10% shareholder -- ERISA 3(14)(H)

[Guest RGH2]

The plan sponsor has an institutional shareholder who is reported on the sponsor's 10-K as owning more than 10% of the sponsor's outstanding common shares based upon its "beneficial" ownership of those shares as the manager of several mutual funds. The institutional shareholder does have sole voting and dispositive power with respect to those shares.

We are wrestling with the question of whether such beneficial ownership counts for purposes of determining whether the institutional shareholder is a party in interest under ERISA section 3(14)(H), as a 10% shareholder. There doesn't seem to be much, if any, authority addressing this topic. Has anyone dealt with this issue?