Solis v. Koresko (884 F. Supp. 2d 261, 2012)

United States District Court for the Eastern District of Pennsylvania 2012-08-03

Labor

Citations

Full opinion text

MEMORANDUM

McLAUGHLIN, District Judge.

TABLE OF CONTENTS

I. Summary Judgment Standard ............................................267

II. Factual Background .....................................................268

A. The REAL VEBA Employee Benefit Arrangement.......................268

B. The Parties .........................................................269

C. The Decor Plan, the Cetylite Plan, and the Castellano Plan................270

D. The Alleged Fiduciary Violations.......................................271

III. Threshold Questions .....................................................274

A. ERISA Coverage....................................................274

B. Coverage of Fiduciary Responsibility Provisions The “Top Hat”

Exception.........................................................281

C. Fiduciary Status.....................................................284

IV. ERISA Fiduciary Duties .................................................291

A. ERISA Section 403, 29 U.S.C. § 1103...................................292

B. ERISA Section 404, 29 U.S.C. § 1104....:..............................294

C. ERISA Section 406(a)(1)(D), 29 U.S.C. § 1106(a)(1)(D)....................295

D. ERISA Section 406(b)(1), 29 U.S.C. § 1106(b)(1).........................297

V. Relief..................................................................297

This action arises out of alleged violations of fiduciary duties under the Employee Retirement Income Security Act of 1974 (“ERISA”), 29 U.S.C. § 1001 et seq., in connection with a multiple-employer employee death benefit arrangement. The Secretary of Labor (the “Secretary” or “DOL”) moves for partial summary judgment as to three purported ERISA plans (collectively, the “Plans”): the Cetylite Industries Inc. Health and Welfare Benefit Plan (the “Cetylite Plan”), the Decor Coordinates Health and Welfare Benefit Plan (the “Decor Plan”), and the Domenic Castellano D.D.S., P.A. Health and Welfare Benefit Plan (the “Castellano Plan”). The Secretary brings her motion against only some of the defendants, namely: John J. Koresko, V (“Koresko”), Jeanne Bonney, PennMont Benefit Services, Inc. (“Penn-Mont”), Koresko & Associates, P.C. (“KAPC”), and Koresko Law Firm, P.C. (“KLF”). The Court will refer to these defendants collectively as the “Koresko Defendants.” The Secretary did not move for summary judgment against defendant Farmers & Merchants Trust Company of Chambersburg (“F & M Trust”), successor by merger to Community Trust Company (“CTC”).

The Secretary argues that the Plans are employee welfare benefit plans as defined by 'ERISA; that the Plans have plan assets in the form of employer contributions, insurance policy proceeds, and earnings therefrom; that the Koresko Defendants are ERISA fiduciaries with respect to those plan assets; and that the Koresko Defendants breached several of their fiduciary duties by failing to maintain plan assets in trust and transferring assets into non-trust accounts that they themselves controlled. The Court will grant the Secretary’s motion as to defendants Koresko, Bonney, and PennMont for violations of ERISA Sections 403, 29 U.S.C. § 1103; 404(a)(1)(A), 29 U.S.C. § 1104(a)(1)(A); and 404(a)(1)(B), 29 U.S.C. § 1104(a)(1)(B) for all three Plans. The Court will grant the motion as to defendants Koresko, Bonney, and PennMont for violations of ERISA Section 406(a)(1)(D), 29 U.S.C. § 1106(a)(1)(D) as to the Cetylite Plan, and deny without prejudice as to the Decor and Castellano Plans. The Court will deny the motion without prejudice as to KAPC and KLF, and as to violations of ERISA Section 406(b)(1), 29 U.S.C. § 1106(b)(1).

I. Summary Judgment Standard

Summary judgment is appropriate if there is “no genuine dispute as to any material fact and the movant is entitled to judgment as a matter of law.” Fed. R.Civ.P. 56(a). The moving party bears the initial burden of informing the court of the basis for its motion. Celotex Corp. v. Catrett, 477 U.S. 317, 323, 106 S.Ct. 2548, 91 L.Ed.2d 265 (1986). Once a properly supported motion is made, the burden shifts to the nonmoving party to set forth specific facts showing that there is a genuine issue of material fact for trial. Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 250, 106 S.Ct. 2505, 91 L.Ed.2d 202 (1986).

A fact is “material” if it might affect the outcome of the suit under the governing law. Id. at 248, 106 S.Ct. 2505. A dispute is genuine if the evidence is such that a reasonable jury could return a verdict for the nonmoving party. Id. The court must view the facts in the light most favorable to the nonmoving party. See Sheridan v. NGK Metals Corp., 609 F.3d 239, 251 n. 12 (3d Cir.2010).

The Koresko Defendants’ response to the Secretary’s statement of undisputed facts purports to “dispute” the majority of the Secretary’s factual recitations. However, their response is replete with legal arguments, lacks citations to the record, and generally does not comply with Federal Rule of Civil Procedure 56(c)(1) or this Court’s procedures. See generally Koresko Stmt. Resp. (ECF No. 284). The Court considered properly supported facts genuinely disputed only where the Koresko Defendants provided citations to the record.

Defendant F & M Trust denied many of the Secretary’s facts under Federal Rule of Civil Procedure 56(d), which states:

If a nonmovant shows by affidavit or declaration that, for specified reasons, it cannot present facts essential to justify its opposition, the court may: (1) defer considering the motion or deny it; (2) allow time to obtain affidavits or declarations or to take discovery; or (3) issue any other appropriate order.

The Court of Appeals for the Third Circuit has interpreted this provision to require a party seeking further discovery in response to a summary judgment motion to submit an affidavit specifying what particular information is sought; how, if uncovered, it would preclude summary judgment; and why it has not previously been obtained. Pa. Dep’t of Public Welfare v. Sebelius, 674 F.3d 139, 157 (3d Cir.2012) (citing Dowling v. City of Phila., 855 F.2d 136, 139 (3d Cir.1988)). The Secretary has not moved for summary judgment against F & M Trust. The affidavit submitted by attorney Timothy J. Nieman on behalf of F & M Trust referred to documents in the DOL’s possession, but does not explain how the documents would preclude summary judgment on the legal issues relevant to F & M Trust, or why the documents were not previously obtained. Decl. of Timothy J. Nieman (EOF No. 283).

Thus, except where the defendants countered the Secretary’s factual recitation with citations to the record, the Court considered any properly supported facts undisputed for the purposes of the motion pursuant to its discretion under Federal Rule of Civil Procedure 56(e)(2). The Court now sets forth those facts.

II. Factual Background

A. The REAL VEBA Employee Benefit Arrangement

Defendant John J. Koresko (“Koresko”) and his brother, Lawrence Koresko, run a loose, unincorporated association of unrelated employers called the Regional Employers Assurance Leagues (“REAL”). The REAL offers a program of employee welfare benefits, including death benefits, to employers through the Regional Employers Assurance Leagues Voluntary Employees’ Beneficiary Association (“REAL VEBA”) Trust, a multiple employer trust. Koresko and his brother sign documents and take actions on behalf of the REAL, which is neither an actual business entity nor a corporation. Koresko also wrote the plan and trust documents for the death benefit arrangement and the REAL VEBA Trust. Koresko Dep. 85-86 (Aug. 25, 2009) (GX 10); Koresko Aff. ¶¶ 3, 4, 5 (May 4, 2004) (GX 4); Master Trust Agreement, Whereas Cl. (GX 11).

