Court Opinion

ID: 9409640
Source: CourtListenerOpinion
Date Created: 2023-07-18 21:00:41.013601+00
Date Added: 2024-06-11T17:20:51.997343
License: Public Domain

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                                               PUBLISHED

                               UNITED STATES COURT OF APPEALS
                                   FOR THE FOURTH CIRCUIT

                                               No. 21-2267

        BENJAMIN REETZ, individually and as the representative of a class of similarly
        situated persons, and on behalf of the Lowes 401(k) Plan,

                             Plaintiff - Appellant,

                      v.

        AON HEWITT INVESTMENT CONSULTING, INC.,

                             Defendants - Appellees,

        LOWE’S COMPANIES, INC.; ADMINISTRATIVE COMMITTEE OF LOWE’S
        COMPANIES, INC.,

                             Defendants.

        Appeal from the United States District Court for the Western District of North Carolina, at
        Statesville. Kenneth D. Bell, District Judge. (5:18-cv-00075-KDB-DCK)

        Argued: December 7, 2022                                       Decided: July 17, 2023

        Before KING and RICHARDSON, Circuit Judges, and KEENAN, Senior Circuit Judge.

        Affirmed by published opinion. Judge Richardson wrote the opinion, in which Judge
        Keenan joined. Judge King wrote an opinion dissenting in part.

        ARGUED: Matthew W.H. Wessler, GUPTA WESSLER PLLC, Washington, D.C, for
        Appellant. Brian D. Boyle, O’MELVENY & MYERS LLP, Washington, D.C., for
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        Appellee. ON BRIEF: Paul J. Lukas, Kai H. Richter, Brock J. Specht, Mark E. Thomson,
        Patricia C. Dana, NICHOLS KASTER, PLLP, Minneapolis, Minnesota; F. Hill Allen,
        THARRINGTON SMITH, L.L.P., Raleigh, North Carolina, for Appellant. Michael G.
        Adams, Nicholas H. Lee, PARKER, POE, ADAMS & BERNSTEIN, Charlotte, North
        Carolina; Jonathan D. Hacker, Shannon M. Barrett, Deanna M. Rice, Washington, D.C.,
        Stuart M. Sarnoff, Laura Aronsson, O’MELVENY & MYERS LLP, New York, New
        York, for Appellee.

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        RICHARDSON, Circuit Judge:

               On behalf of a class, Benjamin Reetz sued Aon Hewitt Investment Consulting for

        investment advice given to Lowe’s Home Improvement to help manage its employees’

        retirement plan. Aon, first as an investment consultant and later as a delegated fiduciary,

        owed the plan fiduciary duties under the Employee Retirement Income Security Act. Reetz

        claims that Aon’s conduct violated the core duties of loyalty and prudence.

               First, the duty of loyalty. While Aon was Lowe’s investment consultant, it pitched

        its delegated-fiduciary services. Like it sounds, such services allow a fiduciary—here, the

        committee that runs Lowe’s plan—to outsource its duties to a third party. Reetz argues

        Aon’s sales efforts were self-motivated and thus violated the duty of loyalty. Also, around

        the same time, Aon recommended that Lowe’s streamline the investment menu it offered

        to plan participants. Reetz suggests that this advice was not solely motivated by the plan’s

        best interest, it was shaded by the desire to land the deal, so it was disloyal.

               Second, the duty of prudence. After Lowe’s accepted the recommendation to

        streamline its investment menu and hired Aon as delegated fiduciary, Aon moved $1 billion

        in plan assets to a relatively untested investment fund that it created. The fund didn’t do

        so well. So Reetz alleges the fund selection and retention breached the duty of prudence.

        He argues that Aon did not seriously consider alternative funds when it invested the plan

        assets in the fund and did not properly monitor the fund once it was chosen.

               After a five-day bench trial, the district court held that Aon, in fact, did not breach

        its fiduciary duties. Reetz appeals, but we affirm. To start, Aon’s sales efforts to obtain

        the delegated fiduciary work were not investment advice, so Aon owed no duty of loyalty.

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        The investment-menu recommendation was investment advice, but we agree with the

        district court that Aon’s recommendation was not motivated by self-interest. And Reetz’s

        contention that Aon’s research conducted before it was Lowe’s delegated fiduciary could

        not discharge its duty of prudence also falls short. Aon engaged a reasoned decision-

        making process by reviewing comparable funds. It makes no difference here that the

        review occurred when it established the fund (which was before Aon became Lowe’s

        delegated fiduciary). Plus, it continued to monitor the fund. So Aon did not violate the

        duty of prudence. We affirm.

