment on their claim for recovery of benefits under the Plan based on Principal’s breach of fiduciary duty.

Similar dispute exists as to whether re-balancing of an account constituted a transfer for purposes of the market timing trading restriction. In a June 21, 2001 email, Natalie Bachman informed Mr. Borneman that rebalancing of his account would be considered a same day transfer for purposes of the limitation and that if the $30,000 limit was exceeded because of account rebalancing, Mr. Borneman would be terminated. However, in Principal’s July 30 letter to Tammy DeHaai following up on the restriction, Principal indicated that the trading limit did not apply to rebalancing. The above analysis of the per fund versus aggregate confusion applies to the rebalancing situation as well. If it is determined at trial as a matter of fact that the limitation implemented by Principal did not in fact include rebalanc-ing in the daily amount total, Plaintiffs may be entitled to judgment for recovery of benefits that they could have obtained by rebalancing.

In summary, the Court grants Defendants’ motion for summary judgment to the extent that Plaintiffs’ claim for recovery of benefits under the Plan is premised on the invalidity of the market timing trading restriction generally. The Court leaves for trial the issue of whether Plaintiffs can recover benefits under the Plan based upon the imposition of a $30,000 aggregate limitation, rather than per fund, and based upon a prohibition on rebalanc-ing above $30,000 per day.

C. Breach of Fiduciary Duty

As an initial matter, the Court must attempt to situate Plaintiffs’ breach of fiduciary claim in the context of ERISA’s remedial scheme. There are two provisions of 29 U.S.C. § 1132 that authorize individual relief to participants and beneficiaries where they have suffered losses because an ERISA fiduciary has breached a fiduciary duty under the statute. First, 29 U.S.C. § 1132(a)(1)(B) “provides a remedy for breaches of fiduciary duty with respect to the interpretation of plan documents and the payment of claims.” Varity Corp. v. Howe, 516 U.S. 489, 512, 116 S.Ct. 1065, 134 L.Ed.2d 130 (1996). The Court addressed this iteration of Plaintiffs’ breach of fiduciary duty claim in section II.B.4 with respect to Plaintiffs’ claim for recovery of benefits under the Plan based on the allegedly more restrictive $30,000 aggregate and rebalancing limitations to which Plaintiff Mr. Borneman was subjected. Second, § 1132(a)(3) acts as a “catchall” provision, or a “safety net, offering appropriate equitable relief for injuries caused by violations that § 502 [§ 1132] does not elsewhere adequately remedy.” Id. at 1077-78.

The Court notes that Plaintiffs have also sought relief for breach of fiduciary duty under § 1132(a)(2), which permits a party to bring a civil action for relief under 29 U.S.C. § 1109. That section provides that a fiduciary who breaches his or her responsibilities under ERISA shall be personally liable to make the plan whole for the losses that have been caused by the breach. Plaintiffs in this action are not seeking to compel Defendants to provide any relief to the Plan; rather, Plaintiffs are seeking individual relief. Section 1109 does not provide such relief, therefore Plaintiffs have no claim under this section. Massachusetts Mutual Life Insurance Co. v. Russell, 473 U.S. 134, 144, 105 S.Ct. 3085, 87 L.Ed.2d 96 (1985) (“[T]he entire statutory text of [§ 1109] persuades us that Congress did not intend that section to authorize any relief except for the plan itself.”).

Plaintiffs have set out three theories of recovery for breach of fiduciary duty: 1) Defendant Principal failed to comply with the language of the Plan and the GAC, as well as their own $30,000 per fund limitation, in imposing the market timing trading restriction; 2) Defendant Principal made a number of material misrepresentations to Plaintiff Brian Borneman relating to market timing trading; and 3) Defendant Principal failed to provide honest and complete answers to Plaintiff Brian Borne-man’s questions, and failed to convey to him material information about the Plan.

1. Failure to com/ply with the language of the Plan, the GAC, and the $30,000 per fund limitation

The Court has already decided that the Defendants did comply with the language of the Plan and the GAC in imposing the market timing trading restriction on plan participants and beneficiaries, including Plaintiffs. Plaintiffs therefore have no claim for breach of fiduciary duty to the extent they rely on noncompliance with the language of the Plan or the GAC. Parenthetically, the Plaintiffs indicate in their brief that their claim under § 1104(a)(1)(D) includes Defendant’s failure to comply with “their own $30,000 per fund limitation.” 29 U.S.C. § 1104(a)(1)(D) indicates that a fiduciary must discharge his duties with respect to a plan “in accordance with the documents and instruments governing the plan.”

The ordinary meaning of the word ‘instrument’ is ‘[a] formal or legal document in writing, such as a contract, deed, will, bond or lease ... or [a] writing which gives formal expression to a legal act or agreement, for the purpose of creating, securing, modifying, or terminating a right.’ BLACK’S LAW DICTIONARY 801 (6th Ed.1990); see 29 U.S.C. § 1104(a)(1)(D) (fiduciary must discharge duties ‘in accordance with the documents and instruments governing the plan’).

Brown v. American Life Holdings, Inc., 190 F.3d 856, 861 (8th Cir.1999) (emphasis in original). In Brown, the Eighth Circuit went on to hold that the phrase “other instruments” in 29 U.S.C. § 1024(b)(4) included only “formal documents that establish or govern the plan.” Id. In this case, the formal legal document that authorized Defendant Principal to impose the market timing trading restriction on participants and beneficiaries of Principal’s 401(k) plan, including Plaintiffs, was the GAC. The actual $30,000 restriction was not embodied in that document; rather, that document gave Principal the right to defer or stop contributions or transfers among investment vehicles if certain criteria were met. The possibility of a limitation was first communicated by Principal in its role as investment manager to Principal in its role as plan sponsor and employer in a February 6, 2001 letter from Mark Stark to Tammy DeHaai. Around the beginning of June, 2001, a computer limitation was imposed that