FOR PUBLICATION
  UNITED STATES COURT OF APPEALS
       FOR THE NINTH CIRCUIT

JERRY VAUGHN; THERESA TRAVERS,           
               Plaintiffs-Appellants,
                                               No. 05-17100
                 v.
                                                 D.C. No.
BAY ENVIRONMENTAL MANAGEMENT,
INC.; PINA J. BARBIERI; CAESAR               CV-03-05725-MJJ
                                                ORDER AND
NUTI; DENNIS VARNI; FSC
                                                 AMENDED
SECURITIES CORPORATION; JERROLD
                                                  OPINION
N. WEINBERG,
              Defendants-Appellees.
                                         
        Appeal from the United States District Court
          for the Northern District of California
         Martin J. Jenkins, District Judge, Presiding

                  Argued and Submitted
          May 12, 2008—San Francisco, California

                   Filed September 19, 2008
                    Amended June 4, 2009

      Before: Betty B. Fletcher and Pamela Ann Rymer,
         Circuit Judges, and Kevin Thomas Duffy,*
                    Senior District Judge.

                 Opinion by Judge B. Fletcher




  *The Honorable Kevin Thomas Duffy, Senior United States District
Judge for the Southern District of New York, sitting by designation.

                               6691
        VAUGHN v. BAY ENVIRONMENTAL MANAGEMENT      6695




                      COUNSEL

Teresa S. Renaker, Lewis Feinberg Lee Renaker & Jackson,
P.C., Oakland, California, for the plaintiffs-appellants.
6696     VAUGHN v. BAY ENVIRONMENTAL MANAGEMENT
Nicole A. Diller (argued), D. Ward Kallstrom, Andrew C.
Sullivan, Morgan Lewis & Bockius, LLP, San Francisco, Cal-
ifornia, for defendants-appellees Bay Environmental Inc.,
Caesar Nuti, and Dennis Varni.

Bernard Gehlhar (argued), James D. Boughey, Reina G.
Minoya, Wilson Elser Moskowitz Edelman & Dicker, LLP,
San Francisco, California, for defendants-appellees FSC
Securities Corp. and Jerrold N. Weinberg.

Elizabeth Hopkins, U.S. Dep’t of Labor, Washington, D.C., as
amicus curiae supporting plaintiffs-appellants.


                           ORDER

   The opinion filed on September 19, 2008 and appearing at

(9th Cir. 2008), is amended as follows. At 

, delete the paragraph in Section II and substitute
the following paragraph in its stead:

       Although the district court dismissed the case for
    lack of subject matter jurisdiction, a dismissal for
    lack of statutory standing is properly viewed as a
    dismissal for failure to state a claim rather than a dis-
    missal for lack of subject matter jurisdiction. See
    Lanfear v. Home Depot, Inc., 

, 1221-
    22 (11th Cir. 2008) (clarifying that statutory standing
    under ERISA is a question of merits rather than sub-
    ject matter jurisdiction); Harzewski v. Guidant
    Corp., 

, 803-04 (7th Cir. 2007) (same).
    Because we review dismissals under both Rule
    12(b)(1) and Rule 12(b)(6) de novo, see Rhoades v.
    Avon Prods., Inc., 

, 1156 (9th Cir.
    2007), the district court’s error does not affect the
    result in this case. We accept all facts alleged in the
    First Amended Complaint as true. See id.; see also
           VAUGHN v. BAY ENVIRONMENTAL MANAGEMENT                  6697
     LaRue v. DeWolff, Boberg & Assocs., Inc., 553 U.S.
     ___, 

, 1024 (2008) (“As the case
     comes to us we must assume that respondents
     breached fiduciary obligations defined in [ERISA]
     § 409(a), and that those breaches had an adverse
     impact on the value of the plan assets in petitioner’s
     individual account.”).

  The mandate shall issue forthwith.


                              OPINION

B. FLETCHER, Circuit Judge:

   This case requires us to consider whether a former
employee who has received a full distribution of his or her
account balance under a defined contribution pension plan has
standing as a plan participant to file suit under the Employee
Retirement Income Security Act of 1974 (ERISA), 29 U.S.C.
§ 1001 et seq., to recover losses occasioned by a breach of
fiduciary duty that allegedly reduced the amount of his or her
benefits. We join the First, Third, Fourth, Sixth, Seventh, and
Eleventh Circuits, and hold that these former employees have
standing to bring their claims.1 Accordingly, we vacate the
district court order dismissing the action for lack of subject
matter jurisdiction, and remand for further proceedings.

