Citations
- 265 F. Supp. 3d 1307
Full opinion text
MEMORANDUM OPINION AND ORDER
W. Keith Watkins, CHIEF UNITED STATES DISTRICT JUDGE
I. INTRODUCTION
Defendant Community Bankshares, Iric. (“Bankshares"), maintained 'an Employee Stock Ownership Plan (“ESOP” or “Plan”). The ESOP, which was invested primarily in Bankshares’s stock, was a retirement plan governed by the Employee Retirement Income Security Act of 1974 (“ERISA”). See 29 U.S.C. §§ 1001, et seq. Plaintiffs Dave and Vikki Bryant were participants in the ESOP. In April 2009, having met the age and participation requirements, Plaintiffs were,eligible to diversify a percentage of the employer stock in their individual ESOP accounts. They contend that Bankshares, as the Plan administrator, failed, to follow the Plan’s directives to implement their diversification elections by June 30, 2009, and to distribute shares of stock, which would have been subject to a put option binding against Bankshares based upon the preceding year’s stock valuation of $11.00 per share. Instead, Bank-shares suspended implementation of the diversification elections until after (1) an interim valuation revealed that in September 2009 the stock’s worth had, plummeted to $2.30 per share and (2) Bankshares and the Federal Reserve Bank had entered into a written agreement that 'prohibited Bankshares from redeeming put options. Thereafter, against this bleak backdrop, in November 2009, Bankshares offered to issue stock in satisfaction of the diversification elections but informed participants that it would not honor the put options. Bankshares also gave participants the option to change their 2009 diversification elections in light of this new information; however, Plaintiffs contend that this offer to receive the illiquid stock of a failing bank and the resultant tax liability presented no choice at all. Thus, Bankshares deprived Plaintiffs- of their rights under the Plan to receive a distribution of shares and to exercise a put option, which would have required Bankshares to buy back the shares based upon the preceding year’s stock valuation of $11.00 per share. The stock is now worthless.
The Plan administrator defends its decision, contending that, given Bankshares’s deteriorating financial condition, it acted in the best interests of all Plan participants by refusing to honor 2009 diversification elections, which under the Plan would have been subject to put options at the preceding year’s stock valuation. It further contends that, in November 2009, the Bryants voluntarily submitted ‘new diversification elections to keep their stock in the Plan and that these new elections voided their April 2009 diversification elections.
This is the Bryants’ second ERISA action against Bankshares and the Plan’s fiduciaries to enforce Plan rights and obtain benefits under 29 U.S.C. § 1132(a)(1)(B). Before the court are the parties’ cross-motions for summary judgment. (Docs. # 57, 58.) On the § 1132(a)(1)(B) claim, Plaintiffs’ motion for summary judgment is due to be granted, and Defendants’ motion for summary judgment is due to be denied. As to Defendants’ motion for summary judgment on Plaintiffs’ request for attorney’s fees, the motion is due to be granted, and Plaintiffs’ competing motion for summary judgment is due to be denied.
II.JURISDICTION AND VENUE
The court exercises subject-matter jurisdiction pursuant to 28 U.S.C. § 1331 and 29 U.S.C. § 1132(e). The parties do not contest personal jurisdiction or venue.
III.STANDARD OF REVIEW
The parties advance the issues in this ERISA action through cross-motions for summary judgment. In the typical case, summary judgment is appropriate when the “movant shows that 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). This is not the typical case, however. It is an ERISA action where the material undisputed facts are part of an administrative record and where Rule 56 provides the procedural mechanism for disposing of legal issues; hence, the court “sits more as an appellate tribunal than as a trial court.” Curran v. Kemper Natl Serv., Inc., No. 04-14097, at *7, 2005 WL 894840 (11th Cir. Mar. 16, 2005).
The Eleventh Circuit, following guidance from the United States Supreme Court, has developed a six-step process to guide the district court’s review of a plan administrator’s benefits-denial decision and that review hinges on whether the plan gave the administrator discretion to deny the claim. See Blankenship v. Metro. Life Co., 644 F.3d 1350, 1355 (11th Cir. 2011) (citing Firestone Tire & Rubber Co. v. Bruch, 489 U.S. 101, 109 S.Ct. 948, 103 L.Ed.2d 80 (1989), and Metro. Life Ins. Co. v. Glenn, 554 U.S. 105, 128 S.Ct. 2343, 171 L.Ed.2d 299 (2008)). The court elaborates upon and employs this process in Part V.
IV.BACKGROUND
A. Parties
At all times relevant to the events in this litigation, Bankshares had its headquarters in Cornelia, Georgia, and was the holding company of several banks, including Community Bank & Trust-Alabama in Union Springs, Alabama (“Alabama Bank”), and Community Bank & Trust-Habersham in Cornelia, Georgia (“Georgia Bank”). Mr. Bryant was the president and chief executive officer of the Alabama Bank and the vice chairperson of its Board. His spouse, Plaintiff Vikki Bryant, was an employee of the Alabama Bank.
Bankshares maintained an ESOP for its employees and for the employees of affiliated employers, and Plaintiffs were participants in the ESOP. The Plan established a trust fund to hold the assets of the Plan and delegated the operation and management of the Plan and the trust fund to fiduciaries. The individual Defendants— Steven C. Adams (now his estate); Elton 5. Collins; Edwin B. Burr; Wesley A. Dodd, Jr.; William R. Stump, Jr.; and Mary Wilkerson — had fiduciary responsibilities for the administration of the Plan and Trust. Dodd, Stump, and Wilkerson served, successively, as the Plan administrator’s appointees, and the Plan named Adams, Burr, and Collins as trustees. (See Plan, §§ 1.19, 1.29, 1.35.)
The Plan administrator, whom the Plan designated as Bankshares or as individuals or entities appointed by Bankshares, “ha[d] sole responsibility for the administration of the Plan.” (Plan, §§ 1.29, 7.1.) The Plan trustee “ha[d] sole responsibility for management of the assets held under the Trust.” (Plan, § 7.1.) However, “[n]o Fiduciary guarantees the Trust Fund in any manner against investment loss or depreciation in asset value.” (Plan, § 7.1.)
B. The ESOP
1. Generally
An ESOP is a “defined contribution plan” that is “designed to invest primarily in qualifying employer securities.” 26 U.S.C. § 4975(e)(7). It is “a type of pension plan intended to encourage employees to make their employees stockholders.” Steinman v. Hicks, 352 F.3d 1101, 1102 (7th Cir. 2003).