        I.     Background

               Lowe’s Home Improvement sponsors a retirement plan for its employees. The

        plan—one of the largest in the country—maintains around $5 billion in assets for more

        than 260,000 employee participants. Lowe’s tasks the Administrative Committee of

        Lowe’s Companies, Inc. with running the plan. This Committee owes fiduciary duties to

        the plan. But managing the plan is difficult for the Committee because it primarily consists

        of non-investment professionals. In comes Aon.

               Aon provides investment consulting and advice. Lowe’s, through the Committee,

        hired Aon in 2008 as an investment consultant. In that role, Aon owed the plan fiduciary

        duties and advised the Committee—which retained ultimate decision-making authority—

        on plan management. With Aon’s help, the Committee crafted a menu of options from

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        which plan participants could “construct their own investment portfolios” personalized to

        their needs and risk tolerances. 1 J.A. 1851.

               During Aon’s tenure as investment consultant, it was separately trying to get a

        foothold in the delegated-fiduciary market. 2 Delegated-fiduciary services allow plan

        administrators—like the Committee—to take a backseat role in plan management. While

        a plan administrator solicits advice from investment consultants, with a delegated fiduciary,

        the administrator outsources primary responsibility for plan management.

               And Aon had a strategy to push its new services: pitch preexisting consulting

        clients. This strategy—selling a new service to a client who uses your other services—is

        called “cross-selling.” Lowe’s, as a preexisting consulting client with a massive plan, was

        in Aon’s crosshairs.

               To complete a “cross-sell,” Aon would enlist the investment consultants assigned

        to that client. 3 After all, the consultants already knew the client and had relationships with

               1
                 ERISA covers two types of retirement plans: defined-contribution and defined-
        benefit plans. Lowe’s plan is a defined-contribution plan. With this type of plan, an
        employee contributes—and decides how to invest—a portion of his paycheck to retirement
        savings. The employee ultimately receives the returns of his investments as retirement
        income. In contrast, under a defined-benefits plan, the employer guarantees a specific
        amount of income to the employee in retirement. Both types of plans have upsides and
        downsides. One downside of the defined-contribution plan is that employees—through
        insufficient contributions or poorly managed investments—may not achieve adequate
        retirement income.
               2
                 Aon had previously offered delegated-fiduciary services for clients with defined-
        benefits plans, but it wanted to expand their services to clients with defined-contribution
        plans.
               3
                 In fact, Aon’s consultants were assigned “revenue goals” tied to selling delegated-
        fiduciary services. J.A. 1874. And they received bonuses for “increasing revenue/cross-
        selling.” J.A. 1874.
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        the right players. Aon’s consultants for Lowe’s during the relevant time were first Brian

        Abshire and Rob Van Den Brink. Then when Van Den Brink left, he was replaced by

        Jacob Punnoose, an aggressive cross-seller. Using its consultants, one strategy Aon might

        use to introduce clients to delegated-fiduciary services was to start discussing plan

        structure. With that in mind, we turn to Aon’s recommendations to Lowe’s.

               Around the end of 2012, Aon and the Committee became concerned with the

        investment menu offered to participants. It was too complicated. 4 So the Committee asked

        Aon to present alternative plan structures. Aon obliged at a June 2013 meeting, where it

        recommended streamlining the menu with more intuitively named options. But the

        Committee didn’t jump at the recommendation; instead, they requested a “ground up”

        review to identify “the ideal plan.” J.A. 1865.

               Aon reported its findings from the “ground up” review at a November 2013 meeting.

        Through Abshire and Punnoose—who had replaced Van Den Brink between the June and

        November 2013 meetings—Aon outlined three possible structures:               Traditional,

        Alternative, and Emerging. The Traditional structure was effectively the status quo for

        Lowe’s. The Emerging structure proposed drastic streamlining, whittling the menu down

        to a few investment options. And those options had objective-based names that were easy

        to grasp (e.g., the Growth option and the Inflation Protection option). The Alternative

               4
                 There were several overlapping concerns. The twelve options offered were too
        numerous and created a paradox of choice. The options were not intuitively named. And
        of the twelve options, eight were equity funds, which—the concern went—resulted in an
        over-allocation to equity markets.

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        structure was something of a middle-ground. It narrowed the plan menu but not to the

        same degree as the Emerging structure. Aon’s official recommendation at that time was

        the Alternative structure.