                                   I

  Jerry Vaughn and Theresa Travers (“Vaughn”) are former
  1
    See Lanfear v. Home Depot, Inc., ___ F.3d ___, No. 07-14362, 

(11th Cir. July 31, 2008); Evans v. Akers, 

(1st
Cir. 2008); In re Mutual Funds Inv. Litig., 

(4th Cir. 2008);
Bridges v. Am. Elec. Power Co., 

(6th Cir. 2007); Graden v.
Conexant Sys. Inc., 

(3d Cir. 2007); Harzewski v. Guidant
Corp., 

(7th Cir. 2007).
6698        VAUGHN v. BAY ENVIRONMENTAL MANAGEMENT
employees of Bay Environmental Management Inc. (“Bay
Environmental”) who participated in two types of ERISA-
governed retirement plans offered by the company (“Plans”).
The first, referred to as the “Pension Plan,” was funded solely
by the discretionary contributions of Bay Environmental. The
second, known as the “Retirement Plan,” consisted of both a
profit-sharing component and a 401(k) component. Both
Plans were individual account plans, also known as defined
contribution plans.2 All Plan investments were chosen by the
Plan trustees and investment advisors except for the 401(k)
component of the Retirement Plan, which was directed by the
Plan participants.

  In 2000 or early 2001, Republic Services, Inc. purchased
Richmond Sanitary Services, Inc. (“RSS”), of which Bay
Environmental was an affiliate. At around this same time, the
Trustees of the Plans voted to terminate the Plans. On or
about April 13, 2001, Bay Environmental notified its employ-
ees that the Plans would be terminated effective April 30,
2001. In August 2001, the Trustees transferred all non-
participant-directed plan assets to money market funds. Sub-
sequently, in the year 2002, Plan participants received a lump-
sum distribution of the value of their individual accounts.

   On December 18, 2003, Vaughn filed suit on behalf of him-
self and all similarly-situated individuals.3 He named Bay
Environmental and the Plans’ Trustees as defendants, alleging
that Defendants breached their fiduciary duties by investing
  2
      Defined contribution plans “provide[ ] for an individual account for
each participant and for benefits based solely upon the amount contributed
to the participant’s account, and any income, expenses, gains and losses
. . . which may be allocated to such participant’s account.” ERISA § 3(34),
29 U.S.C. § 1002(34). Because the benefits received under a defined con-
tribution plan are determined in part by the rate of return on investments
made by the plan, a plan’s chosen investments can have a substantial
impact on the account balance.
    3
      The district court never considered Vaughn’s motion for class certifica-
tion because it held that he did not have standing to bring the suit.
           VAUGHN v. BAY ENVIRONMENTAL MANAGEMENT                  6699
the Plans’ assets imprudently. Specifically, Vaughn alleged
that Defendants knew or should have known that the purchase
of Bay Environmental by RSS would likely result in the ter-
mination of the Plans and that Defendants should have trans-
ferred the non-participant-directed plan assets to money
market funds sooner in light of the Plans’ shortened invest-
ment horizon. Vaughn sought relief in the form of a declara-
tion that Defendants had breached their fiduciary duties, a
preliminary injunction prohibiting distribution of the individ-
ual Defendants’ Plan accounts, and the establishment of a suc-
cessor trust for benefits owed to the Plans, benefits to be paid
by the Defendants.

   On March 14, 2005, after the parties failed to mediate the
dispute, Vaughn filed his First Amended Complaint, adding
the Plans’ investment advisors, FSC Corporation and Jerrold
N. Weinberg (“FSC Defendants”), as defendants.4 Vaughn
also added a second claim for relief alleging that Bay Envi-
ronmental further breached its fiduciary duties by failing to
conduct an adequate investigation before selecting the invest-
ment advisors or to monitor the performance of the Plans’
investments and investment advisors.