Employers execute an adoption agreement in order to join the REAL. In doing so, they indicate their agreement to adopt the REAL VEBA “Plan” and subscribe to the REAL VEBA Trust. The adoption agreement allows employers to select the type and amount of benefits offered, and to set eligibility requirements. Eligible employees of adopting employers may then sign participation agreements to participate in the benefit arrangement. See, e.g., Castellano Adoption Agreement (GX 44); Castellano Participation Agreements (GX 46).

The REAL VEBA Plan Document (“Plan Document”), which governs the benefit arrangement, states that each adopting employer “shall in a timely manner contribute to the Trustee all amounts ... necessary to provide all Benefits.” Plan Document § 4.01(a)(1) (GX 14). Employer contributions are received into the REAL VEBA Trust to be held for the benefit of all employees covered in the arrangement. The Plan Document also permits the trustee to use employer contributions to purchase insurance policies on the lives of participating employees to fund the benefits. Master Trust Agreement Whereas Cl., § 4.2 (GX 11); Plan Document § 7.05(a) (GX 14). The benefits are paid according to the terms of each employer’s Adoption Agreement and the Plan Document, and out of proceeds from these insurance contracts as well as other funds held by the trustee for the payment of benefits. Bonney Aff. ¶¶ 11, 24 (July 16, 2009) (GX 17); Plan Document §§ 5.04, 7.05(a) (GX 14).

The REAL VEBA Master Trust Agreement (“Master Trust Agreement”) provides that the plan administrator shall perform separate accounting of the balances in the entire REAL VEBA Trust allocable to employees of each adopting employer. But the agreement also states that separate accounting “shall not operate to prevent any portion of the Trust Fund from being available for the payment of any claim arising under the Plan.” Master Trust Agreement § 4.4 (GX 11). See also Cetylite Summary Plan Description 5 (GX 35) (“Under the terms of the Plan, all assets of the Trust are available to' pay all claims that are presented to the Trustee. This means that money contributed to the Plan by the Employer could be used to pay benefits of employees other than those of the Employer.”). At the same time, under the Plan Document, benefits shall not be payable to any participant or beneficiary until the amount payable under the insurance policy that funds the benefit is received by the REAL VEBA Trust. Plan Document § 7.05(g) (GX 14).

The Plan Document provides that each adopting employer shall appoint a “Committee,” which determines the beneficiaries to whom benefit payments are made, computes the amount of the benefits, and directs the trustee to pay benefits from the trust fund, among other responsibilities. However, the Plan Document also specifies that if an employer names a plan administrator in its adoption agreement, the administrator “shall assume and perform all and each and every [ ] duty and responsibility to the Committee,” and that the term “Committee” in the- Plan Document shall include the administrator. Plan Document §§ 5.05, 5.06, 6.01, 6.03 (GX 14).

B. The Parties

PennMont is a Pennsylvania corporation that performs plan administrative services for the REAL VEBA Trust, but has no employees or physical assets of its own. Its work was and is performed by employees of the Koresko law firms, Koresko & Associates, P.C. (“KAPC”), and Koresko Law Firm, P.C. (“KLF”). PennMont maintains corporate offices at the same address as KAPC and KLF, functions like a division thereof, and operates on the premises thereof. 9/9/09 Tr. of Prelim. Injunction Hr’g 39-42 (GX 7); Bonney Dep. 95-96 (Aug. 19, 2009) (GX 8); Koresko Aff. ¶¶ 13-16 (May 4, 2004) (GX 4); DOL Stmt. ¶ 5; Koresko Stmt. Resp. ¶ 5.

John Koresko, a lawyer and certified public accountant, is the president of PennMont. He is also the sole shareholder of his law firms, KAPC and KLF. Jeanne Bonney was an employee of both KAPC and KLF and served as counsel to PennMont. See Pa. Dep’t of State Filing (GX 1); Koresko Aff. ¶¶ 1, 13 (May 4, 2004) (GX 4); 9/9/09 Tr. of Prelim. Injunction Hr’g 39-10 (GX 7); Bonney Aff. ¶ 1 (July 16,2009) (GX 17).

In March 2002, Community Trust Company (“CTC”) became trustee of the REAL VEBA Trust. Subsequently, Farmers & Merchants Trust Co. of Chambersburg (“F & M Trust”) became the trustee after merging with CTC on November 30, 2008. F & M Trust remained the trustee until January 15, 2011, when Judge Jones signed an order in this case discharging F & M Trust, and permitting Penn Public Trust (“PPT”) to become the trustee. Master Trust Agreement § 1.6 (GX 11); 7/17/09 TRO Hr’g Tr. 12-13 (GX 12); ECF No. 195 ¶¶ 3-4.

John Koresko is the director, secretary-treasurer, president, and counsel of the current REAL VEBA trustee, PPT. He manages PPT and directs all of its operations. PPT has no employees of its own; employees of the Koresko law firms perform PPT’s operations. See Koresko Dep. 40-42, 45-48 (Aug. 25, 2009) (GX 10).

C. The Decor Plan, the Cetylite Plan, and the Castellano Plan

Decor Coordinates, Inc. (“Decor”), Cetylite Industries, Inc. (“Cetylite”), and Domenic M. Castellano, D.D.S., P.A. (the “Castellano Dental Practice”) are among the many employers that adopted the benefit arrangement offered by the REAL VEBA Trust, or its predecessors. Representatives from Decor, Cetylite, and the Castellano Dental Practice executed REAL VEBA adoption agreements in November 1994, December 1994, and July 1998, respectively. Decor Adoption Agreement (GX 9); Cetylite Adoption Agreement (GX 33); Castellano Adoption Agreement (GX 44).

The Adoption Agreements stated that the plan names would be the Decor Coordinates Inc. Health and Welfare Benefit Plan, the Cetylite Industries Inc. Health and Welfare Benefit Plan, and the Domenic M. Castellano, D.D.S. P.A. Health and Welfare Benefit Plan. Each agreement named PennMont as the plan administrator, provided death benefits to eligible employees, and did not require participant contributions. Each Adoption Agreement also defined the death benefit as calculated based on a set multiple of the participating employee’s salary. Decor

Adoption Agreement §§ 2(a), 2(c), 4(a), 5(c) (GX 9); Cetylite Adoption Agreement §§ 2(a), 2(c), 4(a), 5(c) (GX 33); Castellano Adoption Agreement §§ 2(a), 2(c), 4, 5(c) (GX 44).

Each employer then subsequently made contributions into the REAL VEBA Trust on behalf of its participating employees. In 1995, 2000, and 2001, Decor wrote checks in the amounts of $100,000, $80,000, and $50,000 to the then REAL VEBA Trustee “f/b/o Decor Coordinates Inc. W.B.P.” At least two Decor employees that did not own any portion of the company were listed in an inventory of insurance coverage sent from PennMont to Decor’s president, Angelo Ferraro. See Decor Checks (GX 16); Ltr. from Jeanne Bonney to Angelo Ferraro (Nov. 15, 2001) (GX 18).

