Fiduciary Governance & Practice
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ADT’s $100 Tobacco Surcharge Draws a Proposed Class ActionSummary
The tobacco-surcharge wave reached ADT on October 22. A participant alleges the company’s $100 monthly surcharge violates ERISA’s wellness-program and fiduciary rules because employees who complete a cessation program get the surcharge removed only going forward rather than receiving the full annual reward, and because notice of alternatives was inadequate. The complaint seeks refunds and equitable relief for a proposed class. No court has evaluated the claims.
ESOP “Adequate Consideration” Inadequate No More?Summary
Seyfarth sees meaningful protection for closely held employer-stock transactions in the Retire Through Ownership Act’s appraisal-reliance language. Its analysis focuses on what the new statutory treatment of adequate consideration could mean for employee stock ownership plans buying shares that have no public market price. Fiduciary duties remain, so a qualifying appraisal is not a substitute for a prudent process.
Building Benefits: ERISA Insights for Construction Employers - You Don’t Need a Benefits Fiduciary Committee, Until You DoSummary
Who reviews the benefits vendors, and where is that decision recorded? Anne Greene uses those basic questions to explain why employers may benefit from a formal fiduciary committee even when one isn’t specifically required. Her construction-industry discussion emphasizes clear delegation, regular reviews of providers and costs, and records showing how decisions were made. Naming a committee doesn’t establish a prudent process, but assigning the work and documenting it can make gaps in oversight harder to miss.
When AI Joins a Fiduciary Discussion: Rethinking Leadership, Stewardship, and GovernanceSummary
Don Trone argues that AI can sharpen a fiduciary committee’s analysis without displacing the committee’s responsibility for judgment. His leadership, stewardship and governance framework treats generated answers as inputs that still need human oversight, relevant evidence and accountability for consequences. The piece is a practitioner’s opinion about sound process, not a Labor Department requirement or a litigation safe harbor, and the framework is Trone’s own.
Appeals Court Finds Employer Liable for Diverted Employee Contributions, Unpaid Health ClaimsSummary
The Fifth Circuit affirmed summary judgment for the Labor Department against Coastal Bridge and its sole owner, who kept withholding employees’ health premiums from paychecks while the company stopped forwarding them to its insurers and quit reimbursing Blue Cross for claims under its self-funded plan. At least 78 participants were left with $172,351 in unpaid medical bills, coverage lapsed while deductions continued, and the owner was ordered to pay $209,466 plus interest and permanently barred from serving as a plan fiduciary. The panel swept aside the defenses distressed sponsors reach for. Delegating plan tasks did not shed fiduciary status, the company’s role as named fiduciary did not shield the man who decided not to pay, and a surety’s control of receivables was no excuse. Financial trouble doesn’t excuse using employees’ health-plan contributions to cover the company’s other expenses.
Solicitor General Urges Supreme Court to Decline Ruby Tuesday Benefits SuitSummary
More than 90 former Ruby Tuesday executives lost their supplemental retirement savings when the restaurant chain went through bankruptcy in 2020, and they have been trying to recover the money from Regions Bank, the plans’ trustee, ever since. The Sixth Circuit ended their case by holding that their request for surcharge, meaning compensation for losses allegedly caused by the trustee’s breach of duty, was really a claim for money damages that ERISA does not allow. Invited to weigh in on their Supreme Court petition in Aldridge v. Regions Bank, the Solicitor General filed a brief in late August agreeing that the Sixth Circuit conflated surcharge with damages and got the law wrong, yet urging the Court to deny review anyway. The plans here are top-hat plans for executives, which sit outside ERISA’s fiduciary rules, so the government sees the case as a poor vehicle for resolving when surcharge is available. The justices are scheduled to consider the petition at their October 9 conference. For deferred compensation participants the practical lesson stands either way. Top-hat plans leave executives as unsecured creditors when the employer fails, and the remedies afterward are thin.
Summary of Oral Arguments in Anderson v. Intel Heard Before the U.S. Supreme CourtSummary
Encore Fiduciary and Davis & Harman catalog the Anderson argument justice by justice and set it inside the circuit split, with the Second, Seventh, Eighth, Ninth and Tenth Circuits requiring a meaningful benchmark in fee or underperformance cases while the Sixth and Eleventh do not. Two threads stand out in their account. Justices Kavanaugh and Gorsuch pressed whether poor performance alone can ever show a breach, given that the duty of prudence is about a fiduciary’s process, and Justice Kagan pushed for the Court to say what meaningful requires, worrying that some lower courts already demand comparator funds with identical asset allocations, which she suggested goes too far.