   On July 22, 2005, the FSC Defendants filed a motion to
dismiss for lack of subject matter jurisdiction arguing that
Vaughn lacked statutory standing under ERISA. Specifically,
they claimed that Vaughn failed to allege sufficient facts to
bring him within ERISA’s definition of “participant.” See 29
U.S.C. § 1002(7) (defining “participant” as “any employee or
former employee of an employer . . . who is or may become
eligible to receive a benefit of any type from an employee
benefit plan which covers employees of such employer . . . or
whose beneficiaries may become eligible to receive any such
benefit”).
  4
   Subsequent references to “Defendants” include both the original defen-
dants and the FSC Defendants.
6700       VAUGHN v. BAY ENVIRONMENTAL MANAGEMENT
   The district court granted the FSC Defendants’ motion to
dismiss on September 26, 2005. The court concluded that
Vaughn was not a participant because he had received a lump-
sum distribution of his individual account balance and was
therefore not entitled to additional benefits under the plan.
Vaughn timely appealed.5

                                   II

   Although the district court dismissed the case for lack of
subject matter jurisdiction, a dismissal for lack of statutory
standing is properly viewed as a dismissal for failure to state
a claim rather than a dismissal for lack of subject matter juris-
diction. See Lanfear v. Home Depot, Inc., 

,
1221-22 (11th Cir. 2008) (clarifying that statutory standing
under ERISA is a question of merits rather than subject matter
jurisdiction); Harzewski v. Guidant Corp., 

, 803-
04 (7th Cir. 2007) (same). Because we review dismissals
under both Rule 12(b)(1) and Rule 12(b)(6) de novo, see
Rhoades v. Avon Prods., Inc., 

, 1156 (9th Cir.
2007), the district court’s error does not affect the result in
this case. We accept all facts alleged in the First Amended
Complaint as true. See id.; see also LaRue v. DeWolff, Boberg
& Assocs., Inc., 553 U.S. ___, 

, 1024 (2008)
(“As the case comes to us we must assume that respondents
breached fiduciary obligations defined in [ERISA] § 409(a),
and that those breaches had an adverse impact on the value of
the plan assets in petitioner’s individual account.”).

                                  III

  [1] ERISA § 404(a) imposes a “[p]rudent man standard of
care” on plan fiduciaries. 29 U.S.C. § 1104(a). This standard
requires that the fiduciary discharge her duties “with the care,
skill, prudence, and diligence under the circumstances then
  5
   On appeal, the Secretary of Labor appeared as amicus curiae in support
of Vaughn.
          VAUGHN v. BAY ENVIRONMENTAL MANAGEMENT            6701
prevailing [of] a prudent man acting in like capacity . . . .” 29
U.S.C. § 1104(a)(1)(B). It also requires the fiduciary to “di-
versify[ ] the investments of the plan so as to minimize the
risk of large losses, unless under the circumstances it is
clearly prudent not to do so.” 29 U.S.C. § 1104(a)(1)(C). A
plan fiduciary who breaches her fiduciary duties “shall be per-
sonally liable to make good to such plan any losses to the plan
resulting from each such breach.” ERISA § 409(a), 29 U.S.C.
§ 1109(a).

   [2] ERISA § 502 provides for a civil action by a plan par-
ticipant “for appropriate relief” for a breach of fiduciary duty.
29 U.S.C. § 1132(a)(2). Under the statute, “ ‘participant’
means any employee or former employee of an employer . . .
who is or may become eligible to receive a benefit of any type
from an employee benefit plan which covers employees of
such employer . . . .” 29 U.S.C. § 1002(7). The Supreme
Court has interpreted this section as conferring standing on
former employees who “have a reasonable expectation of
returning to covered employment or . . . a colorable claim to
vested benefits.” Firestone Tire & Rubber Co. v. Bruch, 

, 117 (1989) (original alterations and quotation omit-
ted). In contrast, former employees do not have standing if a
successful suit would result in a damage award that was not
for benefits due under the plan. Kuntz v. Reese, 

, 1411 (9th Cir. 1986) (per curiam) (“Kuntz II”); see also
Mass. Mut. Life Ins. Co. v. Russell, 

, 148 (1985)
(holding that ERISA § 409(a) does “not provide . . . a cause
of action for extra-contractual damages caused by improper or
untimely processing of benefit claims”).

