ERISA § 1024(b)(4) Requires Disclosure of Administrative Services Agreements That Govern Plan Operations

1. Introduction

This ERISA dispute arose from Richard D. Kelly’s attempt to liquidate and transfer assets held in Altria’s Deferred Profit-Sharing Plan for Salaried Employees (a 401(k)-type plan) immediately before the 2020 presidential election. Kelly predicted a post-election market increase and wanted his plan assets moved quickly—while also structuring the transaction to pursue tax advantages (including “net unrealized appreciation” treatment for certain stock).

Fidelity Workplace Services, LLC served as the plan’s third-party recordkeeper. Kelly contended Fidelity’s call-center communications implied he would access “liquid” proceeds sooner than he ultimately could, and he asserted Altria’s plan administrator unreasonably denied his claim when he complained. He also demanded the contract governing Fidelity’s services— the “Administrative Services Agreement” (ASA)—and alleged unlawful withholding under ERISA’s disclosure rules.

The appeals presented three core issues:

• Benefits denial: whether the plan administrator abused its discretion in rejecting Kelly’s claim for lost opportunity/delayed access under 29 U.S.C. § 1132(a)(1)(B).
• Fiduciary breach: whether Fidelity was an ERISA fiduciary (and, if so, whether it breached fiduciary duties) under 29 U.S.C. § 1132(a)(3).
• Document disclosure: whether the ASA is a “contract, or other instrument[] under which the plan is established or operated” that must be produced upon written request under 29 U.S.C. § 1024(b)(4), enforceable via 29 U.S.C. § 1132(c)(1).

2. Summary of the Opinion

The Fourth Circuit largely affirmed the defense victories on the merits of Kelly’s timing-related complaints: it upheld (i) the plan administrator’s denial of benefits under the deferential abuse-of-discretion standard, and (ii) summary judgment on the fiduciary-breach theory because Fidelity was not acting as an ERISA fiduciary in the relevant communications (and, even if it were, no breach occurred).

However, the court reversed on the disclosure claim. It held that the ASA between Altria (as plan administrator) and Fidelity is a document “under which the plan is ... operated” within the meaning of 29 U.S.C. § 1024(b)(4). The panel therefore vacated the district court’s contrary ruling and remanded for the district court to decide in the first instance whether statutory penalties are appropriate under 29 U.S.C. § 1132(c)(1).

3. Analysis

3.1 Precedents Cited

The opinion is built on three doctrinal pillars—(a) deferential review of benefit determinations where discretion is granted, (b) functional-fiduciary analysis for service providers, and (c) statutory interpretation of ERISA’s disclosure provisions.

A. ERISA purpose and framing

• Marks v. Watters: cited for ERISA’s protective purpose and remedial structure—standards of conduct for fiduciaries and access to federal courts. This informs the background but does not drive any expansive remedy here.

B. Standard of review for benefits denial (discretionary clauses)

• Fortier v. Principal Life Ins. Co.: anchors the rule that when the plan grants discretion, review is for abuse of discretion.
• Cosey v. Prudential Ins. Co. of Am. and Haley v. Paul Revere Life Ins. Co.: emphasize how “highly deferential” the standard is, and that a reasonable administrator decision stands even if a court would decide differently.
• Griffin v. Hartford Life & Accident Ins. Co. (quoting Williams v. Metro. Life Ins. Co.): supplies the “deliberate, principled reasoning process” plus “substantial evidence” formulation.
• DuPerry v. Life Ins. Co. of N. Am. (quoting LeFebre v. Westinghouse Elec. Corp.): defines “substantial evidence” as enough that a reasoning mind would accept it.
• Booth v. Wal-Mart Stores, Inc. Associates Health & Welfare Plan: provides the multi-factor reasonableness framework (language of plan, adequacy of materials, process, ERISA compliance, conflicts, etc.) used to evaluate the administrator’s decision.
• Champion v. Black & Decker (U.S.) Inc.: clarifies that structural conflicts (administrator both evaluating and paying claims) are only one factor.
• Harrison v. Wells Fargo Bank, N.A.: cited for de novo appellate review of summary judgment while applying the relevant ERISA standard to the administrator decision.