Supreme Court Hears Investment Underperformance Argument in Anderson v. Intel: Justices Appear Receptive to a Benchmark RequirementSummary
The distinction that matters in Groom’s recap of the Anderson argument is between claims built on investment performance and claims attacking the decision-making process. The Ninth Circuit required a meaningful benchmark only when a plaintiff asks the court to infer imprudence from how an investment performed; a complaint that pleads facts about a flawed fiduciary process directly does not need a comparator at all. At argument, the justices appeared broadly agreed that performance-based claims need an apples-to-apples comparator, and the open question is how much content the Court will give the word meaningful, with a fund’s objectives, risk-adjusted returns and stated benchmarks among the candidates. Groom expects a decision at the beginning of next year.
Fifth Circuit Affirms Summary Judgment Holding Company Owner a Functional ERISA Fiduciary Personally Liable for Diverted Employee Contributions and Unpaid Health ClaimsSummary
In Sonderling v. Sills, the Fifth Circuit affirmed summary judgment making the president and sole owner of Coastal Bridge Company personally liable for $209,466.34 plus interest, and permanently barred him from serving as an ERISA fiduciary. The company withheld employee premium contributions without forwarding them to its dental, vision and voluntary coverage insurers, then stopped reimbursing Blue Cross under its self-funded medical plan, leaving at least 78 participants with $172,351.35 in denied claims. Unanswered requests for admission established the owner’s control over plan assets, and the court held that deciding which bills got paid was itself a fiduciary function, that the HR director’s signature on the administrative services agreement did not matter, and that neither corporate insolvency nor a surety’s control of receivables excuses failing to remit employee money. The owner could not use employees’ premium money to cover the company’s other bills.
M1 Debuts AI Financial AdvisorSummary
Fintech M1 has launched M1 Advisor, an artificial intelligence financial adviser built into its investing platform and free to clients through 2027. The company reactivated its registered investment adviser entity to offer non-discretionary advice with no human advisers behind it, running on models from Google, OpenAI, Anthropic and Amazon under an internal governance process. The RIA reports $1.85 billion under management, and the system can see a client’s outside 401(k)s, IRAs and loans through Plaid, though it only advises and cannot act. The claim worth watching from the plan world is the legal one, SEC-registered fiduciary advice generated entirely by machine. Participant-facing advice tools carry the same questions about conflicts, disclosures and accountability when the model is wrong, and somebody was going to run this experiment first.
House Democrats Target Fiduciary Rules, Arbitration in Retirement BillsSummary
Democrats on House Education and Workforce introduced a three-bill retirement package. The Workers’ Retirement Savings Protection Act from Ranking Member Bobby Scott would extend ERISA fiduciary status to one-time advice, including rollover recommendations, reviving concepts from the vacated Retirement Security Rule in statutory form. The Employee and Retiree Access to Justice Act from Rep. DeSaulnier and Sen. Smith would make forced arbitration clauses, class action waivers and representation waivers unenforceable whether signed before or after a dispute, and would ban discretionary clauses outside multiemployer plans so benefit denials get a fresh look in court. The Protecting Workers’ Benefits Act would treat litigation recoveries as plan assets, add a participant incentive award of 0.5 to 1 percent of any recovery, and require consolidation of duplicative suits. The bills lay out House Democrats’ priorities, though their prospects in the current Congress are uncertain.
Is Your Retirement Plan Working for Your Workforce? Important Considerations for Plan Sponsors and FiduciariesSummary
A retirement plan can run smoothly and still fall short for the workforce it serves, writes T. Katuri Kaye. In her example, 90 percent participation looks strong until you ask whether first-year employees are in, whether lower-paid workers contribute enough to collect the full match, and whether anyone ever moves off the auto-enrollment default rate. The four steps use data employers already receive from recordkeepers and payroll. She closes on governance. Choosing the matching formula is a business decision about plan design, while investigating why employees miss the match is fiduciary work governed by ERISA, and committee minutes should make clear which kind of decision was being made.