Bankshares established and maintained the ESOP through a written instrument that defined the terms of the Plan and the rights of participants. Bankshares was the sole source of funding for the Plan and made annual contributions to the trust, which invested primarily in Bankshares’s stock and secondarily in cash. Eligibility to participate in the Plan required an employee’s completion of one year of service during which the employee had worked at least 1,000 hours. In 2009, there were 459 participants in the Plan.
2. The Plan Provisions
The focus of this litigation is on the Plan’s terms governing an eligible participant’s rights to diversify his or her individual account investments (§ 8.3) and to exercise a put option on the distribution of employer stock in satisfaction of a diversification election (§ 5.8). The interplay between these two provisions (which themselves are intertwined) and the provision governing the Plan administrator’s fiduciary duties (§ 8.4) also is at issue. Because the Plan administrator and trustees had to discharge their duties in accordance with the Plan provisions, see 29 U.S.C. § 1104(a)(1)(A), §§ 8.3, 5.8, and 8.4 are set out verbatim.
Section 8.3 of the Plan titled, “Diversification of Investments,” provides:
Each Eligible Participant shall, during any Qualified Election Period, be permitted to diversify the investment of a portion of his Employer Contribution Account in accordance .with the provisions of this Section 8.3. Each Eligible Participant may elect, in a writing delivered to the Plan Administrator within ninety (90) days after the close of each Plan Year during the Qualified Election Period, to diversify the investment of twenty-five percent (25%) of such Participant’s Employer Contribution Account in the Plan, determined as of the Annual Valuation Date for the Plan Year preceding the Plan Year in which such election is made (to the extent such portion exceeds the amount to which a prior election under this Section 8.3 applies); provided that in the case of the election year in which the Participant is permitted to make his last such election, fifty percent (50%) shall be substituted for twenty-five percent (25%) in applying this Section 8.3. For purposes of this Section 8.3 a Participant’s Employer ■Contribution Account at the end of any Plan Year shall be deemed not to include any amount contributed to the Plan-after the end of such Plan Year, even if allocated as of the end of such Plan Year.
An Eligible Participant electing to diversify his Account shall direct the Plan Administrator to distribute (or transfer to an Individual Retirement Account or another qualified retirement plan) shares of Company Stock, rounded to the nearest whole share, equal to that portion of the Participant’s Employer Contribution Account that is covered by the election. Such transfer or distribution shall be made no later than ninety (90) days after the last day of the Qualified Election Period during which such Participant directed such investment.
No fiduciary of the Plan shall have any liability for investments and reinvest-ments made under this Section 8.3 pursuant to the direction of an Eligible Participant. The account, of an Eligible Participant who directs the investment of a portion of his Employer Contribution Account shall be charged with all costs and expenses of such investment or reinvestment or of any other transaction hereunder at the request of the Participant, as well as all income, gains, losses, etc. attributable to such investment or reinvestment.
(Plan, § 8.3 (Doc. # 57-3, at 18-19).)
The Plan also defines the terms in § 8.3. An “eligible participant” is an employee who has attained at least the age of 55 and has at least ten years of participation in the Plan. (Plan, § 1.12.) A “qualified election period” is “[t]he six (6) Plan Year period beginning with the first Plan Year in which the relevant Participant first becomes an Eligible Participant.” (Plan, § 1.31.) A “plan year” is a calendar year (Plan, § 1.30), and the Annual Valuation Date is “December 31 of each Plan Year” (Plan, § 1.36).
Under § 8.3, eligible participants were entitled to receive shares of stock only, not cash. But the Plan also gave participants a “put” option that was binding on Bank-shares at any time when its stock was not publicly traded. Section § 5.8, titled, “Participant’s Right to Put Company Stock to the Company and the Plan,” provides as follows:
(a) General — Any Participant (or his Beneficiary) receiving a distribution of Company Stock from the Plan at a time when such Company Stock is not readily tradeable on an established market shall have a “put option” on such shares, giving him the right to have the Company purchase such shares....’ The same right shall apply to any Company Stock distributed to a Participant (or his Beneficiary), at a time when such Company Stock is hot readily tradeable on an established market. The put option shall be exercisable during the following two election periods by giving notice in writing to the Company:
(i) the first option period shall be the sixty (60) day period commencing on the date of distribution of the shares of Company Stock; and
(ii) .the second option period shall be the sixty (60) day period commencing on the' date the fair market value of the Company. Stock is determined (and the Participant or Beneficiary is notified of such determination) as provided for in Section 4.2 for the Plan ■Year next following the Plan Year in which such shares are distributed.
The Plan may be given the opportunity to purchase shares of Company Stock tendered to the Company under the put option, as described. in subsection (c) hereof. Except to the extent otherwise required by law, the put option hereunder shall not apply at any time that the Company Stock is readily tradeable on an. established market.
(b) Price and Payment — -The price at which the put option shall be exercisable is the fair market value as of the Annual Valuation Date which precedes the date the put option is exercised except in the case of a put option in favor of a “disqualified person” (as defined in Code Section 4975) in which event the fair market value shall be determined as Qf the date of the transaction. Payment for the shares of Company Stock put to the Company may be made in cash or in installments, not less frequently than annually, over a. period not exceeding five (5) years, at the election of the Company. If the purchase price is paid in installments, a reasonable interest rate, reflecting then prevailing market interest rates, must be provided. Closing of thé sale shall take place and any installment payments shall begin within thirty (30) days after the put option is exercised.
(c) Right of Plan — The Plan shall have the option by notice in writing to the Company to assume the rights and obligations of the- Company under the put option provided for herein at the time the put option is exercised. The put option provided for hereunder shall not bind the Plan to purchase the Company Stock. In any case in which the Plan assumes the rights and obligations of the Company under the put option and payment for the stock is to be made in installments, the Company shall guarantee payment of the Plan’s obligations to the Seller.
(Plan, § 5.8(a)-(c).)
As the Plan language reveals, §§ 5.8 and 8.3 work together. To summarize, an eligible participant — one who had participated in the plan for ten years and had attained the age of at least 55 years — could make a diversification election within the 90-day period following the close of each plan year in the six-plan-year qualified election period. For the first five 90-day annual election periods, the Plan gave an eligible participant' the option to diversify 25% of his or her account balance that Was invested in employer securities, reduced by any amounts previously diversified. During the sixth and final 90-day election period in the qualified election period, an eligible participant could diversify 50% of stock shares in his or her account balance, reduced by amounts previously diversified. The value of the account balance was its value on the Annual Valuation Date.
