RONEY, Circuit Judge:
In this suit arising from the breakup of a law firm, plaintiff trustees sought a declaration of their legal obligation to comply with defendant’s demand for an immediate, lump sum payment of his accrued benefits in the firm’s pension and profit sharing plans. The district court held that the plaintiffs could properly deny the demand. Fine v. Semet, 514 F.Supp. 34 (S.D.Fla. 1981). We affirm.
[1093] The plaintiffs, stockholders in the law firm of Fine, Jacobson, Klein, Colan & Simon, P.A., formerly known as Fine, Jacobson, Block, Goldberg & Semet, P.A. (“the firm”), are trustees of the firm’s pension and profit sharing plans (“the plans”). Defendant Semet, a lawyer, left the firm and requested the trustees to pay him a lump sum of approximately $48,500, his accrued benefits under the plans. The trustees denied defendant’s request in writing and brought this declaratory judgment action.
The legal obligation of the trustees in this case is controlled by the provisions of the plans and the controlling statute. Employee Retirement Income Security Act of 1974 (ERISA), 29 U.S.C.A. § 1001 et seq. Both the pension and the profit sharing plans contain identical sections dealing with distributions if a participant ends employment with the firm prior to the normal retirement age. Section 5.03 of each instrument provides, among other things, that if the terminating participant is 100 percent vested, as was Semet, the Advisory Committee “in its sole discretion” may direct the trustee to commence payment of the accrued benefits.1
Although the agreement is thus couched in terms of absolute discretion, this Court has held that such broad grants of discretion do not give trustees unbounded or absolute authority in administering employee welfare plans. Their actions will not be sustained if they are proven to have been arbitrary and capricious. Bayles v. Central States, Southeast and Southwest Areas Pension Fund, 602 F.2d 97 (5th Cir.1979), binding on this circuit by the holding in Bonner v. City of Prichard, 661 F.2d 1206, 1209 (11th Cir.1981) (en banc).
ERISA does not require a more stringent standard of review. It does not prohibit the broad grant of discretion provided by § 5.03. The Act imposes no obligation on a plan to pay benefits before an employee reaches normal retirement age. Any right to earlier benefits and a particular method of payment must be found in the individual agreements. See Pompano v. Michael Schiavone & Sons, Inc., 680 F.2d 911, 914 (2d Cir.1982), cert. denied, - U.S. -, 103 S.Ct. 454, 74 L.Ed.2d 607 (1982).
Defendant Semet argues there was a policy of lump sum payments that makes the trustees’ denial of Semet’s request arbitrary and capricious. Semet concedes there was no written policy but claims that this [1094] decision, committed to the Advisory Committee’s discretion in the agreement, became essentially mandatory due to a prior course of conduct. On previous occasions when participants ended their employment with the firm their requests for immediate, lump sum payments of accrued benefits were honored.
The district court found that the prior individual instances neither resulted from nor established a policy of making lump sum payments. This finding of fact by the district court is not clearly erroneous. No formal Advisory Committee existed or functioned before Semet’s departure from the firm. Semet himself served as the firm’s administrative partner and administered the plans on a day-to-day basis. Semet testified that his duties related to ministerial functions, he consulted with plaintiffs on all policy matters, and in 1976 a management committee took over policy matters relating to the plans and the firm. The district court found, however, that the firm management committee did not function as the Advisory Committee described in § 5.03 of the plans. The plans were operated informally. The typical method of decision-making was for Semet to make the initial decision on both ministerial and policy matters and then to confer with the other management committee members. Based on this, the district court found that previous actions regarding lump sum payments were the result of Semet’s own decisions, albeit with plaintiffs’ informal authorization. He served as a one-person Advisory Committee.
The district court was properly hesitant to find that the plans as written had been modified to provide a mandatory policy of lump sum payments based on the informal actions of Semet himself. Cf. Hackett v. Pension Benefit Guaranty Corp., 486 F.Supp. 1357, 1362-63 (D.Md.1980) (where written pension plan required employer’s consent to early retirement, that employer had routinely consented previously to such requests did not amount to waiver or modification of consent requirement). The previous decisions to make lump sum payments were made on a case-by-case basis and involved relatively small amounts. Between 1971 and 1979, eight employees, none of whom were stockholders in the firm, terminated their employment before reaching normal retirement age. With one exception, they each received a lump sum payment of their vested, accrued benefits. The amounts of the lump sum payments ranged from a low of a few hundred dollars to a high of about $5,000. Payment to one employee was deferred for a period of several months at her request. Such payments do not mandate a conclusion that a future Advisory Committee could not exercise the discretion vested in it by the plans to refuse a request for a lump sum payment if it determined that granting the request would be fiscally unwise. See Pompano v. Michael Schiavone & Sons, Inc., 680 F.2d 911 (2d Cir.1982), cert. denied, - U.S. -, 103 S.Ct. 454, 74 L.Ed.2d 607 (1982). To hold otherwise would impair the flexibility necessary for proper financial management of such plans, a goal of Congress in holding ERISA fiduciaries to the “prudent man” standard. Joint Explanatory Statement of the Committee of Conference, H.Rep. No. 1280, 93d Cong., 2d Sess., reprinted in 1974 U.S.Code Cong. & Ad.News 5038, 5083-86; see Pompano, supra at 914.