Why Workforce Sentiment Is a Critical Fiduciary Data PointSummary
Donovan Pyle argues that employers should regularly measure how employees view their benefits and document how they respond, turning impressions into evidence a benefits committee can act on and defend. His example comes from a midsized firm paying about $180,000 a year for four standalone benefit programs. Three had adoption under 4 percent, so the firm cut them and redirected $135,000 to lowering the medical deductible, a change employees could actually feel.
The Most Dangerous Employee in Your Retirement PlanSummary
Employees who overestimate their benefits knowledge can cause serious plan errors, writes Ary Rosenbaum. They may override payroll procedures, decide who's eligible, or interpret plan provisions without consulting the administrator or counsel. He recommends clear responsibilities, documented decisions, and a process for getting qualified advice before acting.
Plan Doctors Are Not Fiduciaries, New Jersey Federal Court RulesSummary
A former player's fiduciary breach claims against the two physicians who reviewed his neurocognitive disability claim ended at the pleading stage, with prejudice. The plan makes a medical advisory physician's determination final and binding on medical issues the board refers, but the court read that authority as exactly what it says, medical judgment on a discrete question, while the board keeps full and absolute discretion over plan interpretation and benefit entitlement. Advising professionals become fiduciaries only through an unusual degree of influence over the plan, and neither co-authoring an examiner manual nor an alleged pattern of claim-unfriendly findings supplies it. The benefits claim against the plan itself continues.
Alternative Assets: The DOL Proposal's Liquidity FactorSummary
The long-running alternative-assets series reaches the proposal's liquidity factor, and the reading is more permissive than sponsors might expect. The DOL's proposed regulation lists six factors for vetting alternatives in participant-directed plans; on liquidity, it says a prudent process may sacrifice some plan or individual level liquidity in pursuit of additional risk adjusted return. The analysis runs on two levels: participant liquidity, where daily trading will remain the practical demand, and plan liquidity, where the question is how hard an option is to remove once chosen. The prediction is that private fund allocations will arrive mostly inside target date funds, which can pair daily participant trading with a 60 to 90 day removal window.
Plan Sponsors Increase Focus on Health Plan Fiduciary RolesSummary
Health plan governance is getting the 401(k) treatment. Benefits attorneys and consultants walk through what sponsors should be doing now: negotiate rebate pass-throughs and oversight rights into PBM contracts before signing, benchmark per-member fees, and collect compensation disclosures from every vendor taking $1,000 or more a year from the plan. The clock behind the advice is the Consolidated Appropriations Act of 2026. Its ERISA-fiduciary provisions treat PBMs as covered service providers and require spread pricing out of contracts by August 1, 2029.
Blue Cross of Idaho Breached Its Duty of Loyalty by Sitting on a $1.4 Million Stop-Loss ClaimSummary
Summary judgment for the employer, on facts every self funded sponsor should file away. BCI served as the plan's claims administrator and named ERISA claim fiduciary while also writing its stop-loss coverage—a conflict the court called actual once a newborn participant's second excess claim of roughly $1.4 million arrived near the coverage window's close. BCI's own account team had flagged the infant as a high cost claimant more than three months before the window shut, and its underwriting director conceded the company had retroactively modified stop-loss contracts before. The court held the duty of loyalty required expediting or covering the claim, refused to let undisclosed Blue Cross association manuals absolve a fiduciary under ERISA's anti exculpation clause, and awarded Scentsy an Amara surcharge for the amount it paid out of pocket.
SEC Proposes Rescission of Political Contribution Rule for Investment AdvisersSummary
The Commission proposes rescinding the 2010 pay-to-play rule, Advisers Act Rule 206(4)-5, which bars advisers from providing compensated advisory services to government clients for two years after covered political contributions. Chairman Atkins calls the rule overly prescriptive and would leave political contribution policing to state and local law. Comments run for 60 days after Federal Register publication, and advisers to public retirement plans are the audience most directly affected.
The 401(k) Plan Sponsors Can Be the DangerSummary
Rosenbaum's warning to plan sponsors borrows from Breaking Bad. The greatest threat to a 401(k) plan is often not an outside vendor or a plaintiffs' lawyer but the sponsor itself, and fiduciary discipline starts with recognizing it.