Because Bankshares’ stock was not publicly traded on an established market, Bankshares was bound by § 5.8(b). When a participant received a distribution of Bankshares stock pursuant to a diversification election, the participant could exercise the put option within 60 days after the distribution of the stock or during the first 60 days of the following plan year. The date of the stock’s distribution, thus, triggered the time frame during which a participant could exercise the put option. The only way for an eligible participant to receive cash for stock distributed pursuant to a diversification election was through the put option. The price of the shares for purposes of the put option was the fair market value of the shares on the Annual Valuation Date preceding the year in which the participant exercised the put option. Because the value of the put option was based on the preceding year’s annual valuation, the value increased when the stock value decreased but decreased when the stock value increased.
There is no Plan language in the section that defines the Annual Valuation Date (§ 1.36) or in § 5.8 that permits Bank-shares to use a date other than the Annual Valuation Date when placing a value on Bankshares’s stock for purposes of buying back the shares under a put option. But, as Bankshares emphasizes, under § 8.4 of the Plan, the Plan administrator had a general fiduciary obligation to exercise its authority for the benefit of all Plan participants. This section provided that:
The Plan Administrator, the Investment Committee, the Trustee and any Investment Manager (and any other party who may, at any time be serving as a Fiduciary with respect to the Plan) shall discharge their duties solely in the interest of the Participants, for the exclusive purpose of providing benefits to the Employees as herein described and defraying reasonable expenses of administration, in accordance with the Plan and consistent with the fiduciary responsibility provisions of ERISA Title I, 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 like character and with like aims.
(Plan, § 8.4.)
C. The ESOP’s Annual Valuation of Bankshares’s Stock in 2008
The Plan required an independent appraiser to conduct a yearly assessment as of December 31 (ie., the Annual Valuation Date) of the trust fund’s fair market value; hence, the value of Bankshares’ stock was “its fair market value on such Annual Valuation Date ....” (Plan, § 4.2(a).) To obtain the annual valuation of its shares of common stock as of December 31, 2008, Bankshares hired an independent appraiser, Burke Capital Group (“BCG”), a division of Morgan Keegan and Company. BCG’s report, dated March 20, 2009, and titled, “Determination of the Fair Market Value of the Common Stock of [Bank-shares] for ESOP Valuation Purposes as of December 31, 2008,” placed an $11.00 per share value on Bankshares’s stock. The report explains that BCG’s “[vjaluation is solely of the fair market value of the Company’s shares as of December 31, 2008 for ESOP valuation purposes and may be materially different at any date other than the valuation date.” (Bankshares’s Valuation of Pair Market Value of Common Stock for ESOP Valuation Purposes as of Dec. 31, 2008, at 13 (Doc. # 57-10, at 13).)
D. Plaintiffs’ April 2009 Diversification Elections
In April 2009, Plaintiffs had satisfied the age and service requirements to qualify to diversify a percentage of the employer stock in their' individual ESOP accounts. Mr. Bryant was eligible to make a 50% election, and Mrs. Bryant was eligible to make a 25% election.
The Bryants each received an ESOP Investment Diversification Notice from Bankshares, dated February 25, 2009. The Notice informed Mr. Bryant that:
Under the terms of [the Plan], your account balance is invested primarily in stock issued by the plan sponsor. However, the plan allows you to tell the trustee how you want a portion of your plan account invested. You may elect to have this amount (1) paid directly to you, (2) transferred to an IRA, (3) transferred to the [Bankshares’s] 401(k) Plan, or (4) remain invested in employer securities under this plan.
The amount subject to your direction is 50% of your account balance invested in employer securities adjusted for any previous distributions, transfers or diversification.
Please complete this form and return it to Wes Dodd -no later than April 15, 2009. Your direction will be implemented no later than June 30, 2009.
(Mr. Bryant’s ESOP Investment Diversification Notice, at 2 (Doc. # 57-8).) Mr. Bryant checked the option on the Notice “to transfer the shares subject to my election to an IRA.” Mrs. Bryant also received a similar Notice, informing her that she had the right to diversify “25% of [her] account balance invested in employer securities.” (Mrs. Bryant’s ESOP Investment Diversification Notice, at 2 (Doc. # 57-9).) She, like her husband, selected the option “to transfer the shares subject to my election to an IRA.” (Id.) The signature date on each Plaintiffs Notice is April 14, 2009.
Although the Plan required eligible participants to make their elections by March 31 of each Plan year, the Plan Administrator “allowed participants until April 15 to make their diversification elections.” (Stump’s Aff., at 3 (Doc. # 58-5).) Presumably, for this reason, the timeliness of the Bryants’ diversification elections is not an issue. There also is no dispute that the Bryants properly exercised their' rights under the Plan to make a diversification election.
E. The Bryants’ Account Balances as of the December 31, 2008 Annual Valuation Date
The value of the Bryants’ accounts as of the Annual Valuation Date (December 31, 2008) is as follows. Mr. Bryant held 9,197.930607 shares of Bankshares stock in his ESOP. The cumulative monetary value of the shares (calculated by multiplying the units of shares by $11.00 per share) was $101,177.24. Mr. Bryant’s account also had $8,946.30 in cash. (Mr. Bryant’s ESOP Account Balance, at 2 (Doc. # 57-25).) Mrs. Bryant’s account held 880.205842 shares of Bankshares stock. The cumulative monetary value of the shares (calculated by multiplying the units of shares by $11.00 per share) equaled $9,682.26. Mrs. Bryant’s account also. had $1,704.12 in cash. (Mrs. Bryant’s' ESOP Account Balance, at 3 (Doc. # 57-25).)
F. Events Subsequent to June 30, 2009
In the ESOP Investment Diversification Notices, Bankshares informed participants it would implement participants’ diversification elections by June 30, 2009. That deadline came arid went. Then, on September 16, 2009, with diversification elections still unfulfilled, Bankshares entered into a written agreement with the Federal -Reserve Bank (“FRB”) and the Georgia Bank Commissioner. The written agreement prohibited Bankshares from purchasing or redeeming, its stock without prior consent from the FRB and the Bank Commissioner.
G. The September 30, 2009 Special Valuation
Suspecting that the value of its stock had declined markedly, Bankshares hired BCG to prepare a special valuation of the fair market value of its common stock, On October 23, 2009, Bankshares received the valuation, which revealed that, as of September 30, 2009, Bankshares stock value had plummeted to $2.30 per share. (ESOP, eff. 10/30/2009 (Doc. # 57-11).) According to Defendants, “[t]he September 2009 Special Valuation supplemented and revised the December 2008 Annual Valuation”; however, as discussed later in this'opinion, Defendants do not point to any provision in the governing Plan, and the court found none, that permitted a revaluation for purposes of implementing diversification elections or for valuing put options. (Defs, Resp. to Interrog. No. 19 (Doc. # 64-1, at 10).) Also, around this time, Bankshares’s Vice Presideht of Human Resources Mary Wilkerson became the Plan administrator and orally informed Mr. Bryant that the Plan would not be implementing any of the participants’ April 2009 diversification elections. (Mr. Bryant’s Dep., at -16-19 (Doc. # 57-28).)