               But the Committee was still not ready to decide. So Aon again presented on plan

        structure at a December 2013 meeting. Shortly before the meeting though, a significant

        event occurred: Punnoose mentioned Aon’s delegated-fiduciary services to Lowe’s for the

        first time. He had been speaking with Aon’s sales executives on how to pitch Lowe’s. And

        he wanted to give a presentation on the services at the December meeting, but it was

        scrapped when Aon’s compliance compartment failed to approve it. Still, Punnoose

        mentioned the service in a pre-meeting email to Committee members. He sent information

        about Aon’s delegated-fiduciary services and said it “dovetails nicely” with Aon’s

        recommended changes to the plan structure. J.A. 1877. Lowe’s essentially rebuffed the

        overture.

               During the December 2013 meeting, Aon again recommended the Alternative

        structure. And the Committee seemed to agree. So going away from the meeting, Aon

        planned to next present on implementing the Alternative structure. But before it had the

        chance, there were delays: a cancelled March 2014 meeting and a June 2014 meeting that

        took up other matters. By the time the Committee was ready to turn back to plan structure,

        they needed another high-level discussion. So an October 2014 meeting was scheduled for

        that purpose.

               Before the October 2014 meeting, Aon againt raised its delegated-fiduciary

        services. It requested that the Committee allow Aon’s sales team to accompany and pitch

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        the delegated-fiduciary services. The Committee agreed. So Aon’s sales team, with

        Abshire and Punnoose’s help, prepared a pitch. At the meeting, the consultants and sales

        team presented separately. During the first half, Abshire and Punnoose presented Aon’s

        proposed plan structure. Then the sales team pitched Aon’s delegated-fiduciary services.

        At no time—during the October 2014 meeting or otherwise—did Aon recommend that

        Lowe’s engage a delegated fiduciary, much less recommend Aon’s services. That said,

        there was no clear delineation between the discussions of the alternative structure and the

        delegated-fiduciary services at the meeting. There was a single PowerPoint presentation.

        And the sale’s pitch started with a slide that bridged the topics: “Implementation &

        Fiduciary Considerations.” J.A. 4221.

               At the end of the October 2014 meeting, the new plan structure went to a vote.

        Despite earlier interest in the Alternative structure, the Committee ultimately decided (with

        several new members) that the Emerging structure would be “easier to communicate to

        participants.” J.A. 6206. So the Committee formally adopted the Emerging plan structure.

        Although the Committee understood that delegated-fiduciary services was a distinct matter

        from plan structure (i.e., the Emerging structure could be implemented with or without a

        delegated fiduciary), they also went ahead and voted to engage a delegated fiduciary.

        But—at least to Aon’s belief 5—the Committee had not yet selected a delegated fiduciary.

        So Aon’s sales pitch continued. Aon held an informal December 2014 meeting with

               5
                There was a mixed record as to whether the Committee also selected Aon as the
        delegated fiduciary at the October 2014 meeting. But even if they did, the record is clear
        that Aon did not think it had been selected yet and continued its sales efforts.
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        several Committee members to “provid[e] additional information about Aon’s delegated

        services and fees.” J.A. 1887. Later that month, Aon officially got the nod. This was a

        huge win for Aon. Not only would it increase its annual fees from Lowe’s by nearly half-

        a-million dollars, but it also put them on the map in the competitive delegated-fiduciary

        market.

               So Aon closed the deal. Reetz claims this was a conflict of interest. But that’s not

        all. Reetz also challenges Aon’s conduct after becoming delegated fiduciary. Reetz is

        dissatisfied with one fund Aon chose for class assets. To understand the allegation, we

        need to take a step back. When Aon moved into the delegated-fiduciary market, it created

        a Collective Trust. The trust was a vehicle for Aon to create investment funds catered to

        delegated-fiduciary clients. This included three multi-asset-class objective-based funds:

        the Growth Fund, Income Fund, and Inflation Strategy Fund. Using more than one asset

        class—equities and bonds, for example—these funds sought to achieve a given objective:

        growth, income, or inflation protection.

               Aon’s role in running each fund was a manager-of-managers role. That is, the fund

        invested in other funds—sometimes called a fund of funds. Aon dictated asset allocations

        in the fund. And it chose various asset managers (all of whom were unaffiliated with Aon).

        But Aon themselves did not pick the assets to invest in, the asset managers did. Aon’s

        management of the asset managers was done through its Delegated Portfolio Oversight

        Committee.