IRS Proposes Rules for Trump Account Investment Options: Considerations for EmployersSummary
Proposed regulations under section 530A would confine Trump Account investments during the growth period to unleveraged index funds that track broad U.S. equity benchmarks and charge annual fees of 0.1% or less, excluding actively managed, sector, and ESG-labeled funds. Employers contributing to the accounts bear no fiduciary duty for investment selection but should confirm contributions flow to compliant accounts. Comments are due October 20.
Cybersecurity Has Become a Fiduciary Governance ObligationSummary
Learn why cybersecurity now belongs in the boardroom and what public pension trustees should be asking about governance.
CFP Board Releases Guide to Applying Fiduciary Duty to RolloversSummary
New guide addresses a CFP professional’s fiduciary obligations when providing financial advice on whether to roll over assets from an employer plan.
Quantifying Fiduciary Prudence: Creating a Win-Win ERISA Fiduciary Prudent Process by Integrating the Fiduciary Prudence Trinity With AI and the AMVR and TWBVI MetricsSummary
The Prudent Investment Fiduciary Rules blog proposes a quantitative framework for documenting fiduciary prudence, combining cost-comparison metrics with AI-assisted process tools. Dense, but of interest to committees formalizing their prudence files.
$48 Million ERISA Settlement Serves as a Reminder of 401(k) Fiduciary DutiesSummary
one of the largest 401(k) fee settlements on record, and a checklist of the oversight practices that were alleged to be missing.
Third Circuit Holds That 401(k) Fiduciaries' Good Process Defeats Claims of ImprudenceSummary
At a Glance This decision affirms some key ERISA concepts that fiduciary committee members should consider and defendants should emphasize in nearly every lawsuit alleging fiduciary imprudence. The most important principle is that ER.
Schlichter Bogard Settles ADP ERISA Lawsuit for $48MSummary
The ADP fiduciary committee will review its retirement plan’s target-date funds as part of the settlement.
Monthly Roundup (July 2026)Summary
Groom's July roundup collects the firm's month in publications and press, including the Cycle 4 Cumulative List for pre-approved defined benefit plans and Kreps on fiduciary partnerships in PLANADVISER.
Ninth Circuit Affirms Knowing and Voluntary Waiver of 401(k) Claims but Reverses Summary Judgment on Pension Plan Claims After Finding Triable Issue as to Whether Eligibility Amendment Was BackdatedSummary
In Raya v. Barka, No. 25-2394, __ F.4th __, 2026 WL 2168772 (9th Cir. July 28, 2026), Plaintiff sued his former employer, Calbiotech, Inc., several individual defendants, and Calbiotech’s 401(k) Profit Sharing Plan and Pension Plan, asserting ERISA claims for denial of benefits, breach of fiduciary duty.
Maryland and Connecticut Show Where 401(k) Fund Litigation Goes NextSummary
Plaintiffs filed two new ERISA suits on June 23, 2026. Both target the same fiduciary duty, and both push the theory onto new ground.
The 5 Stages of Integrating Human Judgement and Artificial IntelligenceSummary
Don Trone examines how to build new protocols for fiduciary governance.
When a Prudent Process May Not Be EnoughSummary
ARA analysis of the JPMorgan prescription-drug fiduciary litigation, where a health plan excessive-cost suit survived dismissal in part on arguments drawn from a recent Supreme Court decision. The piece examines why a documented process may not end the inquiry when plaintiffs plead prohibited-transaction claims.
Bruce Rush v. GreatBanc Trust CompanySummary
Employee shareholder challenges ESOP sale as undervalued, alleging trustees breached fiduciary duties; court affirms dismissal of all claims.
Goldman Sachs Becomes OCIO for $70B From Verizon, Lockheed MartinSummary
This comes amid a wave of plan sponsors opting to outsource the investment management of their pension plans.
Kreps Discusses Fiduciary Partnerships in PLANADVISERSummary
As Kreps explains, “The sponsor does not have to second-guess every decision that gets made, but they do have to ensure that the professionals they have selected are competently executing their
What Aspects of ERISA Fiduciary Duty Can Plan Sponsors Outsource?Summary
Experts answer questions regarding plan sponsor fiduciary duties for health benefits .
The Innovation ConundrumSummary
Eric Dyson’s review of comments to the DOL on its proposed “Fiduciary Duties in Selecting Designated Investment Alternatives” regulation unearthed a common challenge: How should fiduciaries evaluate
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