   [3] In concluding that Vaughn lacked standing, the district
court first rejected his argument that Kuntz did not apply
because Bay Environmental’s Plans were defined contribution
plans, whereas the plan in Kuntz was a defined benefit plan.
In so doing, the district court noted that the Ninth Circuit has
not distinguished between the two types of plans and that two
district courts have applied Kuntz to defined contribution
6702     VAUGHN v. BAY ENVIRONMENTAL MANAGEMENT
plans. The court also noted that Vaughn’s claim was not for
an ascertainable amount of improperly calculated benefits, but
rather alleged imprecise financial losses due to imprudent
investment, and concluded that neither of the recognized
exceptions to Kuntz applied because Vaughn did not allege
self-dealing and the case did not involve an annuity. The court
thus concluded that under Kuntz, former employees who have
received a lump sum distribution of their individual accounts
are seeking damages for breach of fiduciary duty, not vested
benefits, and do not have standing as participants under
ERISA.

   [4] Contrary to the district court’s order, Kuntz does not
control this case. The Kuntz plaintiffs sued their former
employer for breach of fiduciary duty alleging that the
employer had misrepresented the benefits that would be paid
under a defined benefit plan. Kuntz v. Reese, 

,
929 (9th Cir. 1985) (“Kuntz I”), vacated by Kuntz II, 

. On rehearing, we held that the Kuntz plaintiffs were not
“participants” within the meaning of ERISA § 3(7), 29 U.S.C.
§ 1002(7), because “if successful, [their] claim would result in
a damage award, not an increase of vested 

. Importantly, the Kuntz plaintiffs conceded that they
had received all of the benefits due to them under the plan.
They alleged only that they would not have participated in the
plan but-for the defendant’s misrepresentations about the
amount of benefits they would receive. Kuntz 

.

   [5] In contrast, Vaughn alleges that he has not received all
of the benefits due to him under the Plans. Although he
received a lump-sum distribution of the value of his individ-
ual accounts, he claims that he did not receive a “full” distri-
bution because his accounts contained less than they would
have if the fiduciaries had not breached their duty of prudent
investment. Because Vaughn alleges that he did not receive
everything that was due to him under the Plan, he has stand-
           VAUGHN v. BAY ENVIRONMENTAL MANAGEMENT                    6703
ing, even under Kuntz.6 See Kuntz 

(quot-
ing Joseph v. New Orleans Elec. Pension & Ret. Plan, 

, 630 (5th Cir. 1985) (holding that “retirees who have
accepted the payment of everything due them in a lump sum”
do not have standing (emphasis added))); see also 

(distinguishing LaRue’s claim from that of the
plaintiff in Russell because the latter “received all of the bene-
fits to which she was contractually entitled”); Harzewski v.
Guidant Corp., 

, 806 (7th Cir. 2007) (noting that
the Kuntz plaintiffs “were not suing to enforce any entitlement
created by the plan” and that the result might have been dif-
ferent if the Kuntz plaintiffs had argued that the representa-
tions were the plan).

   [6] The district court also erred by denying Vaughn stand-
ing on the basis that his claim is not for an ascertainable
amount of improperly computed benefits. The requirement
that a claim be to correct a miscomputation of benefits comes
from Kuntz, a defined benefit plan case. 

.
Under a defined benefit plan, benefits are determined by
applying a “formula that takes into account factors such as
final salary and years of service with the employer.” Pension
Benefit Guar. Corp. v. LTV Corp., 

, 637 n.1
(1990) (citing 29 U.S.C. § 1321). Thus, a plan fiduciary could
improperly compute benefits by not applying the correct for-
mula or using incorrect values. In contrast, there is no formula
involved in calculating benefits under a defined contribution
plan—the benefits payable are determined by the “amount
contributed to the participant’s account, and any income,
expenses, gains and losses, and any forfeitures of accounts of
other participants which may be allocated to such partici-
  6
    Plaintiffs argue that Kuntz should not apply in cases involving defined
contribution plans. We decline to decide that question because Kuntz does
not affect Plaintiffs’ standing in this case. We note, however, that the
Supreme Court has recently directed that cases involving defined benefit
plans are not necessarily controlling in cases involving defined contribu-
tion plans. See 

.
6704      VAUGHN v. BAY ENVIRONMENTAL MANAGEMENT
pant’s account.” 29 U.S.C. § 1002(34). Because there is no
formula involved in determining the benefits due under a
defined contribution plan, Kuntz’s requirement that a claim be
to correct for an miscomputation of benefits is inapplicable.