Cetylite sent multiple checks from 2000 through 2003 for payment into the master trust. Approximately 30 employees participated in Cetylite’s arrangement with the REA.L VEBA Trust. Cetylite Checks (GX 37); 9/3/09 Tr. of Prelim. Injunction Hr’g 5-6 (GX 36).

PennMont acknowledged receipt of at least one contribution check from the Castellano Dental Practice and indicated that future remittances should remain payable to the then trastee of the REAL VEBA Trust, “f/b/o Domenic M. Castellano, D.D.S., PA. Welfare Benefit Plan.” Castellano Dental Practice employees Mary Lee Harper and Alison Acco each signed employee agreements to participate in the REAL VEBA Trust. Records obtained from PennMont reflect insurance policies from CNA Life for these two employees. Ltr. from Jeanne Bonney to Dr. Castellano (July 16, 1998) (GX 45); GX 46 at 1, 2, 10.

D. The Alleged Fiduciary Violations

The alleged fiduciary violations by the Koresko Defendants follow the same general pattern for each of the Plans. Life insurance policies were taken out on the lives of participating employees from Decor, Cetylite, and the Castellano Dental Practice. Following the deaths of these employees, proceeds from the insurance policies were paid to the REAL VEBA trustee, who transferred them into a business high performance money market account held by John Koresko and Jeanne Bonney.

CTC, the then-trustee of the REAL VEBA Trust, was not the account holder on these accounts. PennMont paid a certain amount of benefits to the intended beneficiary in its discretion as plan administrator. Most of the remaining policy proceeds were then transferred to the “Koresko Law Firm Death Benefit Escrow Account.” The Court outlines these actions in more detail below.

1. Insurance Proceeds Paid on the Life of Decor Employee Angelo T. Ferraro

In 1995, the United of Omaha Life Insurance Company issued a $2,500,000 life insurance policy on the life of Decor employee Angelo T. Ferraro. The insurance policy named “Commerce Bank, N.A., Trustee for Decor Coordinates, Inc. W.B.P.” as the beneficiary and “Commerce Bank, N.A., Trustee” as the owner, with a listed address of “c/o Penn-Mont Benefit Svc.” In 1997, policy ownership was assigned to “Corestates Bank, N.A., Trustee f/b/o Decor Coordinates W.B.P.,” which also became the new beneficiary. United of Omaha Pol’y (GX 20).

In 2001, Mr. Ferraro signed a beneficiary nomination form naming “The Trustee of the Ferraro Family Trust Dated April 26, 2001” as the beneficiary of any death benefits payable as a result of his participation in the Decor Plan. In January 2002, Mr. Ferraro died. After Mr. Ferraro’s death, the Ferraro Family Trust submitted a REAL VEBA death benefit claim form to PennMont. Ferraro Beneficiary Nomination Form (GX 19); Ferraro Death Benefit Claim Form (GX 21).

On or about May 8, 2002, United of Omaha issued a check payable to “Community Trust Comp., Trustee” in the amount of $2,515,890.41, representing the proceeds from the policy that insured Mr. Ferraro. Later that month, PennMont deposited this check into a Commerce Bank account named the “Commerce Bank FBO REAL VEBA Trust, Community Trust Company Trustee,” with Account No. Xxxxxxl638 (“CTC Trust Account”). DOL Stmt. ¶¶ 20, 21; Koresko Stmt. Resp. ¶¶ 20, 21; United of Omaha Check (GX 22); PennMont Record and Deposit Ticket (GX 23).

In November 2002, Koresko and Bonney opened a new business high performing money market account, No. Xxxxxxxxx5890, with First Union National Bank (“Ferraro FUNB Account”). The account application listed Koresko and Bonney as trustees and authorized signatories. The account holders for the Ferraro FUNB Account were “Ferraro Death Benefit Trust,” “John J. Koresko Trustee” and “Jeanne D. Bonney Trustee.” Account Application (GX 24); FUNB Account Statement (GX 25).

The Ferraro FUNB Account bank statement reflects that on or about November 14, 2002, CTC transferred $2,513,194.58 from Commerce Bank to the Ferraro FUNB Account. The bank statement recording this transfer referenced “EMPL DECOR COOR.” FUNB Account Statement (GX 25). On or about November 18, 2002, shortly after opening the Ferraro FUNB Account, Jeanne Bonney issued a check in the amount of $2,027,723.94 from the Ferraro FUNB Account to the “Ferraro Family Trust dated 4/26/01.” Bonney mailed the check to counsel for Mr. Ferraro’s family. Ferraro Death Benefit Claim Form (GX 21); Ltr. and Check from Jeanne Bonney to Phillip Forbes (GX 26). On December 31, 2004, Koresko signed a check from the Ferraro FUNB Account for $494,166.53, payable to “Koresko Law Firm-Death Benefit Escrow Account.” The cancelled check bears the endorsement “For Deposit Only xxxxx6507 Koresko Law Firm.” GX 28.

Two more checks issued from the Ferraro FUNB Account: (1) a check for $1,213.35 to the U.S. Treasury dated April 14, 2004, and (2) a check for $3,041.48 to “Commerce Bank” dated March 10, 2006, which endorsement stated “xxxxx8992.” At the time, Koresko and Bonney held a bank account in the name of “Angermeier Death Benefit Trust” with the account number xxxxx8992 (hereinafter the “Angermeier Account”). A Ferraro FUNB Account statement covering the period April 29, 2006 through May 31, 2006 showed a balance of zero dollars. GX 29; GX 30; GX 31; Account Statement (GX 32).

2. Insurance Proceeds Paid on the Life of Cetylite Employee Dale A. Kelling

In 1995, the First Colony Life Insurance Company issued a $1,020,000 life insurance policy on the life of Cetylite employee Dale A. Kelling. The policy named “Trustee of the DE Valley League of Manufacturers Trust Under Trust Agreement dated 9/1/92” as the owner and beneficiary of the policy. In 1997, policy ownership was changed to “Corestates Bank, N.A., Trustee c/o Penn-Mont Benefit Services,” which also became the new beneficiary. First Colony Pol’y (GX 38).

In 1995, Mr. Kelling executed a beneficiary nomination form naming his wife, Linda Kelling, as the beneficiary of any death benefits payable from his participation in the Cetylite Plan. Mr. Kelling died in June 2003; After Mr. Kelling’s death, his wife submitted a REAL VEBA death benefit claim form to PennMont. Kelling Beneficiary Nomination Form (GX 39); Kelling Death Benefit Claim Form (GX 40).

In August 2003, First Colony Life Insurance Company wrote a check for $1,027,374.00, payable to the “Regional Employers Assurnce League Trst [sic] DTD 3/20/95 RESTATED 3/18/02.” Shortly afterwards, PennMont employee Maggie Carroll submitted a premium payment request to the then REAL VEBA trustee: “Please cause the REAL VEBA Trustee to prepare payment as follows: ... Kelling Family Death Benefit Trust $1,027,374.00.” The payment request directed payment to be sent to PennMont’s offices. GX 41; REAL VEBA Premium Payment Request (GX 42 at 6); GX 43.