H.The November 2, 2009 Letter from Bankshares to the ESOP Participants and Plaintiffs’ November 30, 2009 Diversification Requests
In a letter .dated November 2, 2009, Bankshares notified- all Plan participants of the results of the special valuation and the stock’s $2.30 per share value. This letter informed Plan participants that the ESOP did not “have enough cash, or the ability to raise additional cash, to implement fairly participants’ diversification elections, given the obligation to operate the ESOP in the interests of all participants and beneficiaries.” (Bankshares’s Nov. 2,2009 Update on ESOP Issues (Doc. # 57-13).) The letter provided notice to the Bryants that: (1) The Plan would “honor” prior diversification elections, but that distributions would be in shares of common stock only; (2) that the ESOP would not offer a' put option on stock distributions; (3) that Bankshares would reinstate the put option when the Federal Reserve Bank lifted the restriction on Bankshares from redeeming its shares of stock, but that the price of the put option would be based'on the “fair market value at that time and in accordance with such rules as the Plan Administrator may establish.”' (Bank-shares’s Nov. 2, 2009 Update on ESOP Issues (Doc. # 57-13, at 3-4).) The letter further warned Plan participants who opted to make diversification elections that the distribution of common stock would be a taxable event, but that Plan participants could “rollover the distribution to an IRA and avoid .current taxation.” Finally, Bank-shares informed participants that the ESOP would permit participants to change their current diversification election based on the then-current financial situation.
In conjunction .with the foregoing letter, Bankshares sent each Plaintiff another ESOP Investment Diversification Notice. It was the same Notice dated February 25, 2009, but the February 25, 2009 date was marked through and replaced with a handwritten date of November 30, 3009, Both Plaintiffs filled out this form and elected for their shares to remain invested in the Plan. (Docs. . # 57 — 3.4, 57-15.) Because Plaintiffs did hot receive a distribution of stock after making their April 2009' diversification elections, they did not have the opportunity to exercise a put option.
I. The Collapse of the Bank and Its Aftermath
On January 29, 2010, the Georgia Department of Banking and Finance closed the Georgia Bank and named the FDIC as receiver. Betweeh September 30, 2009, and December 31, 2009, the Value of Bank-shares’s stock dropped from $2.30 to $0.15 per share.
On or about June 23, 2011, Mr'.' Bryant received a distribution of the cash in his ESOP account, totaling $8,806.53, and Mrs. Bryant received a distribution of the cash in her ESOP account, totaling $1,667.31. The Bryants’ stock remains'in their ESOP accounts, but it is worthless.
In 2012, Bankshares’s board of directors became the Plan administrator. As of March 29, 2012, Bankshares’s board of directors had voted to terminate the Plan; however, on May 28, 2016,-the date Stump signed his sumhiary judgment affidavit, the termination still was 'not effective. (Stump’s Aff. ¶¶ 3, 38 (Doc. #58-5); see also Minutes, Bankshares Bd. of Directors Meeting, 03/29/2012 (noting that a request to terminate the Plan had been filed with Internal Revenue Service (Doc. # 58-5, at 19).) Because the Plan appears for all practical purposes to be defunct, references in this opinion to the Plan are in the past tense.
J. Plaintiffs’ First Lawsuit and Exhaustion , of Administrative Remedies
On June 29, 2012, Plaintiffs filed their first ERISA lawsuit in this court against Defendants. (Bryant, et al. v. Community Bankshares, et al., No. 2:12-CV-562-MEF (M.D. Ala. June 29, 2012).) The action was dismissed on March 3, 2014, without prejudice, for- Plaintiffs’ failure to exhaust their administrative remedies. Subsequently, the Bryants initiated the administrative review process.
By letter dated March 12, 2014, Plaintiffs’ counsel submitted a written claim to the Plan administrator under § 7.3 of the Plan, asserting that the “crux of [Plaintiffs’] claim is that [the Plan administrator] had a, contractual obligation to diversify the Bryants’ accounts and failed to do so.” (Pis.’ March 12, 2014 Claim for Benefits, at 3 (Doc. # 1-9).) Plaintiffs asked for specified monetary relief, which they calculated based on 50% of the value of Mr. Bryant’s account and 25% of the value of Mrs. Bryant’s account. The Plan Administrator, in letters dated Juné 9, 2014, separately denied each Plaintiffs claim:
Ordinarily, the Plan Administrator would have been obligated to implement [the Bryants’] April 2009 Diversification Request on or before June 30, 2009. At the time, however, [Bankshares’s] stock had dramatically declined in valué from $11.00 per share in Decémber 2008 to just $5.20 per share in June 2009, and [Bankshares’s] financial situation was deteriorating further. [Bankshares] knew that the value of its shares would continue to decrease (and indeed, they fell to just $2.30 by November 2009.) If the stock had been transferred to [the Bryants’] IRA[s], [Bankshares] was not in a position to honor the put option to repurchase the stock, nor did [Bank-shares] have a good valuation for the stock since it was declining so rapidly in value. The Plan also could not distribute cash to [the Bryants] (or other participants electing diversification of their accounts] ) for the value of stock because that would have had an adverse effect on other Plan participants. [Bankshares] decided to suspend all diversification requests until it could develop a plan that would be fair and equitable to all Plan participants. [Bankshares] had a fiduciary responsibility to act for the benefit of all participants and [Bankshares] could not honor diversification elections to the detriment of other Plan participants. As a result, [Bankshares] properly concluded that it could not grant [the Bryants’] April 2009 Diversification Request.
[The Bryants’] Claim is also denied because [the Bryants] ultimately elected for [their] shares to remain invested in the Plan. In [their] November 2009 Diversification Request, [the Bryants] voluntarily elected for [their] shares to remain invested in the Plan. [The Bryants] could have directed the Plan to transfer [their] shares to an IRA and the Plan would have done so. [The Bryants] executed [their] November 2009 Diversification Request and submitted it to the Plan Administrator. [The Bryants’] November 2009 Diversification Requests] revoked [their] April 2009 Diversification Requests[s] and rendered [them] null and void. There is no outstanding request by [the Bryants].
(Bankshares’s June 9, 2014 Letters Denying Bryants’ Initial Claims (Doc. # 1-10, at 6; Doc. # 1-11, at 5-6).)
