In the
 United States Court of Appeals
               For the Seventh Circuit
                          ____________

No. 01-4132
JAMES J. HACKETT,
                                               Plaintiff-Appellant,
                                 v.

XEROX CORPORATION LONG-TERM DISABILITY INCOME PLAN,
XEROX CORPORATE REVIEW DISABILITY PANEL, PLAN
ADMINISTRATOR, for the Xerox Corporation Long-Term
Disability Plan, and HEALTH INTERNATIONAL, INC.,
                                            Defendants-Appellees.
                          ____________
            Appeal from the United States District Court
       for the Northern District of Illinois, Eastern Division.
           No. 00C3140—Charles R. Norgle, Sr., Judge.
                          ____________
   ARGUED OCTOBER 30, 2002—DECIDED JANUARY 6, 2003
                    ____________


 Before FLAUM, Chief Judge, and BAUER and DIANE P.
WOOD, Circuit Judges.
  FLAUM, Chief Judge. James Hackett claims that the
defendants (collectively “Xerox”), who are responsible for
administering Xerox’s Long-Term Disability Plan (“the
Plan”), violated the Employee Retirement Income Secu-
rity Act (“ERISA”), 29 U.S.C. §1001 et seq., when they ter-
minated his long-term disability benefits. The district
court denied Hackett’s motion for summary judgment
and granted Xerox’s motion for summary judgment. Hackett
2                                            No. 01-4132

appeals. For the reasons stated herein, we reverse and
remand to the district court.


                    I. Background
  James Hackett has worked for Xerox since 1985. Hackett
began to suffer from emotional problems in 1986. These
problems were caused by a personality disorder that
made it difficult for him to interact properly with others
in the work environment. After these problems worsened,
Hackett was advised by a Xerox physician to seek dis-
ability benefits under the Xerox Long-Term Disability
Plan. In the process Hackett was examined by his psychia-
trist, Dr. Gerber, who diagnosed Hackett as suffering
from a serious psychiatric condition that prevented him
from doing any type of work. Hackett began receiving
benefits on March 2, 1987.
   Subsequent to the grant of benefits, Xerox encouraged
Hackett to apply for Social Security disability benefits
and those benefits were granted.1 Additionally, in the
first decade following the grant of benefits, Hackett was
examined by numerous experts, all of whom reached the
conclusion that Hackett was unable to work. As a result
of these examinations Hackett’s benefits were continued.
This state of affairs continued until 1998 when Xerox
asked Hackett to be examined by Dr. Holeman. Dr. Hole-
man, after examining Hackett and later reviewing the
prior findings of the other doctors, noted that Hackett
suffered from a personality disorder but found Hackett
able to return to work without restriction. As a result of
Dr. Holeman’s opinion Xerox terminated benefits in Janu-
ary 1999. The reason given for termination was, “Contin-


1
  Because Hackett received payments from Social Security,
Xerox’s liability was reduced.
No. 01-4132                                               3

ued Disability not clinically supported.” Hackett appealed
the termination. Xerox then had Hackett’s medical rec-
ord reviewed by Dr. Wolf, who concluded that Hackett
could return to work, but not in sales. Xerox, based on Dr.
Wolf’s review, denied Hackett’s appeal. The denial of ap-
peal contained the same explanation as the original termi-
nation: “Continued Disability not clinically supported.”
While the review was underway Dr. Gerber sent in a re-
port from an evaluation of Hackett conducted on March
28, 1999. Dr. Wolf reviewed this letter after his initial
determination; but his conclusion did not change. Xerox
advised Hackett of this. This time Xerox listed the reason
for termination as, “Consulting Physician did not concur.”
  Hackett brought suit challenging the termination. The
district court denied Hackett’s motion for summary judg-
ment and then granted Xerox’s motion for summary
judgment. Hackett appeals.