A business high performance money market account with account number xxxxxxxxl675 was opened at Wachovia Bank, N.A., in the name of the “Kellig Gamily [sic] Death Benefit Trust” (hereinafter the “Wachovia Kelling Account”). Koresko and Bonney were listed as account holders and trustees. GX 42 at 8. On September 8, 2003, CTC, the REAL VEBA Trust trustee, issued a cheek in the amount of $1,027,374.00 payable to “Kelling Family Death Benefit Trust.” The check was deposited into the Wachovia Kelling Account held by Koresko and Bonney. See GX 42 at 4, 8.

On October 24, 2003, Jeanne Bonney sent a letter to Linda Kelling, attaching a check from the Wachovia Kelling Account for $812,681.70, payable to Linda Kelling. GX 42 at 9-10. On December 31, 2004, Koresko signed a check drawn on the Wachovia Kelling Account for $216,115.61 payable to “Koresko Law Firm-Death Benefit Escrow Account.” The cancelled check bears the endorsement: “For Deposit Only xxxxxx6507 Koresko Law Firm.” GX 42 at 13.

Two more checks issued from the Wachovia Kelling Account: (1) a check for $236.18 to the U.S. Treasury, and (2) a check for $2,786.87 to “Commerce Bank,” which endorsement indicated deposit to account number “xxxxx8992.” The -8992 account number corresponded to that of the aforementioned Angermeier Account held by Koresko and Bonney. A Wachovia Kelling Account bank statement covering the period March 1, 2006 through March 31, 2006 showed a balance of zero dollars by the end of the period. GX 31; GX 42 at 16,19, 20.

3. Insurance Proceeds Paid on the Life of Castellano Dental Practice Employee Domenic M. Castellano

In 1995, Dr. Domenic M. Castellano, an employee of the Castellano Dental Practice, applied for a $750,000 life insurance policy from Chubb Life Insurance Company. The application named “Corestates Bank, N.A., Trustee ifb/o Dominic Castellano, D.D.S., W.B.P.” as owner and beneficiary of the policy, with “PennMont Benefit Sves.” listed under owner address. The insurance company-subsequently renamed Jefferson Pilot Financial Insurance Company-issued the applied-for policy on Dr. Castellano’s life in 1997. Castellano Application (GX 47); Jefferson Pilot Pol’y (GX 48).

Dr. Castellano executed a beneficiary nomination form naming his spouse, Gretchen Hutto Castellano, as the beneficiary of any death benefits payable from his participation in the Castellano Plan. Following the death of Dr. Castellano, a dispute developed between PennMont and Mrs. Gretchen Castellano regarding the payment of her benefit claim, which ultimately resulted in a lawsuit pending in this Court. Castellano Beneficiary Nomination (GX 49); REAL VEBA et al. v. Castellano, Case No. 2:03-cv-06903-MAM.

Koresko and Bonney opened a new business high performance money market account at Wachovia Bank in the name of “Castellano Death Benefit Trust” and with the account number xxxxxxxxx9604 (the ‘Wachovia Castellano Account”). The deposit account application lists Koresko and Bonney as trustees and authorized signatories. GX 50.

On July 9, 2003, the Jefferson Pilot Financial Insurance Company issued a check for $751,266.18 to the order of “REAL VEBA TRUST DTD 3/20/95, Jeanne Bonney as Trustee.” The check indicated that it related to “Insured: Domenic M. Castellaño.” The endorsement on the cancelled check indicates that the check was deposited into the Wachovia Castellano Account. GX 51.

On July 21, 2003, $751,266.18 was transferred from the Wachovia Castellano Account to the CTC Trust Account. The same amount was then redeposited back to the Wachovia Castellano Account the following day by CTC. GX 52; GX 53.

Subsequently, Koresko signed a check from the Wachovia Castellano Account for $759,112.98, payable to “Koresko Law Firm — Death Benefit Escrow Account.” That check was negotiated and the endorsement on the check states “For Deposit Only xxxxx6507 Koresko Law Firm.” GX 54. Two more checks issued from the Wachovia Castellano Account: (1) a check for $189.02 to the U.S. Treasury, and (2) a check for $3,318.72 to “Commerce Bank,” which endorsement indicated deposit to account number “xxxxx8992.” The -8992 account number corresponded to that of the aforementioned Angermeier Account held by Koresko and Bonney. GX 31; GX 55.

III. Threshold Questions

“ERISA is a comprehensive statute designed to promote the interests of employees and their beneficiaries in employee benefit plans.” Edwards v. A.H. Cornell & Son, Inc., 610 F.3d 217, 220 (3d Cir. 2010) (citing Shaw v. Delta Air Lines, Inc., 463 U.S. 85, 90, 103 S.Ct. 2890, 77 L.Ed.2d 490 (1983)). Title I of ERISA covers “employee benefit plan[s],” of which there are two types: employee pension benefit plans or employee welfare benefit plans (hereinafter “EWBPs”). ERISA Section 3(3), 29 U.S.C. § 1002(3); ERISA Section 4(a), 29 U.S.C. §' 1003(a).

ERISA imposes strict participation, vesting, and funding requirements for pension plans, but exempts welfare plans from those regulations. ERISA Section 201, 29 U.S.C. § 1051 (excepting welfare plans from provisions dealing with participation and vesting); ERISA Section 301, 29 U.S.C. § 1081 (excepting welfare plans from provisions dealing with funding). However, both pension and welfare plans are generally subject to ERISA’s uniform rules concerning reporting, disclosure, and fiduciary responsibility. Edwards, 610 F.3d at 220; Deibler v. Local Union 23, 973 F.2d 206, 209 (3d Cir.1992).

The Secretary’s motion presents two threshold questions: (1) First, whether and to what extent ERISA covers the REAL VEBA or the Plans at issue; and (2) Second, whether ERISA’s fiduciary responsibility provisions apply and, if so, what fiduciary duties the Koresko Defendants had with respect to the Plans. The Court considers each question below.

A. ERISA Coverage

The Court finds that the master REAL VEBA Trust is not an employee welfare benefit plan (“EWBP”) as defined in ERISA, but that the Cetylite, Decor, and Castellano Plans are.

ERISA defines an EWBP as: (1) any “plan, fund, or program” (2) “established or maintained” (3) by an “employer or by an employee organization, or by both” (4) for the purpose of providing various benefits, including death benefits (5) for its participants or their beneficiaries. ERISA Section 3(1), 29 U.S.C. § 1002(1). The Court understands the parties’ dispute to center around the first two elements-that is, whether Cetylite, Decor, and the Castellano Dental Practice “established or maintained” a “plan, fund, or program.”