               The Growth Fund—the only fund at issue—was essentially the trust’s equity fund.

        In developing the fund, Aon reviewed alternative “growth” funds on the market. But it

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        found that none aligned with its vision. It wanted an equity fund that “would produce

        returns similar to global equity over the long run, but with less volatility and more

        protection against losses in down markets.” J.A. 1902. Simply put, the fund wouldn’t

        crush it in a hot market but would have greater downside protection. Aon struck this

        balance by including non-equity assets in the fund to protect against equity overexposure.

               When Aon became the Committee’s delegated fiduciary, “it was up to Aon to pick”

        which investment fund to use for the three objective-based options 6 in the Emerging plan

        menu. J.A. 1888. It didn’t take Aon long to make its selections. It chose the Growth Fund

        from its collective Trust as the Emerging structure’s Growth option. In fact—given that

        Aon was tracking the Growth Fund’s performance, and it was already familiar with other

        options from its market review during the creation of the Growth Fund—it did not compare

        the Growth Fund to comparable funds at the time of selection. Once the fund was chosen,

        all plan assets previously invested in the plan’s eight equity options were transferred to the

        Growth Fund (unless the participant directed otherwise). But this all came as no surprise

        to Lowe’s; it had “effectively assumed that Aon would likely use its own funds from the

        time that Aon was selected as the delegated fiduciary.” J.A. 1891.

               While unsurprising, the fund might be described as an unconventional choice. It

        didn’t have much of a record. And the record it did have was underwhelming. At the time

               6
                 The three objective-based options in the Emerging structure investment menu
        mirrored the investment funds in the trust. There was the Income option, Growth option,
        and Inflation Protection option. Only Aon’s selection for the Growth option is at issue.
        But it may not come as a surprise that Aon also paired the Income option with the Income
        Fund and the Inflation Protection option with the Inflation Protection Fund.
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        of selection, the Growth Fund: “(i) had only two years of performance history, (ii) was in

        the bottom 10% of its peers over all periods, (iii) was included in only two other retirement

        plans in the country, and (iv) was not included in any similarly-sized retirement plans.”

        J.A. 1908. Further, relative to the otherwise comparable funds, the Growth Fund had few

        assets under management—the $1 billion from Lowe’s was nearly three-quarters of the

        fund’s assets.

                Returns for investments in equities were “substantially higher” than projected

        during the relevant period. J.A. 1906. Unfortunately for the fund participants, the Growth

        Fund’s asset allocation meant that it didn’t fully capitalize on these strong markets. But as

        designed, the Growth Fund showed less volatility. And as markets shifted in early 2021,

        the Growth Fund “performed very well.” J.A. 1920. Still, there is no avoiding the bottom

        line:   the fund’s performance “lagged the returns of comparable growth funds and

        benchmarks.” J.A. 1912. And with so much money invested, even a small difference in

        rate of returns results in eye-popping differences in returns. By some calculations, if plan

        assets had been invested in other funds, the class would have between $70 and $277 million

        more saved for retirement. So plan participants were not happy.

                Alleging that Lowe’s, the Committee, and Aon breached their fiduciary duties,

        Reetz—a former Lowe’s employee and participant in the plan—filed this class action. A

        class was certified of all plan participants “whose Plan account balances were invested in

        the Aon Growth Fund at any time on or after October 1, 2015.” J.A. 1846 (cleaned up).

        After the district court denied the parties’ cross-motions for summary judgment, Lowe’s

        and its Committee settled with the class. But Aon elected to go to trial. The district court

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        held a five-day bench trial. Then, with a cogent and comprehensive 120-page order, it

        found for Aon and entered final judgment.

        II.    Discussion

               Aon owed fiduciary duties to the plan under ERISA, including the duties of loyalty

        and prudence. See 29 U.S.C. § 1104(a). The duty of loyalty requires that a fiduciary

        “discharge his duties … solely in the interest of the participants.” § 1104(a)(1)(A). The

        duty of prudence requires the fiduciary to act “with the care, skill, prudence, and diligence

        under the circumstances then prevailing that a prudent man acting in a like capacity and

        familiar with such matters would use.” § 1104(a)(1)(B). The district court correctly held

        that Aon adequately discharged both duties.

               A.     Loyalty

               Reetz argues that Aon violated the duty of loyalty in two ways. First, by cross-

        selling its delegated-fiduciary services. But under ERISA, § 1104’s duties only attach “to

        the extent” a fiduciary is acting in his capacity as fiduciary. See 29 U.S.C. § 1002(21)(A).

