Labor & Employment Law Daily Wrap Up, PENSION AND BENEFIT PLANS—4th Cir.: Profit plan participant not deprived of benefits in attempt to liquidate 401(k)s, (Aug 11, 2026)

By Ronald Miller, J.D.

Fidelity, as the third-party record keeper of profit-sharing plan was not an ERISA fiduciary.

The Fourth Circuit affirmed a district court’s decision granting summary judgment to an employer, a plan administrator, and a third-party record keeper on claims brought by an employee alleging that he was deprived of his right to ERISA benefits and that the defendants breached their fiduciary duties. The appeals court agreed with the district court that Altria did not abuse its discretion in denying the employee’s benefits claim. Further, the court found that Fidelity was not an ERISA fiduciary and did not give the employee any investment or strategic advice. However, the appeals court concluded that an ASA was a document under which the plan operated, so the employee was entitled to a copy (Kelly v. Altria Client Services, LLC, Nos. 25-1350 and 25-2080 (4th Cir. Aug. 10, 2026)).

401(k) account. In 1983, the employee began working at Philip Morris USA and later moved to its subsidiary Altria Client Services. In 2010, his job was eliminated as part of Altria’s restructuring. The employee had a 401(k) account in Altria’s Deferred Profit-Sharing Plan for Salaried Employees. He maintained the account after he stopped working there.

Leading up to the 2020 presidential election, the employee predicted a post-election stock market bump. He wanted to liquidate various holdings in his 401(k) account, transfer the funds to a Goldman Sachs account and then invest them in a way that would take advantage of the market spike he expected.

On November 2, the name before Election Day, the employee and his Goldman Sachs advisors called Fidelity Workplace Services, which was the corporate record keeper for the plan. The employee asked the record keeper to liquidate his account as soon as possible. The employee became frustrated that the transfers were taking too long. On November 12, 2020, Fidelity completed the cash rollover and the in-kind distribution.

For a couple of years, the employee complained to Altria about his frustrations with this situation. Ultimately, Altria treated his complaints as a formal claim under the plan. And Altria also advised the employee of its claims appeal process and his rights to bring a civil action under ERISA.

Altria, the plan administrator, denied the employee’s claim. After reviewing the employee’s calls to Fidelity, Altria found that the transfers were completed within timelines quoted for completion of those tasks.

The employee then appealed the denial to Altria’s Management Committee for Employee Benefits. The management committee upheld the decision, similarly finding that Fidelity processed the employee’s transactions consistent with the promised timelines.

Lawsuit. The employee sued Altria, the plan and Fidelity based on four claims: (1) Altria and the plan deprived him of his right to ERISA benefits under 29 U.S.C. § 1132(a)(1)(B); (2) Altria and the plan failed to provide a full and fair review of his ERISA claim under the same statute; (3) Altria, the plan and Fidelity breached their fiduciary duties under 29 U.S.C. § 1132(a)(3); and (4) Altria failed to provide the employee a plan document—the Administrative Services Agreement (ASA) between Fidelity and Altria as the plan administrator—under 29 U.S.C. § 1132(a)(1)(A).

The employee voluntarily dismissed Count Two. After discovery, the parties filed cross-motions for summary judgment.

The district court granted the defendants’ motions and denied the employee’s motions. As to the deprivation of benefits claim, the district court concluded that the management committee’s decision-making process was reasoned, principled and considered the relevant materials. As to the breach of fiduciary duty claim, the court found that Fidelity was not acting as a fiduciary when it advised him on how to send his assets to Goldman Sachs. Finally, as to the employee’s claim for statutory penalties under ERISA against Altria for withholding a copy of the ASA, the court reasoned that the agreement did not provide information about the employee’s benefits or rights and thus “Altria was under no obligation to provide the ASA to [[the employee]] upon his request.”