By letter dated August 6, 2014, Plaintiffs’ counsel requested a review of the Plan administrator’s decisions denying Plaintiffs’ claims:
Your letter suggests that the claim is denied because it was impossible for the Bank to diversify the Bryants’ accounts without having an adverse effect on other Plan participants. The Alabama Supreme Court, however, has repeatedly refused to recognize impossibility as a defense to a contract action. As a result, your obligation to diversify the [Bryants’] holdings in June 2009 was absolute. Indeed, the facts you cite in support of impossibility suggest that the Bank chose not to diversify because it did not want to buy its own rapidly collapsing stock. Instead, it let its own employees absorb the blow. There is no legal or factual reason why the Bank could not diversify the accounts before October 14, 2009.
Further, the Bryants’ decision to fill out the second diversification request did not approve or ratify the Bank’s breach. Instead, the Bryants were mitigating their damages. The Bank sent a letter to the [Plan] participants who had elected to diversify their holdings stating that the Plan did not “have enough cash, or the ability to raise additional cash, to implement fairly participants’ diversification elections.” You then informed the [Plan] participants that if they intended to pursue diversification, it would take the form of a distribution of common stock which would be taxable to the participants which could not be sold and would not be accompanied by money to cover the tax liability. The Bryants’ choice then — as you presented it — was to accept the total loss of the value of the [Plan] or to accept the total loss of value of the [Plan] and incur additional tax liability by acquiring a functionally worthless stock. This, of course, is no real choice, at all.
(Pls.’s Aug. 6, 2014 Admin. Appeal (Doc. # 1-12, at 3-4 (internal citations omitted)).)
Bankshares denied Plaintiffs’ appeals in its letters dated October 3, 2014, stating:
As explained in the Denial of [the Bryants’ claims], [the Bryants’] April 2009 diversification requests [were] not honored, in part because it would have had an adverse impact on other Plan participants. .CBI, as the Plan Administrator, had a duty to act for the benefit of all Plan participants, not just [the Bryants]. Plan § 8.4; see also 29 U.S.C. § 1104(a)(1)(A) (“[A] fiduciary shall discharge his duties with respect to a plan solely in the interest of the participants and beneficiaries .... ”); Ameritech Benefit Plan Comm. v. Cómmc’n Workers of Am., 220 F.3d 814, 825 (7th Cir. 2000) (recognizing that ERISA’s fiduciary duty requires plan administrators to “act in the best interest of all the beneficiaries” such that plan administrators are “not allowed to favor one class of beneficiaries over another”); Barnhart v. Unum [UNUM] Life Ins. Co. of Am., 179 F.3d 583, 589 (8th Cir. 1999) (“Fiduciary obligations extend primarily to the plan as it relates to all beneficiaries, not just to individual claimants.”).
CBI could not authorize the distribution of cash to [the Bryants] (or any other •participant electing diversification of their account) from the Plan in payment for [their] units in the CBI stock fund because it would have had an adverse effect on the other. Plan participants. CBI could not repurchase the stock and the only other party that could have repurchased his stock was the [Plan].' As a result, CBI properly concluded that it could not grant [the Bryants’] April 2009 diversification request.
[The Bryants’] citations to cases regarding impossibility in the context of breach of contract cases under Alabama law are inapplicable here. [The Bryants’] Claim[s] arise[ ] under ERISA and [are] therefore subject to federal law interpreting ERISA plans, not Alabama state law interpreting contracts. Moreover, CBI does not seek to excuse a breach of the Plan on the basis of impossibility. Instead, there is no breach of the Plan because CBI was acting in the best interest of all of the Plan beneficiaries when it declined to honor [the Bryants’] April 2009 diversification request. Accordingly, the Denial of [the Bryants’] Claim[s] is upheld.
[The Bryants] claim[] that [their] November 2009 diversification request was an attempt to mitigate [their] damages. At the time CBI received [the Bryants’] November 2009 diversification request, however, CBI reasonably believed that, based upon the information provided to Plan participants in its November 2009 letter, [the Bryants were] voluntarily electing for [their] shares to remain in the Plan and to revoke [their] April 2009 diversification request. As a result, [the Bryants’] November 2009 diversification request nullified and voided [their] April 2009 diversification requests], and there is no outstanding diversification request by [the Bryants]. For this reason, the Denial of [the Bryants’] Claim is upheld.
(Bankshares’s Letters Denying Bryants’ Admin. Appeals (Doc. # 1-13, at 3 — 4; Doc. # 1-14, at 3^4).) '
K. The Presént Lawsuit
After exhausting their administrative remedies with unsuccessful results, the Bryants brought this action. This case proceeds on a claim under § 1132(a)(1)(B). The claim alleges: “Under the Plan, Mr. Bryant had the right to diversify 50% of his. holdings out of Bankshares stock into his IRA. Ms. Bryant had the right to diversify 25% of her holdings. The Bryants elected to exercise their right to diversify. Bankshares Plan Fiduciaries including Plan Administrators and Trustees failed to diversify Bryant’s holdings.” (Compl. ¶ 27 (Doc. # 1).) The Bryants seek “actual and punitive” damages, costs, and attorney’s fees. {Id.)
V. DISCUSSION
In Firestone Tire & Rubber Co. v. Bruch, 489 U.S. 101, 109 S.Ct. 948, 103 L.Ed.2d 80 (1989), the Supreme Court held that § 502(a)(1)(B) claims challenging the denial of benefits based on plan interpretations are subject to de novo review “unless the benefit plan gives the administrator or fiduciary discretionary authority to determine eligibility for benefits or to construe the terms of the plan.” Id. at 115, 109 S.Ct. 948. When the plan confers discretion, judicial review of the exercise of that discretion is limited to whether the decision was arbitrary or capricious. Following the guidance of the Supreme Court, the Eleventh Circuit has developed a six-step process for judicial review of a plan administrator’s benefits-denial decision:
(1) [ajpply the de novo standard to determine whether the claim administrator’s benefits-denial decision is “wrong” (i.e., the court disagrees with the administrator’s decision); if it is not, then end the inquiry and affirm the decision.
(2) If the administrator’s decision in fact is “de novo wrong,” then determine whether he was vested with discretion in reviewing claims; if not, end judicial inquiry and reverse decision.
(3) If the administrator’s decision is “de novo wrong” and he was'vested with discretion in reviewing claims, then determine whether “reasonable” grounds supported it (hence, review his decision under the more deferential arbitrary and capricious standard); ..
(4) If no reasonable grounds exist, then end the inquiry and reverse the administrator’s decision; if-reasonable grounds do exist, then determine if he--operated under a conflict of interest;
(5) If there is no conflict, then end the inquiry and affirm the decision.
