If you are a plan sponsor, plan administrator or plan service provider and haven’t yet heard of the Ninth Circuit’s recent opinion in Bugielski v. AT&T Servs., Inc., No. 21-56196 (9th Cir. Aug. 4, 2023), consider this your wake-up call. The Ninth Circuit panel’s reinterpretation of ERISA’s prohibited transaction rules threatens to pour gasoline on the fire of speculative ERISA class actions challenging retirement plan fees.
The long and short of Bugielski is that the court found negotiation of a standard recordkeeping contract would be a prohibited transaction, unless the plan fiduciary could prove the arrangement met one of the applicable exemptions to those rules.