        Here, that means giving investment advice. Selling services is not investment advice. So

        Aon didn’t fail to discharge a duty; it owed no duty to begin with. Second, he alleges Aon

        violated the duty of loyalty by advising Lowe’s to change plan structure. This was

        investment advice, so Aon owed the duty of loyalty. Reetz argues that the menu advice

        was shaded by Aon’s desire to sell its services. So—since the duty of loyalty is absolute—

        he contends the advice violated the duty. The problem for Reetz is the bench-trial record

        shows Aon’s advice was solely motivated by benefitting plan participants.

                      a. Cross-selling

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               Fiduciary status under ERISA “is not an all-or-nothing concept.” Darcangelo v.

        Verizon Commc’ns, Inc., 292 F.3d 181, 192 (4th Cir. 2002) (quoting Custer v. Sweeney, 89

        F.3d 1156, 1162 (4th Cir. 1996)). A person may be a fiduciary for some purposes but not

        others. See Pegram v. Herdrich, 530 U.S. 211, 225–26 (2000); see also DiFelice v. U.S.

        Airways, Inc., 497 F.3d 410, 418 (4th Cir. 2007). True, “ERISA does require . . . that the

        fiduciary with two hats wear only one at a time, and wear the fiduciary hat when making

        fiduciary decisions.” Pegram, 530 U.S. at 225. But the threshold question remains whether

        the fiduciary “was acting as a fiduciary (that is, was performing a fiduciary function) when

        taking the action subject to complaint.” Id.; see Peters v. Aetna Inc., 2 F.4th 199, 230 (4th

        Cir. 2021). And “we apply a functional analysis in determining if a party acts as a fiduciary

        . . . with regard to particular conduct.” DiFelce, 497 F.3d at 418 (citing Pegram, 530 U.S.

        at 226).

               Determining whether a person was performing a fiduciary function starts with

        ERISA’s text. Section 1002 says a person only acts as a fiduciary “to the extent” it engages

        in certain conduct. § 1002(21)(A). This conduct includes “render[ing] investment advice

        for a fee or other compensation.” Id. 7 Regulations implementing ERISA provide more

        color, equating “rendering investment advice” with “advice to the plan as to the value of

               7
                 It also includes conduct “to the extent” the fiduciary “exercises any discretionary
        authority or discretionary control respecting management of such plan or exercises any
        authority or control respecting management or disposition of its assets” or “has any
        discretionary authority or discretionary responsibility in the administration of such plan.”
        § 1102(21)(A). Reetz does not argue, and there is no reason to think, that Aon’s sales
        efforts constitute this type of conduct.
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        securities or other property, or makes recommendation as to the advisability of investing

        in, purchasing, or selling securities or other property.” 29 C.F.R. § 2510.3-21(c)(1)(i).

        Reetz argues that by pitching delegated-fiduciary services to Lowe’s, Aon was giving

        “investment advice”—because deciding whether to use the service fits under the umbrella

        of investment strategy. Therefore, he argues, Aon was wearing its fiduciary hat when

        pitching its delegated-fiduciary services and owed the duty of loyalty.

                  Reetz’s position can’t stand. Start with the idea that selling (but not yet cross-

        selling) services is not investment advice. For this point, there’s plenty of out-of-circuit

        case law. See, e.g., Santomenno v. Transamerica Life Ins. Co., 883 F.3d 833, 837–38 (9th

        Cir. 2018) (“[A] plan administrator is not an ERISA fiduciary when negotiating its

        compensation with a prospective customer . . . [because it is] not rendering investment

        advice.”); McCaffree Fin. Corp. v. Principal Life Ins. Co., 811 F.3d 998, 1002–03 (8th Cir.

        2016); Renfro v. Unisys Corp., 671 F.3d 314, 324 (3d Cir. 2011); Hecker v. Deere & Co.,

        556 F.3d 575, 583 (7th Cir. 2009). And it makes perfect sense. When trying to sell

        services, a hopeful fiduciary does not render investment advice. See Santomenno, 883 F.3d

        at 838.

                  Is there good reason not to extend the same analysis to cross-selling? No. Just like

        on an initial sale or negotiation, when a cross-seller pitches his other services, he is

        performing an “arms-length negotiation” that doesn’t constitute a fiduciary function.