(6) If there is . a conflict, the conflict should merely be a factor for the court to take into account when determining whether an administrator’s decision was arbitrary and capricious.
Blankenship, 644 F.3d at 1355.
A. Steps One and Two
Plan language giving the plan administrator “full and exclusive authority to determine all questions of coverage and eligibility,” as well ".as' “full power to construe the provisions of [the] Trust,” confers the requisite discretionary authority on the plan administrator to trigger review under the arbitrary-and-capricious standard of review. Guy v. Se. Iron Workers’ Welfare Fund, 877 F.2d 37, 38-39 (11th Cir. 1989) (listing the “ ‘fair reading' and reasonableness of’ a plan administrator’s interpretation as a relevant factor under the arbitrary-and-capricious standard of review). The parties agree that § 7.3 of the Plan gave the Plan administrator discretion to interpret the Plan’s terms- and, therefore, that § 7.3 requires an evaluation of Plaintiffs’ § 1132(a)(1)(B) claim under the arbitrary-and-capricious standard of review. (Plan, § 7.3 (conferring on the Plan administrator “the sole and exclusive discretionary power to construe and interpret the Plan, and to determine all questions that may arise thereunder ..., including the amount of benefits to which any Participant or beneficiary may become entitled hereunder.,.”).)
Having determined that the Plan' gives a clear grant of discretion to the Plan administrator in reviewing claims (step two), the court will bypass step one and proceed directly to step three. The Eleventh Circuit also has taken this shortcut. See Till v. Lincoln Nat’l Life Ins. Co., 678 Fed.Appx, 805, 807-08 (11th Cir. 2017) (skipping step one of the Firestone analysis and focusing on the ultimate issue of whether the denial of benefits was arbitrary and capricious); see also Emery v. Am. Airlines, Inc., 56 F.Supp.3d 1284, 1289 (S.D. Fla. 2014) (same).
B. Step Three
At step three, the issue is whether based upon the information known to the Plan administrator when the final decision was made, the Plan Administrator’s resolution of Plaintiffs’ claim was “arbitrary and capricious” or an “abuse of discretion.” Blankenship, 644 F.3d at 1355 n.5 (noting that the phrases “arbitrary and capricious” and “abuse of discretion” are interchangeable in an ERISA case (citing Jett v. Blue Cross & Blue Shield of Ala., Inc., 890 F.2d 1137, 1139 (11th Cir. 1989))). The arbitrary and capricious standard of review applies to “both the administrator’s construction of the plan and concomitant factual findings.” Paramore v. Delta Air Lines, Inc., 129 F.3d 1446, 1451 (11th Cir. 1997).
“When conducting a review of an ERISA benefits denial under an arbitrary and capricious standard ..., the function of the court is to determine whether there was a reasonable basis for the decision, based upon the facts as known to the administrator at the time the decision was made.” Jett, 890 F.2d at 1140. A decision is reasonable “even if there is evidence that would support a . contrary decision.” Id. Factors that shed light on the inquiry include:, (1) whether the plan administrator’s interpretation is contrary to the clear terms of the plan; (2) whether the plan administrator has interpreted the terms uniformly; (3) whether the interpretation of the Plan is reasonable and a fair reading of the Plan; (4) whether the interpretation took into consideration the future financial health of the plan; (5) whether the interpretation renders language in the Plan meaningless or internally inconsistent; (6) whether the plan interpretation complies with governing regulations; and (7) the factual background of the decision, including any indicia of bad faith. Cagle v. Bruner, 112 F.3d 1510, 1518 & n.6 (11th Cir. 1997) (delineating factors two through seven); Dennard v. Richards Grp., Inc., 681 F.2d 306, 314 (5th Cir. 1982) (explaining that, “[w]hen the trustee’s interpretation of a plan is in direct conflict with express language in a plan, this action is a very strong indication of arbitrary and capricious behavior”); Guy v. Se. Iron Workers’ Welfare Fund, 877. F.2d 37, 39 (11th Cir. 1989) (fair reading).
Although the Plan administrator’s interpretation of the Plan under the arbitrary-and-capricious standard of review is entitled to a high level of deference, the standard is not toothless. Till v. Lincoln Nat’l Life Ins. Co., 182 F.Supp.3d 1243, 1268-69 (M.D. Ala. 2016), aff’d, 678 Fed.Appx. 805 (11th Cir. 2017). Courts have recognized that a plan interpretation is arbitrary and capricious when the plan administrator “construe[s] provisions of a plan in a way that clearly conflicts with the plain language of the Plan,” when the interpretation “renders nugatory other provisions of the Plan,” and when the Plan administrator’s construction of the provision “lacks any rational nexus to the primary purpose” of the Plan. Tapley v. Locals 302 & 612 of the Int’l Union of Operating Eng’r-Emp’rs Constr. Indus. Ret. Plan, 728 F.3d 1134, 1139 (9th Cir. 2013) (internal citations, brackets, and quotation marks omitted). Additionally, “[a] decision is arbitrary and capricious if it was made in bad faith, not supported by substantial evidence, or is erroneous on a question of law.” Acree v. Hartford Life & Acc. Ins. Co., 917 F.Supp.2d 1296, 1310 (M.D. Ga. 2013). And, as one circuit put it, “[i]n some cases, the plain language or structure of the plan or simple common sense will require the court to pronounce an administrator’s determination arbitrary and capricious.” Hess v. Hartford Life & Acc. Ins. Co., 274 F.3d 456, 461 (7th Cir. 2001).
Here, some of the reasons Defendants offer to justify the Plan administrator’s reasons for denying Plaintiffs’' diversification elections were reasons Bankshares articulated to the Bryants during the administrative claims process. Others are new reasons advanced in this litigation. As to the former, while the Eleventh Circuit has not precluded a court’s consideration of a post-hoc rationale of an administrative denial of a claim for benefits, there may be good reasons to treat that rationale with a dose of skepticism. See Tippitt v. Reliance Standard Life Ins. Co., 276 Fed.Appx. 912, 915 (11th Cir. 2008) (recognizing that “[a] district court may choose not to accord self-serving post-hoc explanations much weight ..., but it is not error to consider them”). In University Hospitals of Cleveland v. Emerson Elec. Co., 202 F.3d 839 (6th Cir. 2000), cited with approval in Tip-pitt, the Sixth Circuit observed the pitfalls of the post-hoc rationale:
[I]t strikes us as problematic to, on the one hand, recognize an administrator’s discretion to interpret a plan by applying a deferential “arbitrary and capricious” standard of review, yet, on the other hand, allow the administrator to “shore up” a decision after-the-fact by testifying as to the “true” basis for the decision after the matter is in litigation, possible deficiencies in the decision are identified, and an attorney is consulted to defend the decision by developing creative post hoc arguments that can survive deferential review.