                     II. Discussion
  We review a district court’s grant of summary judgment
de novo. O’Reilly v. Hartford Life & Accident Insurance
Co., 

, 959 (7th Cir. 2001).


a. Standard of Reviewing the Decision to Terminate
   A court reviews a plan administrator’s denial of bene-
fits de novo unless the plan gives the administrator discre-
tionary authority to determine eligibility for benefits.
Firestone Tire & Rubber Co. v. Bruch, 

(1989);
Herzberger v. Standard Ins. Co., 

, 330 (7th Cir.
2000). Where the plan does grant discretionary authority
to the administrator, the court reviews the decision under
the arbitrary and capricious standard. Hess v. Hartford
Life & Accident Ins. Co., 

, 461 (7th Cir. 2001).
4                                                  No. 01-4132

  In 1996 Xerox adopted a new long-term disability plan,
amending its 1977 plan by granting the disability admin-
istrator the sole discretion in determining whether an
employee meets the conditions for receiving benefits. The
parties agree that the 1977 plan contains no language
granting discretionary authority to the plan admini-
strator; they also agree that the 1996 plan explicitly grants
such discretion.2 The disagreement is over which plan
controls the decision to terminate Hackett’s benefits.
   Though we have not directly addressed the question of
how to determine what plan controls a denial or termina-
tion of benefits, our decisions on closely related questions
are instructive. This court has held that there exists a
presumption against the vesting of benefits unless language
in the plan establishes some ambiguity on the issue.
Rossetto v. Pabst Brewing Co., 

, 544 (7th Cir.
2000). If benefits have not vested, the plan participant
does not have an unalterable right to those benefits. The
fact that benefits have not vested suggests that the plan
is malleable and the employer is at liberty to change the
plan and thus change the benefits to which a participant
is entitled. Since the employer can change the plan, then it
must follow that the controlling plan will be the plan that
is in effect at the time a claim for benefits accrues. See, e.g.,
Grosz-Salomon v. Paul Revere Life Insurance Co., 

, 1159 (9th Cir. 2001) (applying this logic and reaching
the same conclusion). We have held that a claim accrues
at the time benefits are denied. Daill v. Sheet Metal Work-
ers’ Local 73 Pension Fund, 

, 65 (7th Cir. 1996).
Therefore, absent any language suggesting ambiguity on


2
  The 1996 plan reads: “The determination of whether an Employ-
ee has incurred a covered disability and has complied with all
of the conditions for receiving, and continuation of, benefits
shall be made by either the Medical Case Manager or the Dis-
ability Administrator, as appropriate, in its sole discretion.”
No. 01-4132                                               5

the vesting question, the controlling plan must be the plan
in effect at the time the benefits were denied.
   Hackett claims that the original plan contains language
that overrides the presumption against vesting. He there-
fore argues that his right to benefits did in fact vest
prior to the 1996 plan. He supports this claim by refer-
ence both to the 1977 plan and a 1987 personnel man-
ual. Hackett correctly notes that the 1977 plan makes
clear that it cannot be amended in a way that would
“diminish any rights accrued for the benefit of the partici-
pants prior to the effective date of the amendment.” But
this does not add support to Hackett’s arguments. Rights
to benefits do not accrue prospectively. Hackett did not,
upon initial determination of eligibility, accrue a right
to benefits indefinitely; instead his right to those bene-
fits accrues as the payments become due. Cf. Arndt v.
Security Bank S.S.B. Employees’ Pension Plan, 

(7th Cir. 1999). As a result the provision referenced
by Hackett in this context only says that no amendment
shall require Hackett to return benefits he has already
received or alter benefits for which the payments have
become due. For example if Xerox failed to send Hackett
his benefit check in September, they could not pass an
amendment in November reducing his benefits for Sep-
tember—his benefits for September had already accrued;
on the other hand Xerox is free to amend the policy in
November to change Hackett’s benefits for the following
January. As for the 1987 personnel manual, Hackett has
provided nothing to support the argument that the man-
ual was a plan instrument; as such it is irrelevant to the
inquiry here.
  Therefore, the 1996 policy controls the termination of
Hackett’s benefits. That policy grants the plan admin-
istrator discretion and we review the termination under
the arbitrary and capricious standard.
6                                              No. 01-4132

b. The Decision to Terminate
  Review under the deferential arbitrary and capricious
standard is not a rubber stamp and deference need not
be abject. 