        McCaffree, 811 F.3d at 1002. The only aspect of the relationship that has changed is the

        cross-seller does owe fiduciary duties in other capacities, while with the initial sale, no

        fiduciary duties have attached yet. See Renfro, 671 F.3d at 324 (reasoning that when selling

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        the initial services, an entity “owes no fiduciary duty” because it is “not yet a plan fiduciary

        at the time”). You might think that makes a difference. Maybe the cross-seller’s fiduciary

        duties bleed through to the new sales effort. But that would flout the Supreme Court’s

        clear mandate that the “central inquiry is whether the party was acting as an ERISA

        fiduciary ‘when taking the action subject to complaint.’” Santomenno, 883 F.3d at 838

        (9th Cir. 2018) (quoting Pegram, 530 U.S. at 226).

               Aon’s sales efforts were not investment advice. Accordingly, it was not acting as a

        fiduciary so owed no fiduciary duties.

                       b. Plan structure

               When Aon advised Lowe’s about the investment menu offered to plan participants,

        it was acting as a fiduciary. So it was required to act loyally. The duty of loyalty stems

        from § 1104’s charge that a fiduciary act “solely” in the plan’s interest. § 1104(a)(1)(A).

        The duty is “absolute,” Bedrick v. Travelers Ins. Co., 93 F.3d 149, 154 (4th Cir. 1996),

        meaning the fiduciary “must exclude all selfish interest,” Pegram, 530 U.S. at 224 (quoting

        G. Bogert & G. Bogert, Law of Trusts and Trustees § 543 (rev.2d ed. 1980)). There can

        be “no balancing of interests,” Bedrick, 93 F.3d at 154.

               The duty, however, does not mean a fiduciary is disqualified whenever it has a

        conflict of interest. See, e.g., DiFelice, 497 F.3d at 421. Nor does it necessarily mean that

        a fiduciary acts disloyally where the proposed action aligns with its own interest. See

        Donovan v. Bierwirth, 680 F.2d 263, 271 (2d Cir. 1982). But it does mean that a fiduciary

        must act as if it is free of any conflict. Bedrick, 93 F.3d at 154. In short, a fiduciary can

        have self-interest, it just can’t act on it.

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               Reetz says Aon, as the fiduciary, gave its advice to streamline the investment menu

        to advance its own interest in selling delegated-fiduciary services. If true, Aon violated its

        duty of loyalty. See DiFelice, 497 F.3d at 418–19 (“Fiduciaries must . . . make any

        decisions in a fiduciary capacity with ‘an eye single to the interests of the participants and

        beneficiaries.’” (quoting Kuper v. Iovenko, 66 F.3d 1447, 1458 (6th Cir. 1995))). Being

        motivated by self-interest first requires the existence of self-interest. Reetz says Aon was

        interested in streamlining the investment menu because it increased the chances of Lowe’s

        hiring a delegated fiduciary, which increased the chances of Lowe’s hiring Aon as

        delegated fiduciary, which would increase Aon’s fees from Lowe’s. Some record evidence

        supports this theory, and Aon does not dispute that a changeup in the investment menu

        played to its interest. 8

               So Aon had an interest in Lowe’s adopting a streamlined menu. But the problem

        for Reetz is he must also show that Aon acted on that interest—that is, it failed to act as if

        it were free of any conflict. See Bedrick, 93 F.3d at 154. And, to the contrary, the district

        court found—in a factual finding to which we give deference—that Aon did not act

        disloyally. Reetz reads the district court’s order differently. He says the district court held

        that Aon’s employee Punnoose acted disloyally by “allow[ing] his sales efforts to color his

        restructuring recommendations.” Appellant’s Br. at 34–35 (quoting J.A. 1938). He argues

               8
                You might think that streamlining the menu would cut the other way. A simplified
        investment menu would reduce the burden of administering the plan, thereby decreasing
        the appeal of delegated-fiduciary services. That said, Aon’s Head of Delegated Product
        and Business Development testified that “one way” consultants could introduce delegated-
        fiduciary services to clients was through a discussion on plan structure. J.A. 140. And
        Aon doesn’t deny that streamlining the investment menu was to its advantage.
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        the district court then went astray by weighing his disloyal conduct against Abshire’s loyal

        conduct. But this mischaracterizes the district court’s order. The district court did not

        weigh the loyal and disloyal conduct; it weighed the evidence to find Aon, as the fiduciary,

        was not motivated by self-interest. Not only is that permissible, it’s demanded.

