7/24/25 How to Meet Your Fiduciary Duties
July 24, 2025
By Jeff Robertson & Iris Tilley
A recent fiduciary duty case outlines the best practices to avoid a fiduciary breach decision related to choosing funds. How many of these factors does your company/plan meet?
A court recently ruled that one company’s efforts protected it from a challenge to its fund selection process and flagged the following factors as relevant to its decision making:
Appointing an independent fiduciary
Seeking outside legal expertise
Using outside financial expertise
Conducting regular meetings to ensure fiduciary oversight
Receiving regular updates on investment performance
In this specific case, the court noted that the company and its committee (the “Committee”) regularly reviewed multiple funds when a question of adding or subtracting a fund was considered and followed a regular process.
The Committee engaged an independent financial consultant, outside legal counsel, and an independent consultant who regularly attended committee meetings. In addition, the legal counsel performed fiduciary training for the Committee.
Perhaps most importantly, the court ruled that even when the Committee did not perform at its most regular or most comprehensive, a plaintiff must prove imprudent action, not just a period of time when the Committee was not meeting its duties.
The relatively low effort of holding regular meetings, reviewing investment options with outside subject matter experts, and engaging in independence through an independent financial advisor and legal counsel were critical in the Committee’s process. This ultimately resulted in the company avoiding liability associated with the inclusion of what ended up potentially being higher cost and/or lower performing funds.
Future 401(k) Plan Actions on the Horizon?
There are reports of possible regulatory action allowing privatized investments in 401(k) plan investment lineups and potential revisions to Roth options and savings limits. We will keep you informed as these potential changes develop.
Please contact Jeff Robertson at 503-276-2140 or jrobertson@barran.com, Iris Tilley at 503-276-2155 or itilley@barran.com, or your regular attorney at Barran Liebman if you have any questions.