ERISA claim. ERISA allows a participant in a qualifying benefits plan to sue to “recover benefits due to him under the terms of his plan, to enforce his rights under the terms of the plan, or to clarify his rights to future benefits under the terms of the plan.” How such a claim is reviewed depends on whether the plan gives the administrator discretion in considering questions about benefits.

Here, the plan gives the plan administrator the “discretionary power to determine all questions that arise under the Plan,” including “the amount of any benefit to which any person is entitled to under the Plan.” Thus, it was reviewed for abuse of discretion.

To determine whether Altria’s decision is supported by substantial evidence, the court considered a nonexhaustive list of factors as set out in Booth v. Wal-Mart Stores, Inc. Associates Health & Welfare Plan, 201 F.3d 335 (4th Cir. 2000).

The Fourth Circuit agreed with the district court that Altria did not abuse its discretion in denying the employee’s claim. The management committee gave the employee the opportunity to submit materials in support of his claim. It considered the relevant transcripts of the calls between the employee and Fidelity, as well as the evidence he submitted on his alleged damages.

The management committee considered the employee’s argument that he was not told he could not access the proceeds from liquidating Altria stock or the index fund until the in-kind distribution of the non-Altria stock was complete. As the management committee observed, Fidelity met these timelines.

Considering the entire record, as well as the Booth factors, Altria’s decision was reasonable. Thus, it did not abuse its discretion in denying the employee’s claim for benefits under Section 1132(a)(1)(B).

Breach of fiduciary claim. Next, the appeals court considered the employee’s breach of contract claim. Here, the employee argued that the district court erred in finding that Fidelity was not an ERISA fiduciary.

The plan gives the appropriate fiduciary “full power and discretionary authority to determine all matters arising in the administration, interpretation and application of the Plan.” It named the administrator as the fiduciary vested with “general administration of the Plan.” The plan does not name Fidelity as a fiduciary. According to the plan, Fidelity is the third-party recordkeeper and was “retained to provide ministerial recordkeeping and administrative functions under the Plan as documented in a separate [ASA].”

The ASA directs Fidelity to perform a variety of ministerial recordkeeping services within the framework of the plan. The agreement correctly identifies those duties as ministerial. So, carrying out those responsibilities doesn’t make Fidelity a functional fiduciary.

Moreover, Fidelity didn’t give any investment or strategic advice. It simply responded to the employee’s questions.

Copy of the ASA. Lastly, the court examines the employee’s claim that Altria’s failure to provide him a copy of the ASA warranted statutory penalties under 29 U.S.C. § 1024(b)(4). Under that provision, upon written request of a participant, a plan administrator must furnish a copy of the “contract, or other instrument[] under which the plan is established or operated.”

Altria denied the employee’s request for the ASA, saying that the ASA was not a document that governs plan participants and, therefore, was not an instrument under which the plan was established or operated.

Based on the definitions of “establish” and “operate” the appeals court concluded that a document under which a plan operates is one that governs some part of the plan’s process. The ASA directs Fidelity to answer calls and communicate with Altria and the plan participants, fulfill literature requests, take customer services calls, among other duties. So, the ASA was a document under which the plan operated.

Accordingly, the appeals court affirmed the district court’s judgment with respect to the employee’s benefit claim and the breach of fiduciary duty claim. However, the appeals court reversed and remanded to the district court to determine whether statutory penalties are appropriate.

The cases are Nos. 25-1350 and 25-2080.

Judge: Quattlebaum, A.

Attorneys: Richard F. Hawkins, III (Law Offices of Richard F. Hawkins, III) for Richard D. Kelly. Michael Randolph Shebelskie (Hunton Andrews Kurth) for Altria Client Services, LLC and Deferred Profit-Sharing Plan for Salaried Employees. Eric Douglas Field (Littler Mendelson) for Fidelity Workplace Services, LLC.

Companies: Altria Client Services, LLC; Deferred Profit-Sharing Plan for Salaried Employees; Fidelity Workplace Services, LLC

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