Fourth Circuit Affirms Denial of Benefits and Rejects Fiduciary Claim Against Recordkeeper, But Holds Administrative Services Agreement Is a Disclosable Plan Document Under ERISA

In Kelly v. Altria Client Services, LLC, — F.4th —-, 2026 WL 2293854 (4th Cir. Aug. 10, 2026), Plaintiff sought to liquidate his 401(k) account in Altria’s Deferred Profit-Sharing Plan for Salaried Employees ahead of a stock market rise he anticipated after the 2020 presidential election. Plaintiff directed Fidelity Workplace Services, LLC, the plan’s corporate recordkeeper, to sell his Altria stock and U.S. Index Fund holdings and to conduct an in-kind distribution of his non-Altria stock, structured to capture net unrealized appreciation tax benefits and with proceeds wired to a Goldman Sachs account. Plaintiff contended that Fidelity did not complete the transactions in time to capture the market gain he predicted and misled him about how quickly he could access the proceeds. After Altria, the plan administrator, denied his claim and the management committee upheld that denial, Plaintiff sued, alleging denial of benefits under 29 U.S.C. § 1132(a)(1)(B), breach of fiduciary duty under § 1132(a)(3), and a claim for statutory penalties under § 1024(b)(4) arising from Altria’s refusal to furnish the Administrative Services Agreement (ASA) between Altria and Fidelity. The district court granted the defendants summary judgment on all claims. The Fourth Circuit affirmed in part, reversed in part, and remanded.

On the denial of benefits claim, the court applied the abuse of discretion standard because the plan granted the administrator discretionary authority to determine all questions arising under the plan. Reviewing Altria’s decision under the Booth factors, the court held that the management committee engaged in a deliberate, principled reasoning process supported by substantial evidence. The committee gave Plaintiff the opportunity to submit materials, considered the transcripts of his calls with Fidelity, and evaluated his damages evidence. The committee acknowledged that a Fidelity representative told Plaintiff on November 2, 2020, that the cash rollover would take only a day or two after the settlement period, but determined that Plaintiff was later told the cash rollover would take approximately three to five business days and the in-kind distribution seven to ten business days, and that Fidelity met those timelines. The court concluded that Altria did not abuse its discretion, treating any conflict of interest arising from Altria’s dual role as one non-dispositive factor.

On the breach of fiduciary duty claim, the court affirmed on two independent grounds. First, Fidelity was not a functional fiduciary. The plan named Altria’s Vice President, Compensation, Benefits and HR Services as the named fiduciary and identified Fidelity as the third-party recordkeeper retained to provide ministerial recordkeeping and administrative functions under the ASA. Performing those ministerial duties did not make Fidelity a functional fiduciary. The court rejected Plaintiff’s argument that Fidelity’s communications about the process and timing of the liquidation amounted to discretionary functions, reasoning that Plaintiff had already decided to move his assets to Goldman Sachs before contacting Fidelity, with his Goldman Sachs advisors on the phone, so Fidelity’s information did not guide an informed choice about continued plan participation. Second, even assuming Fidelity was a functional fiduciary, it breached no duty. Fidelity accurately estimated the time required to complete the transactions, the transactions occurred within those estimates, and the single representative’s comment that the liquid portion could be moved in a day or two was surrounded by repeated seven-to-ten-day estimates that other representatives restated without objection from Plaintiff. The court also affirmed the award of attorney’s fees to Altria and the plan under § 1132(g)(1), noting that the statute permits fees to either party and that the district court adequately applied the Quesinberry factors.

On the statutory penalties claim, the court reversed. Section 1024(b)(4) requires a plan administrator, upon written request, to furnish a copy of the contract or other instrument under which the plan is established or operated. Examining the ordinary meaning of “establish” and “operate” using dictionaries from the time of ERISA’s enactment, the court held that a document under which a plan operates is one that governs some part of the plan’s process. The ASA directed Fidelity to answer calls, communicate with participants, respond to inquiries about the plan, provide fund balances, and manage data and transactions, all of which helped the plan perform part of its process. The court held that the ministerial nature of those duties did not control, because the meaning of “operate” turns on whether the duties help the plan work, not on whether they are discretionary. The court distinguished Faircloth v. Lundy Packing Co., which held that § 1024(b)(4) reaches only formal or legal documents under which a plan is set up or managed, and found its conclusion consistent with decisions of the Seventh and Tenth Circuits. The court held that Plaintiff was entitled to a copy of the ASA, vacated that portion of the district court’s order, and remanded for the district court to evaluate in the first instance whether statutory penalties are appropriate.