ERISA does not define “plan, fund, or program.” Whether a plan exists within the meaning of ERISA is “a question of fact, to be answered in light of all the surrounding facts and circumstances from the point of view of a reasonable person.” Deibler v. Local Union 23, 973 F.2d 206, 209 (3d Cir.1992) (citing Wickman v. Nw. Nat’l Ins. Co., 908 F.2d 1077, 1082 (1st Cir.1990)). The prevailing standard for determining the existence of a plan was set forth by the Eleventh Circuit in Donovan v. Dillingham, 688 F.2d 1367 (11th Cir.1982). The Donovan standard, since applied by the Third Circuit, provides that an ERISA plan exists if “from the surrounding circumstances a reasonable person can ascertain the intended benefits, a class of beneficiaries, the source of financing, and procedures for receiving benefits.” Gruber v. Hubbard Bert Karle Weber, Inc., 159 F.3d 780, 789 (3d Cir. 1998) (emphasis added) (citing Deibler v. Local Union 23, 973 F.2d 206, 209 (3d Cir.1992)).

The “established or maintained” element seeks to ascertain whether the plan is part of an employment relationship by looking at the degree of participation by the employer in the establishment or maintenance of the plan. See Peckham v. Gem State Mut., 964 F.2d 1043, 1049 (10th Cir. 1992). “[N]o single act in itself necessarily constitutes the establishment of the plan, fund or program.” Donovan v. Dillingham, 688 F.2d 1367, 1373 (11th Cir.1982). The decision to extend benefits, for exam-pie, is not itself the establishment of a plan or program. See id. at 1373.

Nevertheless, “[a]n employer ... can establish an ERISA plan rather easily.” Gruber, 159 F.3d at 789 (citation omitted). An employer’s payment of insurance premiums is substantial evidence of the existence of an ERISA-covered plan. See id. (citing Robinson v. Linomaz, 58 F.3d 365, 368 (8th Cir.1995)). The Third Circuit has also stated that the crucial factor in determining whether a plan has been established or maintained is whether the employer expressed an intention to provide benefits on a regular and long-term basis, and that it does not matter whether the employer did so by purchasing insurance or by subscribing to a multiple employer trust. Deibler, 973 F.2d at 209; Gruber, 159 F.3d at 789.

1. The REAL VEBA Trust

It is undisputed that the REAL VEBA Trust-that is, the master multiple employer trust into which all the employer contributions are deposited-is not itself an employee welfare benefit plan as defined in ERISA. The Third Circuit has- held that there are two broad requirements for a multiple employer plan to constitute an EWBP. Gruber, 159 F.3d at 787. First, the group of employers that establishes and maintains the plan must be a “bona fide” association of employers tied by a common economic or representation interest, unrelated to the provision of benefits. Second, the employer-members of the organization that sponsors the plan must exercise control, either directly or indirectly, both in form and in substance, over the plan. Id.

At the very least, the employer members of the REAL lack commonality of interest apart from the provision of benefits to their employees. Thus, under Third Circuit case law, the REAL YEBA Trust is not an ERISA-covered EWBP.

2. Single-Employer EWBPs

Nevertheless, the Secretary has established that the Cetylite, Decor, and Castellano Plans are single-employer EWBPs covered by ERISA. In Gruber, the Court of Appeals for the Third Circuit recognized that individual employer members of a program sponsored by an association that is not itself an “employer” or “employee organization” may yet establish a single employer welfare benefit plan covered by ERISA. See 159 F.3d at 786, 787, 789-90. This view is consistent with prior Department of Labor advisory opinions. See, e.g., DOL Advisory Op. No. 96-25A, 1996 WL 634362, at *3 (Oct. 31, 1996); DOL Advisory Op. No. 82-57A, 1982 WL 21240, at *2 (Nov. 2, 1982).

The Cetylite, Decor, and Castellano Plans qualify as “plans, funds, or programs” under the Donovan criteria. First, a reasonable person would determine that the intended benefits are death benefits, and that the class of beneficiaries includes each eligible employees of the employers that sign participation agreements. Second, a reasonable person would determine that the financing for the Plans comes from the REAL VEBA Trust, as reinsured through the purchase of life insurance policies on the lives of participating employees. Lastly, a reasonable person would determine that to receive benefits, beneficiaries must apply to the plan administrator, PennMont, upon the death of the insured.

That the Plans are ERISA EWBPs finds further support in Gruber’s instruction that an employer’s payment of insurance premiums is substantial evidence of the existence of an ERISA-covered plan. See Gruber, 159 F.3d at 789; see also Sipma v. Mass. Cas. Ins. Co., 256 F.3d 1006, 1012 (10th Cir.2001) (payment of premiums is substantial evidence that a plan has been established). The facts set forth above show that Decor, Cetylite, and the Castellano Dental Practice each made monetary contributions on behalf of their employees to the REAL VEBA Trust, and that some or all of those contributions were used to purchase life insurance policies on the lives of participating employees that then funded the death benefits. This fact is substantial evidence that these three employers established or maintained EWBPs covered by ERISA.

It is important to note that the Gruber court rejected the argument that the employers were not paying insurance premiums because they were not paying money directly to an insurer. In Gruber, individual employers made contributions to a trustee account, and a trustee then disbursed the pooled contributions to pay eligible medical expenses pursuant to the trust documents. 159 F.3d at 789. In this case, the organizational structure contains one additional level of complexity. Instead of paying benefits directly from contributions pooled from multiple employers, the REAL VEBA trustee reinsures the trust’s obligations by using employer contributions to purchase life insurance policies on the lives of participating employees that name the REAL VEBA trustee as the beneficiary. When the employee dies, the insurance company pays the REAL VEBA trustee, and death benefits may then be paid out to the participants’ beneficiaries in accordance with the Plan Document. The additional layer of complexity in the REAL VEBA benefit arrangement does not strike the Court as changing the crucial factor in the Gruber analysis — that is, whether the employers expressed an intention to provide benefits on a regular and long-term basis. Cf. Ed Miniat, Inc. v. Globe Life Ins. Grp., Inc., 805 F.2d 732 (7th Cir.1986). It merely alters the risk profile for the funding trust.

Finally, the Court notes that its conclusion — at least with respect to the Cetylite Plan-is consistent with and supported by the Summary Plan Description that was made available to the employee participants. The Cetylite Summary Plan Description flatly states that the Cetylite Plan “is covered by the Employee Retirement Income Security Act of 1974 (‘ERISA’) which was designed to protect employees’ rights under benefit plans.” Cetylite Summary Plan Description § 13 (GX 35). The document then explains that ERISA imposes duties upon people who are responsible for operations of the plan, and that these fiduciaries have a duty to act in the best interest of participants and their beneficiaries. Id. Although statements in summary documents do not constitute the terms of an ERISA plan, here they provide evidence of the plan’s existence and its coverage under ERISA. See Wickman v. Nw. Nat’l Ins. Co., 908 F.2d 1077, 1083 (1st Cir.1990) (distribution of a handbook containing a listing of ERISA rights and summary plan description is “strong evidence that the employer has adopted an ERISA regulated plan”).

The Koresko Defendants contend that fact issues regarding whether employers engaged in administrative activities preclude summary judgment. See Koresko Opp. 22-24. They rely mainly on two cases in support of their argument. Neither controls the outcome here.