               A quick review of that other evidence helps explain the district court’s finding. The

        foundational June 2013 presentation where Aon recommended structural change was

        requested by Lowe’s given certain challenges the plan was facing. There was no evidence

        that Aon had “any thought of starting a sales effort in developing the June 2013

        presentation.” J.A. 1936. Even when Aon’s sales efforts were in full stride by the October

        2014 presentation, their investment advice remained evenhanded.                The written

        recommendations      at   that   meeting    were   consistent   with   Aon’s   longstanding

        recommendation: adopt the Alternative structure, “which was less likely to lead to the

        engagement of a delegated fiduciary.” J.A. 1936. And while the Committee’s meeting

        minutes recorded an “ultimate recommendation” of the Emerging structure, Aon

        “present[ed] a balanced view between the Alternative and Emerging structures.” J.A.

        1873. In fact, when the Committee started tilting towards the Emerging structure during

        the meeting—in part because they thought it would be “easier to communicate to

        participants,” J.A. 6206—Aon suggested adding a tier of passively managed funds which

        likely would have reduced any fee they were entitled to as a delegated fiduciary. So Aon

        acted as if it were free of any conflict.

               In considering this evidence after the bench trial, the district court articulated the

        correct legal standard—and we will not lightly assume it disregarded it. See J.A. 1929

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        (“There is no balancing of interests; ERISA commands undivided loyalty to the plan

        participants.” (quoting Bedrick, 93 F.3d at 154)). Aon’s recommendation to streamline the

        investment menu may have incidentally benefitted its own interest. But, because that

        interest did not motivate Aon’s recommendation, it did not violate the duty of loyalty.

               B.     Prudence

               The duty of prudence is shorthand for a fiduciary’s responsibility to act “with the

        care, skill, prudence, and diligence under the circumstances then prevailing that a prudent

        man acting in a like capacity and familiar with such matters would use in the conduct of an

        enterprise of a like character and with like aims.” § 1104(a)(1)(B). As § 1104 makes clear,

        the content of the duty is defined based on the “circumstances then prevailing.” Id. This

        means it is a context-specific duty. See Fifth Third Bancorp v. Dudenhoeffer, 573 U.S.

        409, 425 (2014); see also Tatum v. RJR Pension Inv. Comm., 761 F.3d 346, 360 (4th Cir.

        2014) (referring to the analysis as a “totality-of-the-circumstances inquiry”). Discharging

        the duty in the context of investment decisions typically requires “investigat[ing],

        research[ing], and review[ing] the options.” Plasterers’ Loc. Union No. 96 Pension Plan

        v. Pepper, 663 F.3d 210, 216 n.8 (4th Cir. 2011). But the duty of prudence is not results

        oriented; it looks for a reasoned process. See DiFelice, 497 F.3d at 420 (“[A] court must

        ask whether the fiduciary engaged in a reasoned decisionmaking process”). Prudence does

        not mean clairvoyance. The duty does not demand a fiduciary—with the benefit of

        hindsight—make the optimal investment. See id. at 424. Instead, a fiduciary “who

        appropriately investigate[s] the merits of an investment decision prior to acting [ ] easily

        clear[s] this bar.” Tatum, 761 F.3d at 358.

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               Reetz challenges Aon’s selection and retention of the Growth Fund as the

        investment vehicle for the Growth option in Lowe’s retirement plan. Such a challenge is

        two-fold: there is the “duty to exercise prudence in selecting investments” and the

        “continuing duty to monitor [those] . . . investments and remove imprudent ones.” Tibble

        v. Edison Int’l, 575 U.S. 523, 529 (2015). Upon review, we agree with the district court

        that Aon acted prudently.

               Start with the selection of the Growth Fund. Aon created the Growth Fund after an

        extensive review of the available options on the market left them dissatisfied. So by the

        time Aon was selected as delegated fiduciary, it had already decided where the plan’s

        Growth-option assets were headed: the Growth Fund. This means that—once chosen as

        delegated fiduciary—Aon did not “consider[ ] any funds other than the Aon Growth Fund

        for the ‘Growth’ equity option in the Lowe’s Plan.” J.A. 1893. According to Reetz, that’s

        the end of the analysis—it makes no difference whether Aon engaged a full consideration

        of comparable funds before becoming delegated fiduciary. But Reetz’s position ignores

        the context specific aspect of the duty of prudence. 9 See Fifth Third Bancorp, 573 U.S. at

        425. A simple example makes the point. Imagine that one week before becoming a

        fiduciary, an investment advisor does an exhaustive review of options in the market.

