In Comrie v. IPSCO (7th. Cir. 2/18/11) the Seventh Circuit considered whether a discretion-conferring clause in a SERP plan document should be applied when the plan administrator is not a fiduciary. Noting a difference of opinion on the issue, the Seventh Circuit, via Judge Easterbrook, saw the issue as very simple to resolve:

As for the fact that the administrator of a top-hat plan is not an ERISA fiduciary: One circuit has held that interpretations by a non-fiduciary must be ignored, and that courts must make independent decisions, no matter what a plan’s governing documents say. Goldstein v. Johnson & Johnson, 251 F.3d 433, 442–43 (3d Cir. 2001). Another has adopted an intermediate standard divorced from contractual language. Craig v. Pillsbury Non-Qualified Pension Plan, 458 F.3d 748, 752 (8th Cir. 2006). We don’t get it .

When the Supreme Court held in Firestone Tire & Rubber Co. v. Bruch, 489 U.S. 101 (1989), that judges presumptively make independent decisions (often, though misleadingly, called “de novo review”, see Krolnik v.Prudential Insurance Co., 570 F.3d 841, 843 (7th Cir. 2009)), about claims to benefits under ERISA, it derived this conclusion from an analogy to trust law. The Court understood trust law to call for a non-deferential judicial role. ERISA fiduciaries are like common-law trustees the Justices thought, so judges normally should make independent decisions in ERISA litigation.

In Firestone’s framework, deferential review is exceptional, authorized only when the contracts that establish the pension or welfare plan confer interpretive discretion in no uncertain terms. 489 U.S. at 111. See also, e.g., Diaz v. Prudential Insurance Co., 424 F.3d 635 (7th Cir. 2005)

In the Court’s view, Firestone authorizes deference even though the decision-maker is a fiduciary. Thus, when the contract confers discretion on a non-fiduciary, courts should find it “easier, not harder”, to defer to the decision-maker on contract principles.