C. Fiduciary status and misrepresentation theories

• Griggs v. E.I. DuPont de Nemours & Co. (citing Varity Corp. v. Howe): recognizes breach-of-fiduciary-duty claims under 29 U.S.C. § 1132(a)(3) and that fiduciaries can breach duties by failing to provide material information.
• Dawson-Murdock v. Nat'l Counseling Grp., Inc. (quoting Coleman v. Nationwide Life Ins. Co.): states the threshold requirement—plaintiff must first establish the defendant is a fiduciary.
• Tatum v. RJR Pension Inv. Comm. and Custer v. Sweeney: frame “functional fiduciary” status under 29 U.S.C. § 1002(21)(A) as de facto performance of specified discretionary functions.
• Edwards v. City of Goldsboro: used for forfeiture/abandonment principles on appeal (Kelly’s arguments against Altria on fiduciary breach were not developed).

D. Disclosure obligations and penalties under ERISA

• Faircloth v. Lundy Packing Co.: the Fourth Circuit’s key prior construction of 29 U.S.C. § 1024(b)(4). It distinguishes between (i) documents that are merely informational and (ii) “formal or legal documents under which a plan is set up or managed,” and it held some policies were disclosable while appraisal reports and meeting minutes were not. Here, the panel narrows the district court’s reading: Faircloth does not exclude service agreements that govern operational processes.
• Sw. Airlines Co. v. Saxon, Bostock v. Clayton Cnty., and Davidson v. United Auto Credit Corp.: modern textualist methodology—begin with statutory text, use ordinary public meaning, consult contemporaneous dictionaries. This method drives the court’s definition of “established” and especially “operated.”
• M. S. v. Premera Blue Cross and Mondry v. Am. Fam. Mut. Ins. Co.: persuasive out-of-circuit support that administrative/claims administration agreements can “govern the operation of the Plan” and thus fall within § 1024(b)(4).

E. Attorney’s fees

• Quesinberry v. Life Insurance Co. of North America (en banc): provides the fee-factor framework in ERISA cases.
• Plasterers' Loc. Union No. 96 Pension Plan v. Pepper: confirms courts may award fees to either party under 29 U.S.C. § 1132(g)(1).
• Reinking v. Phila. Am. Life Ins. Co. (quoted in Quesinberry): reiterates ERISA’s remedial purposes and access-to-courts considerations.
• Williams v. Metro. Life Ins. Co.: cited for abuse-of-discretion review of fee awards.

3.2 Legal Reasoning

A. Denial of benefits (Count One)

The court treated the plan’s discretionary clause as dispositive on the standard of review. Because the plan vested the administrator with “discretionary power to determine all questions” under the plan, the only question became whether the denial was reasonable.

Applying the Booth v. Wal-Mart Stores, Inc. Associates Health & Welfare Plan framework, the panel emphasized process and evidentiary support: the Management Committee gave Kelly an opportunity to submit materials, reviewed call transcripts, considered his claimed damages, and relied on a detailed presentation. Even though one Fidelity remark could be read as implying faster access to “the liquid portion,” the committee reasonably credited the repeated 7–10 business day estimates and the fact that Fidelity completed the transactions within those stated timeframes.

The key move is restraint: the court did not decide what it would have concluded on a clean-slate timeline dispute; it asked only whether the administrator’s account and rationale were within the range of reasonableness supported by substantial evidence.

B. Fiduciary breach (Count Three)

The fiduciary analysis follows ERISA’s two-category structure: named fiduciaries versus functional fiduciaries. Fidelity was not a named fiduciary. The plan and ASA characterized Fidelity’s role as “ministerial recordkeeping and administrative functions.”

The panel acknowledged the principle from Dawson-Murdock v. Nat'l Counseling Grp., Inc. that conveying plan information can be fiduciary activity. But it distinguished situations like Varity Corp. v. Howe—where information affects an employee’s decision about continued participation—from this case, where Kelly had already decided to exit/transfer and was seeking execution details. On that record, Fidelity’s communications were not “discretionary functions” in plan management or administration.