The Koresko Defendants cite a Fifth Circuit case that states that ERISA does not regulate “bare purchases of ... insurance where ... the purchasing employer neither directly nor indirectly owns, controls, administers or assumes responsibility for the policy or its benefits.” Taggart Corp. v. Life & Health Benefits Admin., Inc., 617 F.2d 1208 (5th Cir.1980). First, the Eleventh Circuit in Donovan expressly rejected the implication from Taggart that an employer that only purchases insurance or subscribes to a multiple employer trust cannot be said to have established an EWBP. See Donovan, 688 F.2d at 1375. The Third Circuit applies the Donovan standard of what constitutes a “plan.” See Deibler, 973 F.2d at 209; Gruber, 159 F.3d at 789. Second, although the Fifth Circuit did not itself reject the holding of Taggart outright, it later agreed with Don ovan that while the purchase of insurance does not conclusively establish a plan under ERISA, it is substantial evidence of the establishment of one. See Mem. Hosp. Sys. v. Northbrook Life Ins. Co., 904 F.2d 236, 242-43 (5th Cir.1990).

The Koresko Defendants also rely on Fort Halifax Packing Co. v. Coyne, 482 U.S. 1,107 S.Ct. 2211, 96 L.Ed.2d 1 (1987), for the proposition that ERISA is not implicated when an employer’s obligation to pay a benefit is predicated on the occurrence of a single contingency that may never materialize. The issue in Fort Halifax was whether ERISA preempted a Maine statute requiring employers to provide a one-time severance payment to employees in the event of a plant closing. The Supreme Court held that the Maine statute was not preempted because it did not establish or require employers to establish an employee benefit 'plan. The Fort Halifax Court reasoned that there was no employee benefit plan because the employer:

assumes no responsibility to pay benefits on a regular basis, and thus faces no periodic demands on its assets that create a need for financial coordination and control. Rather, the employer’s obligation is predicated on the occurrence of a single contingency that may never materialize .... The theoretical possibility of a onetime obligation in the future simply creates no need for an ongoing administrative program for processing claims and paying benefits.

Id. at 12,107 S.Ct. 2211.

First, Fort Halifax itself recognizes that arrangements to provide death benefits can qualify as ERISA plans because “[wjhile death benefits may represent a one-time payment from the perspective of the beneficiaries, the employer clearly foresees the need to make regular payments to survivors on an ongoing basis.” Id. at 14,107 S.Ct. 2211.

- Second, Koresko interprets Fort Halifax too broadly. This Court does not read Fort Halifax to stand for the proposition that the employer itself must be the one responsible for the ongoing administrative program in order to establish an employee benefit plan. The lack of employer involvement in ongoing administration does not establish the absence of an ERISA plan. See, e.g., Randol v. MidWest Nat’l Life Ins. Co., 987 F.2d 1547, 1550 n. 5 (11th Cir.1993) (stating that there is no requirement that the employer play any role in administering the plan in order for it to be an ERISA EWBP); Custer v. Pan Am. Life Ins. Co., 12 F.3d 410, 417-18 (4th Cir.1993) (finding an ERISA plan where company obtained group insurance policy, determined the benefits to be provided, negotiated policy terms, and paid for half of the costs, but was not otherwise involved in plan administration); Brundage-Peterson v. Compcare Health Servs. Ins. Corp., 877 F.2d 509, 509-10 (7th Cir.1989) (finding that a “barebones plan” was an ERISA plan where employer contracted with two insurance companies to insure the employer’s employees and paid the employees’ share of insurance premiums). This reading of Fort Halifax accords with the statutory definition of an EWBP, which uses the disjunctive “established or maintained” and does not include any requirement that the employer administer or control the plan, fund, or program. ERISA Section 3(1), 29 U.S.C. § 1002(1) (emphasis added). Thus, Fort Halifax does not exclude from ERISA coverage an arrangement where, as here, employers face periodic demands on their assets in the form of employer contributions, but designate responsibilities and pay fees to an administrator, PennMont, to handle the processing of claims and payment of death benefits.

Defendant F & M Trust raises one last argument: that section 10.19 of the Plan Document raises a genuine issue of material fact as to whether Cetylite, Decor, and the Castellano Dental Practice created their own individual plans. F & M Opp. 18-19. That provision states:

The execution of an Adoption Agreement by a Participating Employer shall not give rise to the creation of a new Plan, but shall be construed as merely the adoption of a separate benefit structure under the League’s Plan....

Plan Document § 10.19 (GX 14) (emphasis added). However, that provision does not appear to be referring to a “plan” for the purposes of ERISA. Rather, the context of the provision suggests that the language refers to the Internal Revenue Code and accompanying regulations. Because whether a plan is a single plan for tax purposes has no bearing on whether the employers formed an EWBP for the purposes of ERISA, the provision does not suffice to raise a genuine issue of material fact about whether the Plans are EWBPs under ERISA.

In sum, the Court finds that Cetylite, Decor, and the Castellano Dental Practice each established or maintained a plan, fund, or program under the prevailing Donovan criteria.

3. Non-Owner Employees

Federal regulations contain one additional requirement for a plan to be an “employee benefit plan” covered by Title I of ERISA. Under 29 C.F.R. § 2510.3-3(b), the term “employee benefit plan” does not include any plan, fund or program, under which no employees are participants. The regulation states that “[a]n individual and his or her spouse shall not be deemed to be employees with respect to a trade or business ... which is wholly owned by the individual or by the individual and his or her spouse.” 29 C.F.R. § 2510.3-3(c). In other words, to be an EWBP covered by Title I of ERISA, the Plans must have at least one participant in the plan other than the owner or her spouse — that is, at least one “non-owner employee” (“NOE”). Yates v. Hendon, 541 U.S. 1, 21, 124 S.Ct. 1330, 158 L.Ed.2d 40 (2004).

There is undisputed record evidence that each of the Plans at issue originally involved at least one participating non-owner employee. Among the participants in the Decor Plan were Joseph Ferraro and Bruce Hall, who had life insurance policies for $520,000 and $604,500, respectively. The Cetylite Plan covered approximately thirty employees. Employees Mary Harper and Alison Acco signed participation agreements for the Castellano Plan in 1998 and 2001, respectively. See 11/15/01 Ltr. from Jeanne Bonney to Angelo Ferraro, attachments (GX 18); Tr. of Prelim. Injunction Hr’g 5 (Sep’t 3, 2009) (GX 36); Employee Participation Agreements (GX 46).

The Koresko Defendants argue that a purported July 29, 2009 Amendment executed by PennMont excluded any NOEs from the Plans. That amendment states:

No benefits shall be paid to or on account of any claimant, person, participant, or former participant ... classified as a non-owner-employee, or to any beneficiary of any such NOE.

July 2009 Amendment, Part III (DX 1). According to the Koresko Defendants, because the Plans no longer have any NOEs, they cannot be ERISA plans by operation of 29 C.F.R. § 2510.3 — 3(b), even if they were previously ERISA plans. Koresko Opp. 17. The Court agrees with the Secretary that the purported July 29, 2009 Amendment was not valid under the terms of the REAL VEBA Plan Document, for two reasons.