. Even under the deferen-
tial review we will not uphold a termination when there
is an absence of reasoning in the record to support it.
The termination decision here is just such a decision.
  In reviewing the termination of benefits, we have noted
that “ERISA requires that specific reasons for denial be
communicated to the claimant and that the claimant be
afforded an opportunity for ‘full and fair review’ by the
administrator.” Halpin v. W.W. Grainger, 

,
688-89 (7th Cir. 1992). We have further noted that sub-
stantial compliance is sufficient to meet this requirement.

  Whether termination procedures substantially com-
plied is a fact-intensive inquiry guided by the question of
whether the beneficiary was provided with a statement
of reasons that allows a clear and precise understanding
of the grounds for the administrator’s position sufficient
to permit effective review. 

and 694. In Halpin
we explained that to meet this standard of substantial
compliance “the administrator must weigh the evidence
for and against [the denial or termination of benefits],
and within reasonable limits, the reasons for rejecting
evidence must be articulated if there is to be meaning-
ful appellate review.” 

(internal quotations omit-
ted).
   Applying this standard to Hackett’s case makes clear
that the termination procedures were arbitrary and capri-
cious. After twelve years of paying out disability bene-
fits, Xerox terminated those benefits simply on the basis
of an examination by Dr. Holeman, whose conclusion
that Hackett was able to work was contrary to numerous
prior opinions. Dr. Holeman provided no explanation for his
No. 01-4132                                                        7

departure from the opinions of the previous doctors, and
Xerox provided no explanation for believing Dr. Hole-
man’s opinion over the opinions of the previous doctors.
There was no weighing of the evidence for and against, and
there were no articulated reasons given for Xerox’s rejec-
tion of the evidence that Hackett was unable to work.
Conclusions without explanation do not provide the requi-
site reasoning and do not allow for effective review. 

We are left without explanation as to why Dr.
Holeman’s opinion is different from Dr. Gerber’s. Had Dr.
Holeman referenced the previous opinions and explained
his deviation from them, we could have readily reviewed
this case. Any non-arbitrary explanation could show that
he had weighed the evidence for and against. We could,
therefore, assume that any decision by the administrator
took these factors into consideration.3


c. Remand
   Having concluded that the denial of Hackett’s benefits
was reached in an arbitrary and capricious manner, we
must proceed to determine the appropriate remedy though
neither party addressed this issue. The question is wheth-
er we should remand the case to the plan administra-
tor for further hearings or remand to the district court
with instruction to retroactively reinstate Hackett’s bene-
fits. In answering this question a distinction must be
noted between a case dealing with a plan administrator’s
initial denial of benefits and a case where the plan admin-
istrator terminated benefits to which the administrator
had previously determined the claimant was entitled.


3
  Alternatively Xerox likely could have met the standard of
substantial compliance despite the lack of reasoning in Dr. Hole-
man’s opinion had they provided a non-arbitrary explanation for
their decision to credit his opinion over those of the other doctors.
Unfortunately that too is missing from the record.
8                                              No. 01-4132

Compare Wolfe v. J.C. Penney Co., Inc., 

, 393-
94 (7th Cir. 1983) (remanding to the administrator for
new hearing where initial denial of benefits was not pro-
cedurally adequate) with 

(affirm-
ing district court’s reinstatement of plan benefits where
termination was not procedurally adequate). The distinc-
tion focuses on what is required in each case to fully rem-
edy the defective procedures given the status quo prior
to the denial or termination. See Quinn v. Blue Cross and
Blue Shield Ass’n, 

(7th Cir. 1998).
   In a case where the plan administrator did not af-
ford adequate procedures in its initial denial of benefits,
the appropriate remedy respecting the status quo and
correcting for the defective procedures is to provide the
claimant with the procedures that she sought in the
first place. 

. If the claimant pre-
vails on remand before the plan administrator, then the
claimant would be entitled to retroactive benefits from
the time at which the initial denial occurred. 

the court is not in the place to make the determina-
tion of entitlement to benefits. The court must not substi-
tute its own judgment for that of the administrator. 