   [7] Moreover, we have never required that the claim be for
an “ascertainable amount.”7 We decline to determine whether
we should apply such a requirement, because in this case, the
amount sought is ascertainable, despite the fact that it is not
readily apparent on the face of the First Amended Complaint.
Vaughn seeks the difference between the benefit he received
and what he would have received if the Plans’ assets had been
prudently invested. This amount is ascertainable through
expert testimony or other evidence regarding investment
returns during the relevant period. See 

; cf. Cal. Ironworkers Field Pension Trust v. Loomis
Sayles & Co., 

, 1046-47 (9th Cir. 2001)
(upholding district court’s decision to rely on a “benchmark
yield as an approximation of what the improperly invested
funds would have earned if properly invested”).

   [8] Finally, we turn to the district court’s conclusion that
the recognized exceptions to Kuntz are inapplicable to this
case. While the district court was correct that Kayes v. Pacific
Lumber Co., 

(9th Cir. 1995), is inapplicable
because it dealt with a statutory exception not at issue here,
the district court erred in distinguishing Amalgamated Cloth-
ing & Textile Workers Union, AFL-CIO v. Murdock, 

(9th Cir. 1988). Although Vaughn does not allege self-
dealing, the reasoning of Murdock supports the conclusion
that Vaughn has standing to bring this suit. In Murdock we
held that the plaintiffs had standing despite the fact that they
had received all of their actuarially vested benefits under an
  7
   This requirement comes from two Fifth Circuit cases, Yancy v. Am.
Petrofina, Inc., 

(5th Cir. 1985), and Sommers Drug Stores
Co. Employee Profit Sharing Trust v. Corrigan, 

(5th Cir.
1989).
           VAUGHN v. BAY ENVIRONMENTAL MANAGEMENT                      6705
ERISA employee benefit plan. In support of our holding we
noted that the Murdock plaintiffs, unlike those in Kuntz,
sought equitable relief. 

. Next, we
reasoned that “granting plaintiffs standing to seek a construc-
tive trust remedy . . . is the only means available to give effect
to the goals of ERISA,” including the “overriding goal[ ] of
. . . prevent[ing] the misuse and mismanagement of plan
assets by fiduciaries.” 

473 U.S. at 140-43
& n.8). One way in which Congress sought to achieve that
goal was to impose a statutory duty of loyalty on plan fidu-
ciaries. See 

(distinguishing this core duty from the
regulatory requirement at issue in Kuntz). We reasoned that
these considerations counseled in favor of permitting the
establishment of a constructive trust in which the ill-gotten
profits would be deposited. We directed that the contents of
the trust should be considered “equitably vested benefits” and
“the plan should be viewed as continuing to exist for the pur-
pose of distributing the equitably vested benefits.” 

Accordingly, we held that plaintiffs had standing under
ERISA. 

the plaintiffs in Murdock, Vaughn seeks an equita-
ble remedy, the establishment of a trust for benefits owing to
the Plan participants. More importantly, his claim is based on
an allegation that the Plans’ fiduciaries mismanaged the
Plans’ assets and, in so doing, breached their statutorily-
imposed fiduciary duties. In this sense, Vaughn’s claim is
similar to that of the Murdock plaintiffs and Murdock’s
rationale—that ERISA’s goals can be effectuated only if
plaintiffs have standing—applies.

   [10] Our holding that Vaughn has standing is consistent
with that of every Circuit Court of Appeals to have considered
the issue to date.8 The leading case on this issue is the Seventh
  8
    All of these cases were decided after the district court issued its order
in the present case. The district court made its decision without the benefit
of these appellate courts’ reasoning.
6706       VAUGHN v. BAY ENVIRONMENTAL MANAGEMENT
Circuit case Harzewski v. Guidant Corp. The Harzewski
plaintiffs were former employees who had cashed out their
individual accounts under a defined contribution 

. They brought suit for breach of fiduciary duty,
alleging that the pension plan fiduciaries acted imprudently by
not disposing of certain stock that the fiduciaries knew was
overvalued as a result of fraud by the company’s manage-
ment. See 

The district court dismissed the com-
plaint for lack of standing, concluding that the plaintiffs were
not participants because they had already received the full
benefit available to them under the plan. 

   The Seventh Circuit reversed, reasoning that if the plan
documents, in conjunction with the statutory requirements of
ERISA, entitle the former employee to the relief sought, the
suit is for benefits and the plaintiff has standing. 