In light of the foregoing principles, the court analyzes both the reasons the Plan administrator articulated in his written decisions denying the Bryants’ formal claims and upholding the denials (which are set out in the plan administrator’s letters dated June 9, 2014, and October 3, 2014, respectively) and the additional reasons that have surfaced during this litigation. It should be noted that the parties’ arguments are long on the recitation of facts, but short on the factual and legal analysis, thus, leaving the court to its own research and analytical devices in assessing whether the Plan administrator’s decisions pass muster under the arbitrary-and-capricious standard of review. Ultimately, the court concludes that the Plan administrator’s decisions were arbitrary, and capricious.
1. The Plan Administrator’s Articulated Reasons for the Denials
Then-Plan administrator Stump informed the Bryants' -in letters denying their initial claims that, “[ojrdinarily, the Plan Administrator would have been obligated to implement Mr. Bryant’s April 2009 Diversification Request[s] on or before June 30, 2009.” (Bankshares’s June 9, 2014 Letter Denying Mr. Bryant’s Claim for Benefits, at 6 (Doc. # 1-10); see also Dodd’s Aff., ¶ 12 (Doc. # 58-6,(confirming that, “[o]rdinarily, with the guidance of independent third party advisors, [he] would have implemented the April 2009 Diversification Requests and subsequent purchase of the shares, either through the participant’s exercise of the put option or the Plan’s election to purchase shares, based on the $11.00 per share value in the 2008 Annual Valuation. This process ordinarily would have been completed on or before June 30, 2009.”).) Stump gave four reasons why Bankshares did not implement the diversification requests prior to June 30, 2009. He explained that, “[a]t that time,”
(1)Bankshares’ stock had plummeted “from $11.00 per share in December 2008 to just $5.20 per share in June 2009,” and Bankshares did not have an accurate current valuation of its stock,
(2) Bankshares “was not in a position to honor the put option to repurchase the stock,” and ‘
(3) the Plan alternatively could not purchase the shares tendered to Bank-shares under the put option because the purchase would “have had an adverse effect on other Plan participants.”
Based on reasons (1), (2), and (3), Stump cited § 8.4 of the Plan and said that Bank-shares “decided to suspend all diversification elections until it could develop a plan that would be fair and equitable to all Plan participants.”
Concerning the fourth reason (4), the Plan administrator explained that, later in November 2009, the Bryants revoked their April 2009 diversification elections to transfer the shares to their individual retirement accounts and directed Bank-shares to keep their shares invested in the Plan, and that there are no longer outstanding diversification elections by the Bryants. It is appropriate to address reasons (1), (2), and (3) together, followed by a discussion of reason (4).
2. Reasons (1), (2), & (3)
The first three reasons underlying Bankshares’s decision to suspend implementation of the diversification elections arise from the Plan administrator’s belief that by June 30, 2009, the December 31, 2008 annual valuation did not accurately reflect the precipitous drop in Bank-shares’s stock in 2009. This meant that the 2008 annual valuation commanded an overinflated price for purposes of the Plan’s obligations to implement diversification elections and ensure a participant’s right to a put option. Reasons (1), (2), and (3) implicate Bankshares’s duties under the Plan to implement diversification elections and put option transactions when faeed with markedly declining stock values.
These three reasons for the Plan administrator’s decisions disallowing the Bryants’ proper elections to diversify their investments in their individual ESOP accounts" do not survive review under the arbitrary-and-capricious standard. . The decisions conflict with the clear, specific, and mandatory terms of the Plan governing stock valuation, a participant’s right to make a diversification election,- and a participant’s right to exercise a put option on distributed shares and, at the same time, render those mandatory terms nugatory. The decisions also construe the Plan in a manner that contravenes the governing federal regulations.
a. The Annual Valuation Date
Because the Plan does not contain an exception to the use of the Annual Valuation Date for purposes of implementing diversification elections and transacting put options, it was arbitrary and capricious for the Plan administrator to disregard the December 31, 2008 annual valuation. Where the “plan document unambiguously addresses the valuation procedure, .... the plan is contractually bound to honor that procedure .... ” Pratt v. Petroleum Prod. Mgmt. Inc. Emp. Sav. Plan & Trust, 920 F.2d 651, 662 (10th Cir. 1990). Under §§ 8.3 and 5.8 of the Plan, the fair market value of the participant’s account and of Bankshares’s stock is determined as of the Annual Valuation Date for purposes of distributions of stock shares precipitated by diversification elections and put option transactions.
Section 8.3 provided that-the participant could elect to diversify a percentage of the investment in his or her account in the Plan, “determined as of the Annual Valuation Date for the .Plan Year preceding the Plan Year in which such election [was] made.” (Plan. § 8.3.) The Plan, at § 1.36, mandated that the “Annual Valuation Date shall be December 31 of each Plan Year.” The Annual Valuation Date also fixed the value of the stock for the put option price. (See Plan, § 5.8(b) (“The price at which the put option shall be exercisable is the fair market value as of the Annual Valuation Date which precedes the date the'put option is exercised.”),) For both diversification elections and put option transactions made in 2009, the December 31, 2008 Annual Valuation Date fixed the value of the stock at $11.00 per share.
Sections 5.8 and 8.3 do not provide an exception or contingency permitting Bankshares to use a date other than the Annual Valuation Date for ascertaining the fair market value of Bankshares’s stock and a participant’s individual account. Defendants have not identified any Plan provision that gives the Plan administrator discretion to override the mandatory provisions of §§ 5.8 and 8.3; For instance, when asked, Dodd was unable to point to any language in the Plan to support his supposition that Bankshares did not have to implement a diversification election, which would have triggered the put option, based on the value of the stock on the Annual Valuation Date if the Plan trustees “fe[lt] like the valuation ha[d] changed dramatically.” (Dodd’s Dep., at 25-26 (Doc. # 57-27).)
The Plan language is clear: The Annual Valuation Date is the sole date that governs valuations for purposes of diversification elections and put option, transactions. The Plan language also is mandatory: The Annual Valuation Date “shall be December 31 of each Plan Year.” (Plan, § 1.36.) The Plan administrator’s construction of the' Plan to permit a special valuation in times of Bankshares’s financial crisis clearly conflicts with the Plan language.