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RONEY, Circuit Judge:
In this suit arising from the breakup of a law firm, plaintiff trustees sought a declaration of their legal obligation to comply with defendant’s demand for an immediate, lump sum payment of his accrued benefits in the firm’s pension and profit sharing plans. The district court held that the plaintiffs could properly deny the demand. Fine v. Semet, 514 F.Supp. 34 (S.D.Fla. 1981). We affirm.
[1093] The plaintiffs, stockholders in the law firm of Fine, Jacobson, Klein, Colan & Simon, P.A., formerly known as Fine, Jacobson, Block, Goldberg & Semet, P.A. (“the firm”), are trustees of the firm’s pension and profit sharing plans (“the plans”). Defendant Semet, a lawyer, left the firm and requested the trustees to pay him a lump sum of approximately $48,500, his accrued benefits under the plans. The trustees denied defendant’s request in writing and brought this declaratory judgment action.
The legal obligation of the trustees in this case is controlled by the provisions of the plans and the controlling statute. Employee Retirement Income Security Act of 1974 (ERISA), 29 U.S.C.A. § 1001 et seq. Both the pension and the profit sharing plans contain identical sections dealing with distributions if a participant ends employment with the firm prior to the normal retirement age. Section 5.03 of each instrument provides, among other things, that if the terminating participant is 100 percent vested, as was Semet, the Advisory Committee “in its sole discretion” may direct the trustee to commence payment of the accrued benefits.1
Although the agreement is thus couched in terms of absolute discretion, this Court has held that such broad grants of discretion do not give trustees unbounded or absolute authority in administering employee welfare plans. Their actions will not be sustained if they are proven to have been arbitrary and capricious. Bayles v. Central States, Southeast and Southwest Areas Pension Fund, 602 F.2d 97 (5th Cir.1979), binding on this circuit by the holding in Bonner v. City of Prichard, 661 F.2d 1206, 1209 (11th Cir.1981) (en banc).
ERISA does not require a more stringent standard of review. It does not prohibit the broad grant of discretion provided by § 5.03. The Act imposes no obligation on a plan to pay benefits before an employee reaches normal retirement age. Any right to earlier benefits and a particular method of payment must be found in the individual agreements. See Pompano v. Michael Schiavone & Sons, Inc., 680 F.2d 911, 914 (2d Cir.1982), cert. denied, - U.S. -, 103 S.Ct. 454, 74 L.Ed.2d 607 (1982).
Defendant Semet argues there was a policy of lump sum payments that makes the trustees’ denial of Semet’s request arbitrary and capricious. Semet concedes there was no written policy but claims that this [1094] decision, committed to the Advisory Committee’s discretion in the agreement, became essentially mandatory due to a prior course of conduct. On previous occasions when participants ended their employment with the firm their requests for immediate, lump sum payments of accrued benefits were honored.
The district court found that the prior individual instances neither resulted from nor established a policy of making lump sum payments. This finding of fact by the district court is not clearly erroneous. No formal Advisory Committee existed or functioned before Semet’s departure from the firm. Semet himself served as the firm’s administrative partner and administered the plans on a day-to-day basis. Semet testified that his duties related to ministerial functions, he consulted with plaintiffs on all policy matters, and in 1976 a management committee took over policy matters relating to the plans and the firm. The district court found, however, that the firm management committee did not function as the Advisory Committee described in § 5.03 of the plans. The plans were operated informally. The typical method of decision-making was for Semet to make the initial decision on both ministerial and policy matters and then to confer with the other management committee members. Based on this, the district court found that previous actions regarding lump sum payments were the result of Semet’s own decisions, albeit with plaintiffs’ informal authorization. He served as a one-person Advisory Committee.