First, it appears that PennMont did not have authority to amend the plan. ERISA Section 402(b)(3), 29 U.S.C. § 1102(b)(3), states that every employee benefit plan shall “provide a procedure for amending such plan, and for identifying the persons who have authority to amend the plan.” Section 9.03 of the REAL VEBA Plan Document governs the procedure for amendments to the Plan, and sets forth the actors with authority to amend . the plan. It provides that employers have the right to “amend the Benefit structures in this Plan” and that u[t]he League shall have the right to amend this Plan, in its sole discretion, from time to time.... Such amendments shall be set forth in an instrument in writing executed by the amending party. An amendment may be current, retroactive or prospective.” Plan Document §§ 9.03(b), (c) (GX 14) (emphasis added). “The League” is not a defined term in the Plan Document, but it is used elsewhere in the Plan Document to refer to the REAL (the unincorporated association of employers run by John Koresko and his brother).

The purported July 29, 2009 Amendment was not signed by the REAL, but rather by PennMont, the plan administrator, through Koresko’s brother. The signature page states that PennMont executed the amendment, and the signature line reads “Larry Koresko, Vice President.” July 2009 Amendment (DX 1). John Koresko himself also signed the amendment:

AS ATTORNEY IN FACT FOR ALL PARTICIPATING EMPLOYERS BY: John Koresko, V, President, PennMont Benefit Services, Inc.

Id. There is a signature line for trustee F & M Trust (the successor to CTC) for “acknowledgment,” but it is unsigned. Id.

The Koresko Defendants have not pointed the Court to anything in the Plan Document giving the plan administrator authority to amend the plan, or defining the “League” as the “Administrator.” Nor do they assert that John Koresko signed the amendment under the employers’ authority to amend the benefit structures of the Plans.

Section 6.03 of the Plan Document does permit the “Committee” to “make any amendments to the Plan (except with respect to contribution rates) where necessary to meet the requirements of law or to protect the interests of the Participants.” Plan Document § 6.03(h) (GX 14) (emphasis added). As a reminder, the Plan Document basically equates the “Committee” with the plan administrator when, as here, a plan administrator has been named. Id. § 6.03. However, the Koresko Defendants have not argued that authority for Penn-Mont to amend stemmed from this provision. Nor have they contended that the July amendment was necessary to meet the requirements of law or to protect the interests of the participants.

In any case, the amendment is invalid for a second reason: the Plan Document limits the amendments that can be made by specifying that “no amendment shall ... [c]reate or effect any discrimination in favor of Participants who are highly compensated, who are officers or [sic] the Employer, or who are stockholders of -the Employer.” Id. § 9.03(c)(3); cf. id. § 3.01(b)(1) (“This Plan does not permit any condition for Eligibility which would limit eligibility or benefits to officers, shareholders, or highly compensated Employees.”). Eliminating non-owner employees from the arrangement all together violates that prohibition.

In other words, even if John Koresko or PennMont had authority to amend the Plan Document, the Plan Document specifically prohibits amendments that create discrimination in favor of highly compensated employees, or officers or stockholders. Therefore, the provision eliminating NOEs from plan coverage flatly violates the Plan Document and is invalid.

Lastly, as a policy matter, it would be wholly contrary to the purposes of ERISA if ERISA-covered employee benefit plans could avoid subsequent enforcement of ERISA provisions that once applied by simply eliminating ERISA coverage by amendment. Thus, the Court concludes that the employer-level Cetylite, Decor, and Castellano Plans are ERISA EWBPs because the July 29, 2009 purported amendment eliminating coverage for non-owner employees was invalid.

B. Coverage of Fiduciary Responsibility Provisions: The “Top Hat” Exception

ERISA’s provisions regulating fiduciary responsibility are located in Part 4 of Subtitle B of Title I. ERISA Section 401, 29 U.S.C. § 1101, provides that these fiduciary responsibility provisions apply to any employee pension or welfare benefit plan, but with two exceptions. The Koresko Defendants argue that one of these exceptions, the so-called “top hat” exception, applies and exempts the Plans from ERISA fiduciary responsibility provisions all together.

Top hat plans are (1) “unfunded” and (2) “maintained by an employer primarily for the purpose of providing deferred compensation for a select group of management or highly compensated employees.” ERISA Section 401, 29 U.S.C. § 1101(a)(1). Top hat plans are subject to ERISA’s administrative and enforcement provisions, but not to substantive provisions that impose fiduciary duties. In re IT Grp., Inc., 448 F.3d 661, 664 (3d Cir. 2006); Kemmerer v. ICI Ams. Inc., 70 F.3d 281, 286 (3d Cir.1995) (“Top hat plans ... which benefit only highly compensated executives, and largely exist as devices to defer taxes, do not require such scrutiny and are exempted from much of ERISA’s regulatory scheme.”). As a result, there is no cause of action under ERISA for breach of fiduciary duty involving a top hat plan. Goldstein v. Johnson & Johnson, 251 F.3d 433, 443 (3d Cir.2001).

Although the Third Circuit has not itself addressed the issue, most other courts have held that the burden of establishing the existence of a top hat plan rests on the party asserting that it is a top hat plan. See, e.g., MacDonald v. Summit Orthopedics, Ltd., 681 F.Supp.2d 1019, 1023 (D.Minn.2010); In re New Century Holdings, Inc., 387 B.R. 95, 110 (Bankr. D.Del.2008); Alexander v. Brigham & Women’s Physicians Org., Inc., 467 F.Supp.2d 136, 142 (D.Mass.2006), aff'd, 513 F.3d 37 (1st Cir.2008); In re IT Grp., Inc., 305 B.R. 402, 407 (Bankr.D.Del.2004), order aff'd by In re IT Grp., Inc., 448 F.3d 661 (3d Cir.2006).

The Court need not decide whether the Plans were maintained primarily for the purpose of providing deferred compensation for a select group of management or highly compensated employees because the Court finds that the Plans were funded.

The Court of Appeals for the Third Circuit recently set forth the two key factors in determining whether a plan is “funded” or “unfunded” under ERISA:

(1) whether beneficiaries of the plan can look to a res separate from the general assets of the corporation to satisfy their claims;

(2) whether beneficiaries of the plan have a legal right greater than that of general, unsecured creditors to the assets of the corporation or to some specific subset of corporate assets.

In re IT Grp., Inc., 448 F.3d 661, 669 (3d Cir.2006). The two factors essentially examine “two sides of the same coin.” Id. at 667.

In IT Group, the employer agreed to establish a separate trust in connection with a deferred compensation plan, and to transfer over to the trust such assets for the plan as it determined in its discretion to be appropriate. In actuality, no funds were deposited into the trust. Id. at 665-66, 669. The plan and trust documents explicitly stated that the “Plan constitutes an unfunded plan” and that the establishment of the separate trust would not affect the status of the plan as unfunded. In particular, the trust document explained that assets contributed to the trust were held subject to the claims of the employer’s creditors in the event of insolvency. Id. at 665-66. The Third Circuit held that even if funds had actually been deposited into the segregated trust, the plan was unfunded. The separate trust set up by the employer in IT Group was essentially a “rabbi trust,” an irrevocable trust in which funds are held out of reach of the employer and separate from the employer’s other assets, but subject to the claims of employer’s creditors in the event of insolvency. Id. at 665.