A plaintiff seeking extra-contractual damages, on the other
hand, does not have standing. 

“[t]he benefit in
a defined-contribution pension plan is . . . whatever is in the
retirement account when the employee retires or whatever
would have been there had the plan honored the employee’s
entitlement, which includes an entitlement to prudent manage-
ment,” the Seventh Circuit concluded that a lawsuit to recover
benefits lost as a result of plan mismanagement was a suit for
benefits and not for damages. 

   Since Harzewski was decided, five other circuits have held
that former employees who have cashed out their individual
accounts but allege that they are entitled to additional benefits
as a result of a breach of fiduciary duty have standing as “par-
ticipants” under ERISA, see 

, and the
Supreme Court has cited the Seventh Circuit case with
approval, see 

n.6.9 This subsequent
  9
    LaRue does not control the outcome of this case because it did not
address the meaning of “participant” or the distinction between benefits
and damages. It is nevertheless helpful in several respects. First, it estab-
lishes that precedent from cases involving defined benefit plans is not
           VAUGHN v. BAY ENVIRONMENTAL MANAGEMENT                     6707
activity further persuades us that our holding is correct. Nev-
ertheless, we briefly address Defendants’ additional argu-
ments in support of their position that Vaughn is not a
“participant” within the meaning of ERISA.

   [11] First, the fact that Vaughn did not assert a claim for
benefits under ERISA § 502(a)(1)(B), 29 U.S.C.
§ 1132(a)(1)(B), is not an admission that his claim is not for
benefits. That provision provides that “[a] civil action may be
brought . . . by a participant . . . to recover benefits due to him
under the terms of his plan . . . .” 

claims under ERISA § 502(a)(2) can be brought against any
fiduciary, “the defendant [in an action brought under
§ 502(a)(1)(B)] is the plan itself (or plan administrators in
their official capacities only).” 

(cita-
tion omitted); accord Everhart v. Allmerica Fin. Life Ins. Co.,

, 754 (9th Cir. 2001) (citations omitted). In this
case, the Plans no longer exist and the allegedly imprudent

automatically applicable in cases involving defined contribution plans. See

. Second, it specifically distinguished LaRue’s
claim from that of the Russell plaintiff because the latter “received all of
the benefits to which she was contractually entitled.” 

Third,
the Court rejected the employer’s argument that the distribution rendered
the case moot and cited Harzewski for the proposition that a “plan ‘partici-
pant,’ as defined by § 3(7) of ERISA, 29 U.S.C. § 1002(7), may include
a former employee with a colorable claim for benefits.” 

n.6.
It follows from the conclusion that LaRue’s claim is not moot that he has
standing as a former employee with a colorable claim for benefits. See
U.S. Parole Comm’n v. Geraghty, 

, 397 (1980) (“[M]ootness
[is] the ‘doctrine of standing set in a time frame: The requisite personal
interest that must exist at the commencement of the litigation (standing)
must continue throughout its existence (mootness).’ ” (quoting Henry
Monaghan, Constitutional Adjudication: The Who and When, 82 Yale L.J.
1363, 1384 (1973))). However, because this statement is found in a foot-
note and the Court stated that the “withdrawal of funds from the Plan may
have relevance to the proceedings on remand” without indicating what that
relevance might be, we decline to read LaRue as dispositive on the ques-
tion of standing. But see In re Mutual Fund Inv. 

(treating LaRue as controlling).
6708       VAUGHN v. BAY ENVIRONMENTAL MANAGEMENT
investments were the result of actions by the trustees and
investment advisors, not the plan administrator. As a result,
Vaughn could not have brought an action under
§ 502(a)(1)(B) because the proper defendants could not have
been named under that subsection.

   [12] Second, ERISA’s definition of “accrued benefit” does
not defeat Vaughn’s claim. Vaughn does not deny that he
received his “accrued benefit,” defined as “the balance of the
individual’s account.” 29 U.S.C. § 1002(23)(B). He argues,
however, that as a result of the fiduciary breach, the accrued
benefit was not the full benefit due. Accordingly, the defini-
tion of “accrued benefit” is irrelevant to the disposition of this
case.