The court then gave an alternative holding: even assuming fiduciary status, there was no breach because Fidelity did not provide investment advice, did not guarantee timing, accurately described estimates overall, and completed the steps within those estimates. A single “stray comment” was insufficient to convert imperfect customer service into actionable fiduciary misrepresentation.

C. ERISA document production (Count Four) — the opinion’s principal doctrinal development

The reversal rests on statutory interpretation of the phrase “contract, or other instrument[] under which the plan is established or operated.” Using Sw. Airlines Co. v. Saxon and Bostock v. Clayton Cnty., the court reads “operated” in its ordinary sense: documents that govern some part of the plan’s process—how the plan “works” or “runs.”

The panel reasoned that, while the plan did not “establish” itself via the ASA (the plan preexisted and authorized the agreement), the ASA concretely governed operational mechanics: participant communications, inquiries, literature fulfillment, balances, performance questions, data and transaction management. These are operational processes even if they are ministerial rather than discretionary.

Crucially, the court clarified Faircloth v. Lundy Packing Co.: Faircloth excluded certain categories (appraisals, minutes) but did not set a rule that only documents defining benefits are disclosable. Instead, the statute’s second prong—documents “under which the plan is ... operated”—captures agreements that define how core administrative tasks are performed, including by third parties.

The remand preserves discretion for the district court on penalties: violation does not automatically equal maximum penalty.

3.3 Impact

• Expanded practical disclosure in the Fourth Circuit: Plan administrators should expect that Administrative Services Agreements (and similar recordkeeping/administration contracts) are likely disclosable upon written request, because they govern operational processes.
• Compliance and litigation posture: Administrators who refuse production on the theory that an ASA “doesn’t describe benefits” face higher risk of § 1132(c)(1) penalties and fee exposure. The safer approach may be to produce with appropriate redactions for privileged or nonresponsive material (where defensible).
• Service providers and fiduciary exposure: The opinion reinforces a protective boundary for recordkeepers: executing transactions and providing process/timing information, without discretionary control or investment advice, typically remains non-fiduciary “ministerial” conduct.
• Benefits-denial claims remain difficult under discretion: The court’s application of Booth underscores that timeline disputes rarely overcome abuse-of-discretion review absent clear contradictions, ignored evidence, or procedural defects.

4. Complex Concepts Simplified

• Abuse of discretion review (ERISA): If the plan grants the administrator discretion, a court asks only whether the decision was reasonable and supported by substantial evidence—not whether the court would have decided differently.
• Booth factors: A checklist used in the Fourth Circuit to assess reasonableness (plan language, evidence, process quality, ERISA compliance, conflicts, etc.).
• Named fiduciary vs. functional fiduciary: A named fiduciary is identified in plan documents; a functional fiduciary is someone who actually exercises the kind of discretionary authority ERISA defines in 29 U.S.C. § 1002(21)(A).
• Ministerial services: Operational tasks (recordkeeping, answering questions, processing transactions) performed within rules set by others—typically not fiduciary because they lack discretion over plan management or assets.
• ERISA disclosure under § 1024(b)(4): Participants can demand certain governing documents. This opinion emphasizes that “operated” is broad enough to include contracts that define how plan administration is carried out—even if they do not list benefit formulas.
• Statutory penalties (§ 1132(c)(1)): If a required document is withheld, a court may (but need not) impose monetary penalties; the amount and whether to award it are discretionary and fact-sensitive.
• In-kind distribution: Moving securities themselves (shares) rather than selling to cash first.
• Net unrealized appreciation (NUA): A tax concept sometimes applicable to employer stock distributions from qualified plans; the opinion treats it as part of Kelly’s motivation, not a source of fiduciary obligation on Fidelity’s part.

5. Conclusion

The Fourth Circuit’s central contribution is its disclosure holding: an Administrative Services Agreement that allocates and governs recordkeeping and administrative processes is an instrument under which an ERISA plan is “operated,” and therefore must be furnished upon request under 29 U.S.C. § 1024(b)(4).

At the same time, the court reaffirmed two limiting principles: (1) where the plan grants discretion, benefits-denial challenges face steep odds under abuse-of-discretion review, and (2) recordkeepers providing process information and executing participant directions generally do not become ERISA fiduciaries absent discretionary control or investment advice.