Here, the REAL VEBA Trust assets are separate and set aside from the general assets of the adopting employers. But unlike in IT Group, there is ho indication that the REAL VEBA Trust is a rabbi trust. The Koresko Defendants have not pointed to any plan or trust provision rendering REAL VEBA Trust assets vulnerable to the claims of the creditors of adopting employers in the event of employer insolvency.

The Koresko Defendants counter that the death benefits promised to the beneficiaries are uncertain and unvested, and that the beneficiaries therefore have no legal right greater than that of general unsecured creditors to the assets of the REAL VEBA Trust. In support, they cite plan provisions that confer absolute discretion on the plan administrator to designate the beneficiary to whom payment shall be made, the amount of payment, and that permit the trustee to pay benefits out of either insurance contracts or other funds held by the trustee. Plan Document §§ 5.04, 5.06(b), 6.03 (GX 14).

But whether the benefits are vested is not the relevant inquiry under In re IT Group. Again, the inquiry is whether there are funds separate from the general assets of the corporation-that is, the employer-for the payment of plan benefits, and whether the beneficiaries have a legal right greater than that of the employer’s general unsecured creditors to those assets. 448 F.3d at 667, 669. Here, the corpus of the REAL VEBA Trust is the res separate from the general assets of the employer that beneficiaries look toward to satisfy their claims. The provisions cited by the Koresko Defendants have no bearing on whether creditors of adopting employers can reach the assets of the REAL VEBA Trust in the event of the employers’ insolvency. The fact that the plan administrator has discretion to designate the beneficiary and determine the amount and source of benefit payments is irrelevant to the funding inquiry.

The Court’s conclusion that the Plans are funded is bolstered by various provisions in the governing documents. For example, the Plan Document states:

[N]o benefit which is funded or intended to be funded by a policy or Contract shall be payable to any Participant or Beneficiary unless or until amount the [sic] payable under such policy or Contract is received by the Trust. For purposes of this Plan and the Trust, all benefits shall be deemed intended to be funded, by a policy or Contract unless the Employer shall notify the Administrator or Trustee in writing of its election to the contrary.

Plan Document § 7.05(g) (GX 14) (emphasis added). Furthermore, section 6.09 of the Plan Document states:

Funding Policy and Procedures — The Employer and named Fiduciaries shall formulate policies, practices and procedures to carry out the funding of the Plan.... [They] shall from time to time accomplish the following:

(c) Determine and project Benefit liabilities;

(d) Make plans to satisfy the liquidity needs of the Plan

(e) Consult with the Plan Actuary ... or such other advisors as may be necessary, to maintain minimum funding standards and assure the payment of Plan Benefits.

Plan Document § 6.09 (GX 14) (emphasis added). The insurance policies that finance the benefits are owned by the REAL VEBA trustee, and thus are not merely general assets of the employer. Id. §§ 7.05(a), (f).

Thus, the Court concludes that the Plans were not “unfunded” top hat plans exempt from ERISA’s fiduciary responsibility provisions. Because the fiduciary responsibility provisions apply to these Plans, the Court proceeds to analyze whether the Koresko Defendants are fiduciaries with respect to the Plans.

C. Fiduciary Status

1. ERISA Fiduciaries

ERISA defines “fiduciary” not in terms of formal trusteeship, but in functional terms of control and authority over the plan. Srein v. Frankford Trust Co., 323 F.3d 214, 220 (3d Cir.2003). Under ERISA, even if a person is not named as a fiduciary in plan documents, he or she may still be a fiduciary with respect to a plan to the extent:

(i) 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,

(iii) he has any discretionary authority or discretionary responsibility in the administration of such plan.

ERISA Section 3(21)(A), 29 U.S.C. § 1002(21)(A) (emphasis added). The statutory definition thus requires that a fiduciary “must be someone acting in the capacity of manager, administrator, or financial ad-visor to a plan.” Pegram v. Herdrich, 530 U.S. 211, 222, 120 S.Ct. 2143, 147 L.Ed.2d 164 (2000) (internal quotations omitted); Bd. of Trustees of Bricklayers and Allied Craftsmen Local 6 of N.J. Welfare Fund v. Wettlin Assocs., Inc., 237 F.3d 270, 272 (3d Cir.2001).

Discretion is a prerequisite to fiduciary status for a person generally managing an ERISA plan under the first clause of subsection (i) or administrating a plan under subsection (iii). However, under the second clause of subsection (i), any control over the disposition of “plan assets” makes the person who has such control a fiduciary. In other words, for those who manage plan assets, control over such assets — even without discretion — is sufficient to confer fiduciary status. Bricklayers, 237 F.3d at 273. The statute recognizes the high standard that trust law imposes on those who handle money or assets on behalf of another. Id.

The Secretary relies primarily on this second clause of subsection (i) to argue that the Koresko Defendants are fiduciaries subject to ERISA’s fiduciary responsibilities. DOL Br. 19-21. Thus, the Court must first determine whether the monies held in the master REAL VEBA Trust and handled by some of the Koresko Defendants are “plan assets.”

2. Plan Assets

ERISA employee welfare benefit plans need not have plan assets. Nevertheless, the Court finds that under the prevailing meaning of “plan assets,” the Cetylite, Decor, and Castellano Plans each have plan assets to which ERISA fiduciary responsibilities can attach.

Neither ERISA nor the Department of Labor regulations clearly define the term “plan assets.” The statute provides, in relevant part, that plan assets are “plan assets as defined by such regulations as the Secretary may prescribe.” ERISA Section 3(42), 29 U.S.C. § 1002(42). The regulations address the scope of “plan assets” in two specific contexts: (1) where an employee benefit plan invests in another entity, 29 C.F.R. § 2510.3-101, and (2) where contributions to a plan are withheld by an employer from employees’ wages, 29 C.F.R. § 2510.3-102. Secretary of Labor v. Doyle, 675 F.3d 187, 203 (3d Cir.2012).

The Secretary makes two arguments as to why the Plans have plan assets: (1) that under ordinary notions of property law, a plan obtains a beneficial interest if the property is held in trust for the benefit of the plan or its participants and beneficiaries; and (2) that 29 C.F.R. § 2510.3-101(h)(2) applies and controls. The Court addresses each argument below.

a. Beneficial Ownership Interest in the Multiple Employer Trust Context

The parties do not appear to dispute that the governing standard for defining “plan assets” is the one recently articulated by the Court of Appeals for the Third Circuit in Secretary of Labor v. Doyle, 675 F.3d 187 (3d Cir.2012). In Doyle, the Third Circuit explained that the term “plan assets” should be given its ordinary meaning, and therefore should be construed to refer to property owned by an ERISA plan. Id. at 203. In doing so, the Third Circuit cited with approval an advisory opinion issued by the Department of Labor stating that “the assets of a plan generally are to be identified on the basis of ordinary notions of property rights under non-ERISA law. In general, the assets of a welfare plan would include any property, tangible or intangible, in which the plan has a beneficial ownership interest.” Id. (citing DOL Advisory Op. No. 93-14A, 1993 WL 188473, at *4 (May 5, 1