The district court was properly hesitant to find that the plans as written had been modified to provide a mandatory policy of lump sum payments based on the informal actions of Semet himself. Cf. Hackett v. Pension Benefit Guaranty Corp., 486 F.Supp. 1357, 1362-63 (D.Md.1980) (where written pension plan required employer’s consent to early retirement, that employer had routinely consented previously to such requests did not amount to waiver or modification of consent requirement). The previous decisions to make lump sum payments were made on a case-by-case basis and involved relatively small amounts. Between 1971 and 1979, eight employees, none of whom were stockholders in the firm, terminated their employment before reaching normal retirement age. With one exception, they each received a lump sum payment of their vested, accrued benefits. The amounts of the lump sum payments ranged from a low of a few hundred dollars to a high of about $5,000. Payment to one employee was deferred for a period of several months at her request. Such payments do not mandate a conclusion that a future Advisory Committee could not exercise the discretion vested in it by the plans to refuse a request for a lump sum payment if it determined that granting the request would be fiscally unwise. See Pompano v. Michael Schiavone & Sons, Inc., 680 F.2d 911 (2d Cir.1982), cert. denied, - U.S. -, 103 S.Ct. 454, 74 L.Ed.2d 607 (1982). To hold otherwise would impair the flexibility necessary for proper financial management of such plans, a goal of Congress in holding ERISA fiduciaries to the “prudent man” standard. Joint Explanatory Statement of the Committee of Conference, H.Rep. No. 1280, 93d Cong., 2d Sess., reprinted in 1974 U.S.Code Cong. & Ad.News 5038, 5083-86; see Pompano, supra at 914.
Semet next argues that the trustees improperly withheld his accrued benefits as a bargaining tool to gain a favorable settlement of issues involved in a suit brought by Semet in state court. On August 15, 1979, before making the request for the lump sum payment, Semet had sued the firm in state court seeking specific performance of an agreement which required the firm to purchase Semet’s stock. A second dispute involved the firm’s purchase of Semet’s interest in its building. The state court urged the parties to negotiate a settlement of these issues. Semet contends his former partners and their attorney consistently tied settlement of all the issues together, withholding payment of the accrued pension benefits as a wedge to force him to accept a lower price for his stock and interest in the office building. On the other hand, the attorney for the trustees testified it was Semet and his attorney who tied [1095] settlement of the state court suit to the lump sum payout Semet requested.
The district court thoroughly reviewed the conflicting testimony on this point and resolved the conflict in the trustees’ favor because “no persuasive support exists for the allegation that improper leveraging was intended or attempted.” 514 F.Supp. at 40. The testimony involved two differing versions of events, one recounted by Semet and his attorney and one by the trustees and their attorney. The court concluded that although Semet sincerely believed the trustees applied improper leveraging, the trustees held an equally sincere belief that unless they acceded to Semet’s demand regarding accrued benefits, he would not agree to a settlement of the issues involved in the state court suit. The resolution of this conflict was properly in the domain of the trial court, and its decision was not clearly erroneous.
Finally, we focus on whether the trustees’ articulated reasons for their treatment of Semet’s request were so insufficient as to make their actions arbitrary and capricious. The district court found credible the testimony that the trustees premised their denial on á valid concern that immediate payment of about $48,000 of the plan’s approximately $340,000 in assets would create a problem in making investment decisions and would cause a financial loss to the other participants. They concluded that Semet’s request would have a greater impact on the plan’s assets as a whole than had the previous requests.
Semet argues that a lump sum payment would have no effect on other participants. The trustees, however, indicated a desire to diversify the plans’ investments. The Act imposes an affirmative obligation on them to do so. 29 U.S.C.A. § 1104(a)(1)(C). The larger the amount of assets available, the more investment diversification possible. This could yield greater benefits for all participants, including those who have terminated employment but still have active accounts. ERISA imposes a duty on fiduciaries to act solely in the interest of plan participants and beneficiaries. 29 U.S.C.A. § 1104(a)(1). In the court’s view, the trustees’ reasons were sufficient because of the broad “sole discretion” language of the agreement by which Semet is bound. The reasons need not be compelling, only sufficient to take them out of the arbitrary mold. The district court’s ruling is not clearly erroneous.
The district court carefully considered all of Semet’s arguments. The court reasonably applied standards regarding the burden of each party by holding that after Semet met his initial burden of offering evidence of facially inconsistent treatment, the burden shifted to the trustees to show why they acted as they did. The court resolved all credibility choices in favor of the trustees. Having carefully considered oral argument, the briefs, and the record, we find no reversible error.
The plaintiff-trustees cross appeal the district court’s denial of attorney’s fees. ERISA provides that “[i]n any action under this subchapter by a participant, beneficiary, or fiduciary, the court in its discretion may allow a reasonable attorney’s fee and costs of action to either party.” 29 U.S. C.A. § 1132(g). The question is whether the district court abused its discretion in denying the fee award. This standard of review permits an area of decision in which a district court could go either way without reversal on review. See Johnson v. Mississippi, 606 F.2d 635, 637 (5th Cir.1979).
The court thoroughly analyzed each of the factors outlined by the former Fifth Circuit in Iron Workers Local No. 272 v. Bowen, 624 F.2d 1255, 1266 (5th Cir.1980), for determining whether a fee award is appropriate in an action under ERISA. It entered findings of fact as to each element, which are supported by the record. Semet’s defense of the lawsuit was neither frivolous nor entered in bad faith, and may well have benefited other participants in the plan. We find no abuse of the discretion allowed to the trial court in its denial of attorney’s fees. Each party will bear its own costs on appeal.
AFFIRMED.