   [13] Third, Defendants’ reliance on the Department of
Labor’s regulation, 29 C.F.R. § 2510.3-3(d)(2)(ii)(B), is mis-
placed.10 The regulation’s purpose is to clarify whether a plan
is subject to ERISA. It does not purport to provide an all-
purpose definition of “participant.” See Gilbert v. Alta Health
& Life Ins. Co., 

, 1303 (11th Cir. 2001) (noting
that the regulation “does not speak to the . . . issue of who
may or may not be a . . . participant of a plan once it is
deemed an ERISA plan”). Accordingly, “this regulation has
no relevance to the issue at hand.” 

Mertens v. Hewitt Assocs., 

(1993), and Ariz. State Carpenters Pension Trust Fund v. Citi-
bank, 

(9th Cir. 1997), do not stand for the prop-
osition that payments by a fiduciary to a plan under ERISA
§ 409 cannot constitute benefits. Although both opinions use
the word “damages” to describe the award sought, neither
  10
    The regulation states that “[a]n individual is not a participant covered
under an employee pension plan . . . if . . . [t]he individual has received
from the plan a lump-sum distribution . . . of cash or other property which
represents the balance of his or her credit under the plan.” 29 C.F.R.
§ 2510.3-3(d)(2)(ii)(B).
           VAUGHN v. BAY ENVIRONMENTAL MANAGEMENT                  6709
case considered the distinction between benefits and damages.
Accordingly, these cases are irrelevant to the one at hand. See
Sommers Drug 

(noting that although
“benefits” and “damages” are mutually exclusive for purposes
of determining whether a former employee is a participant in
an ERISA plan, the terms have overlapping meaning).

   [15] Fifth, we reject Defendants’ contention that even if
Vaughn’s claim were for benefits, it would not be for vested
benefits. It is true that the Supreme Court in Firestone
required that former employees “have a colorable claim to
vested 

(emphasis added and quota-
tion omitted). But we agree with the Seventh Circuit that “in
context[,] it is apparent that all the Court meant was that the
former employee had to have an entitlement—had to show
that had it not been for the trustees’ breach of their fiduciary
duty he would have been entitled to greater benefits than he
received.” 

. Under this reading,
money not in the account at the time of distribution is still a
“vested benefit” if the plaintiff is entitled to it.

   [16] Finally, we reject Defendants’ suggestion that the
terms of the Retirement Plan preclude Vaughn’s claim.11 The
Plan summary outlines two situations that might have an
effect on the contributions made to an account or to an indi-
vidual’s further participation in the Plans. Defendants rely on
the section stating that if an individual’s employment is termi-
nated, she “will receive no further benefits.” This provision is
not applicable, however, because the distributions resulted
from the termination of the Plans, not from the termination of
employment. Accordingly, this case is governed by the sec-
tion providing that “[i]f the Plan is terminated, then plan con-
tributions will stop, and you will receive a total distribution
of your account.” As we have previously explained, Vaughn
does not deny that he received a total distribution of his
  11
    Defendants only make this argument with respect to the Retirement
Plan, but the relevant language also appears in the Pension Plan summary.
6710     VAUGHN v. BAY ENVIRONMENTAL MANAGEMENT
account. Accordingly, the Retirement Plan summary is inap-
posite because it does not address cases, such as this one,
where the former employee alleges that his total distribution
did not reflect the full benefit to which he is entitled.

   Having considered and rejected each of Defendants’ argu-
ments, we hold that former employees who have received a
full distribution of their account balances under a defined con-
tribution pension plan have standing as plan participants
under ERISA to recover losses occasioned by a breach of
fiduciary duty that allegedly reduced the amount of their ben-
efits. In addition to maintaining consistency among the cir-
cuits, this holding is necessary in order to give effect to one
of the primary goals of ERISA, “prevent[ing] the misuse and
mismanagement of plan assets by fiduciaries.” 

(citing 

& n.8). If for-
mer employees in Vaughn’s situation did not have standing
“an employer who had mismanaged individual account plan
assets [could] avoid liability by cashing out the participants.”

. This could not have been Con-
gress’s intention, particularly since “ERISA’s legislative his-
tory indicates that its standing requirements should be
construed broadly to allow employees to enforce their rights.”

v. Blue Cross and Blue Shield of Ne.
Penn., 

, 128 (3d Cir. 2006) (citing S. Rep. No.
93-127, at 3 (1974), reprinted in 1974 U.S.C.C.A.N. 4639,
4871)).

                              IV

  The order of the district court is VACATED and the case
REINSTATED and REMANDED for further proceedings.