Notably, the Plan could have made an exception for an alternative valuation date or other contingency plan in unexpected times of financial stress, but it did not. Other courts examining ESOPs have‘recognized, at least implicitly, the validity of such provisions. See, e.g., Craig v. Smith, 597 F.Supp.2d 814, 821 (S.D. Ind. 2009) (reciting the ESOP provision that assigned the value of stock for purposes of a put option “as of the most recent Valuation Date; unless the Administrator' believes that the value as of the most recent Valuation Date is significantly- more than the fair market value of such Employer Stock as of the date of the transaction, in which case, the value of the Employer stock shall be, if permitted under ERISA, the value of such Employer Stock determined as of the date of such transaction”); Jasper v. M.H. & B.L. Jasper, D.D.S., P.C. Profit Sharing Plan, 340 F.Supp.2d 1017, 1021-22 (E.D. Mo. 2004) (discussing a plan provision that permitted the Plan administrator to use a special valuation date for purposes of allocating trust fund earnings among the accounts “to avoid prejudice to any Participant under the Plan”); Mitchell v. Falley’s Inc., 958 F.Supp. 548, 650 (D. Kan. 1997) (observing that the Plan réquired an annual valuation of the stock, but allowed an interim valuation when the administrator “believe[d] that the value of the stock has changed substantially since the last valuation” and an adjustment of account balances if the interim valuation revealed a ten percent deviation (plus or minus)).
Moreover, Defendants have cited no authority, and the court has found none, indicating anything unusual about a plan that sets the valuation to occur on .an annual basis (instead :of more frequent valuations); and on a date that is earlier than the distribution date. When the valuation date precedes the election date, a participant can make an informed decision as to whether to diversify. Because the valuation establishes the number and worth of stock shares in a participant’s individual ESOP account prior to the election period, the participant, knows the value of his or her individual account and knows that a distribution of shares would proceed based upon that value. Additionally, cost efficiency may guide a company’s decision to have a yearly valuation date. See Pratt, 920 F.2d at 661-62 (observing that “plausible reasons exist for [an annual] valuation method” where, for example, the company deems “the expense of obtaining more frequent valuations for these employer securities [to be] too great”); see also American Bar Association Section of Taxation Employee Benefits Committee ESOP Subcommittee/Spring 2015 Meeting.Washington, D.C., 2015 ABATAX-CLE 0508026, 2015 WL 3792951 (May 8, 2015) (“ESOPs are only required to value the stock once a year and to require otherwise would be overly burdensome on the company and distract the company’s leadership from running, improving, and growing the company. The nature of an annual balance forward plan is that balances are static until the next annual allocation date and that activity is reflective of this static balance.”).
The selection of an Annual Valuation Date as the price point for diversification elections and put option transactions also reflects a realistic allocation of unknown risks between Bankshares and ESOP participants. For example, Bankshares may have anticipated that its stock value would increase,; in which case the participant would have borne the risk; however, unfortunately, for Bankshares, for diversification elections and put options exercised in 2009, Bankshares realized the risk. In Pratt, the Tenth Circuit aptly explained this risk in analyzing a terminated employee’s entitlement to a cash distribution of his vested interest in his ESOP account:
Of course, the difficulty with the’ plan in existence at the timé of plaintiffs termination is that the valuation of the plaintiffs interest in employer securities did not reflect the current market value because it relied upon market value determined in the past. In a declining market, this constitutes a burden to the plan, however, in a rising market the plan (not the separating employee) would benefit from this feature because the employee would receive only historical market value, not the higher current market value. We are not free to rewrite the plan to reallocate that risk.
Here, the terms governing the timing of the valuation of Bankshares’s stock for purposes of ascertaining the fair market value of the stock and the individual ESOP accounts are clear, mandatory, and permit no exception. This court, as in Pratt, cannot rewrite the requirements of the Plan to alleviate the adverse consequences to Bankshares as a result of its allocation of risk.
Defendants’ principal contention is that the Plan administrator’s reliance on § 8.4 supplies a' reasonable basis for its decisions. This general- plan provision requires the Plan administrator to “discharge [his] duties solely in the interest of the Participants” and with the “care, skill, prudence and diligence, under the circumstances then prevailing.” (Plan, § 8.4.) To be sure, the Plan administrator’s rationale is not without intrigue as Dodd’s predic-tio’n of Bankshares’s dire economic circumstances was perceptive. The Plan administrator may have considered the greater financial good for -the largest number of Plan participants by refusing to implement diversification elections based on the 2008 annual valuation. But, even if it is assumed that Bankshares’s intentions were pure, the Plan administrator cannot exercise his fiduciary duties in a manner that eliminates specific and mandatory provisions of the Plan. Under general principles of federal common law, which apply to ERISA plans, “[c]ontract interpretations should, to the extent possible, give effect to all language without rendering any term superfluous, but if both a general and a specific provision apply to the subject at hand, the specific provision controls.” Young v. Verizon’s Bell Atl. Cash Balance Plan, 615 F.3d 808, 823 (7th Cir. 2010). The Plan is specific as to its requirement that the Annual Valuation Date, and no other, governs the fair market value of Bankshares’s stock for purposes of §§ 5.8 and 8.3. The Plan also is specific and clear in stating that the “Annual Valuation Date shall be December 31 of each Plan Year.” (Plan, § 1.36.) Section 8.4, on the other hand, is a general provision that contains no reference to either § 5.8 or § 8.3 and no language that would permit the Plan administrator to make an exception to those provisions’ mandatory terms. The Plan administrator derives no authority from § 8.4, or any other Plan provision, to alter the terms of the Plan or to compromise benefits. (See Plan, ¶ 7.5 (providing that the “Plan Administrator shall have no power to add to, subtract from or modify any of the terms of the Plan, or to change or add to any benefits provided by the Plan ... .”)•) To construe the Plan in the manner urged by Defendants not only contravenes this basic principle of contract interpretation, but also renders the Plan’s mandatory provisions in §§ 5.8 and 8.3 meaningless. See Tapley, 728 F.3d at 1139. Just as the Plan administrator cannot override specific, mandatory terms, courts also “are without license to alter an express, unambiguous provision, even though that provision results in one participant receiving an amount greater than the appraised value of the employer securities .... ” Pratt, 920 F.2d at 662. Finally, the Plan administrator’s interpretation of § 8.4’s. general admonitions as permitting an override of §§ 5.8 and 8.3 sweeps too broadly and potentially could erect an impenetrable barrier against judicial review under the arbitrary and capricious standard. See Burditt v. W. Growers Pension Plan, 636 F.Supp. 1491, 1497 (C.D. Cal. 1986) (“There is no doubt that any denial of benefits will help preserve a pension fund’s financial resources for remaining and future participants. That, however, does not make denial of benefits appropriate in every case. Otherwise, trustee denials of benefits could never be deemed arbitrary and capricious.”), aff'd, 818 F.2d 698 (9th Cir