; see also Gallo v. Amoco Corp., 

, 923 (7th Cir. 1996). The fact that the plan administra-
tor failed to provide the adequate procedures does not
mean that the claimant is automatically entitled to
benefits—such a holding might provide the claimant “with
an economic windfall should she be determined not disabled
upon a proper reconsideration.” 

.
  On the other hand are cases where the plan administra-
tor terminated benefits under defective procedures. In
these cases the status quo prior to the defective proce-
dure was the continuation of benefits. Remedying the
defective procedures requires a reinstatement of benefits.
Thus in Halpin we affirmed the district court’s reinstate-
ment of benefits where the plan administrator had arbi-
No. 01-4132                                                  9

trarily and capriciously terminated benefits. Halpin, 962
F2d at 697. In doing so we distinguished Halpin from cases
dealing with an initial denial of benefits. 

was explained further in Quinn. There we dealt with an
administrator’s denial of continuing benefits where under
the plan the benefits automatically terminated unless the
administrator, after reviewing a claim for continuance,
found that continuation was proper. In remanding the case
to the administrator we distinguished the case from Halpin:
“Unlike Halpin . . . Quinn was not scheduled to continue
receiving benefits under the program.” 

; see also Schleibaum v. Kmart Corp., 

, 503
(7th Cir. 1998) (“A remand was not necessary in [Halpin]
because the administrator had previously determined
that the claimant was eligible for benefits.”) and 504
(“[R]einstatement under Halpin was not necessarily
appropriate because Mr. Schleibaum had never been
adjudged eligible for continuation of his life insurance
benefits in the first place.”). We noted in Quinn that rein-
statement was appropriate in cases that, like Halpin,
“involve claimants who were receiving disability benefits,
and, but for their employers’ arbitrary and capricious
conduct, would have continued to receive the benefits.”

. Hackett’s case is just such a
case—completely indistinguishable from Halpin. Hackett
had been previously determined to be disabled, and his
benefits would have continued unaltered but for the plan
administrator’s arbitrary and capricious conduct.
  From a practical point of view this distinction makes
perfect sense. Hackett’s termination was the result of
arbitrary and capricious procedures, and therefore his
benefits could not have been terminated by those proce-
dures. While a remand to the plan administrator may re-
sult in a finding that Hackett is no longer disabled, it
cannot result in a finding that the procedures in 1999
were anything other than arbitrary and capricious. There-
fore nothing in the administrator’s decision could render
10                                                  No. 01-4132

Hackett’s benefits retroactively terminated. The best the
administrator could do is terminate Hackett’s benefits
on a going forward basis. This, of course, can be accom-
plished just as easily by initiating a new review of Hack-
ett’s eligibility for benefits, which the administrator is
free to do after reinstatement of Hackett’s benefits. In-
deed nothing in this opinion should be read as expressing
an opinion that Hackett’s benefits should not be terminated
in the future. We only address the issue of the procedures
necessary for such termination to accord with the statutory
requirement. Had Dr. Holeman explained his reasons
for disagreeing with Dr. Gerber, this appeal might likely
have been unnecessary and the termination might very
well have passed the arbitrary and capricious test.
  Therefore we find that the appropriate remedy is to
remand to the district court with instruction to order
retroactive reinstatement of benefits and resolve all
other collateral issues.


                       III. Conclusion
  The proper standard for reviewing the plan administra-
tor’s termination of Hackett’s benefits was the arbitrary
and capricious standard. Because the termination was
arbitrary and capricious the district court erred in deny-
ing Hackett’s motion for summary judgment and in
granting Xerox’s motion for summary judgement. We
therefore REVERSE the denial of Hackett’s motion for
summary judgment and the grant of Xerox’s motion for
summary judgment and REMAND to the district court
with instructions to reinstate Hackett’s benefits and to
resolve all other collateral issues.4



4
 Hackett also raises challenges to the denial of various discovery
motions. Our holding today renders those challenges moot.
No. 01-4132                                        11

A true Copy:
      Teste:

                   ________________________________
                   Clerk of the United States Court of
                     Appeals for the Seventh Circuit




               USCA-02-C-0072—1-6-03