        Would anyone contend the advisor—a week later when he becomes a fiduciary—must re-

        review the market? No, otherwise our instruction that when reviewing a decision for

        prudence, there can be no “uniform checklist” and “a variety of actions can support a

               9
                Keeping this rule in mind, we’ve rejected similar attempts to impose per se rules
        on the duty-of-prudence analysis in other ERISA cases. See Tatum, 761 F.3d at 360.
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        finding” of prudence depending on the circumstances, would be meaningless. Tatum, 761

        F.3d at 358. So the question becomes whether Aon—based on the “circumstances then

        prevailing”—adequately investigated other investment options. See § 1104(a)(1)(B)

               On that question, the record is clear. When Aon created the Growth Fund, it

        considered “other potential investment funds and strategies.” J.A. 1893.         In fact, it

        considered the very funds that Reetz now points to. So Aon “investigat[ed], research[ed],

        and review[ed] the options.” See Pepper, 663 F.3d at 216 n.8. But it just didn’t like what

        it saw. The available funds did not allocate assets in a way “consistent with Aon’s

        thinking.” J.A. 1893. In other words, Aon thought it could do better. So in a sense, Aon

        went beyond the duty. It didn’t merely investigate, it created. 10 It tweaked the available

        options to chart its own path based on its market research. And while Aon created the

        Growth Fund in 2013, it had been “closely tracking the Growth Fund’s performance since

        its inception and understood how it compared against benchmark and peer funds” when it

        selected the Fund for Lowes. J.A. 1898. Maybe—in hindsight—Aon was wrong that it

        could do better (or maybe it was right and hit the market at the wrong time). Again, though,

        prudence looks for process, not results. The process here was reasoned and calculated to

        maximize the benefits of the plan, so Aon cleared the prudence bar.

               10
                  In this respect, Aon’s decision is little different from a fiduciary’s decision to
        create a custom “white label” fund. Such funds “are commonly used by large plans . . . to
        build a plan-specific, diversified portfolio at a reasonable fee, using multiple investment
        managers.” J.A. 1894. The Collective Trust, of which the Growth Fund was a part, was
        essentially a collection of white-label funds available to Aon’s delegated-fiduciary clients
        at lower cost due to pooling of assets across plans.
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               Now to the retention of the Growth Fund. The duty of prudence doesn’t end when

        an investment is chosen. To the contrary, when “determining the contours of an ERISA

        fiduciary’s duty,” we look to the common law of trusts. See Tibble, 575 U.S. at 528–29.

        There, we find “a continuing duty to monitor trust investments and remove imprudent

        ones.” Id. at 529; see id. at 529–30. Although the Supreme Court has left open the “scope”

        of that duty, 11 we know that ERISA fiduciaries have “a continuing duty of some kind.” Id.

        at 530 (emphasis added). No matter the “scope” under ERISA, Aon cleared it. While

        Reetz argues that Aon dumped assets in the Growth Fund and never looked back, the record

        shows otherwise.

               Aon staffed a committee to monitor its funds, including the Growth Fund: the

        Delegated Portfolio Oversight Committee.          Through its Oversight Committee, Aon

        reviewed the underlying managers’ work (recall that Aon did not themselves pick

        investments; it was a manager of managers). When Aon saw something it didn’t like, it

               11
                   The Court cited several treatises on trusts in feeling out possible formulations of
        the duty but did not pick one. See Tibble, 575 U.S. at 529–30 (“[T]he trustee cannot assume
        that if investments are legal and proper for retention at the beginning of the trust, or when
        purchased, they will remain so indefinitely.” (quoting A. Hess, G. Bogert, & G. Bogert,
        Law of Trusts and Trustees § 684, pp. 145–146 (3d ed. 2009))); id. at 530 (“A trustee’s
        duties apply not only in making investments but also in monitoring and reviewing
        investments, which is to be done in a manner that is reasonable and appropriate to the
        particular investments, courses of action, and strategies involved.” (quoting The
        Restatement (Third) of Trusts § 90, Comment b, p. 295 (2007))); id. at 529 (“[C]ontinuing
        responsibility for oversight of the suitability of the investments already made.” (quoting
        The Uniform Prudent Investor Act § 2, Comment, 7B U.L.A. 21 (1995))); id. at 529–30
        (“[W]hen the trust estate includes assets that are inappropriate as trust investments, the
        trustee is ordinarily under a duty to dispose of them within a reasonable time.” (quoting 4
        A. Scott, W. Fratcher, & M. Ascher, Scott and Ascher on Trusts § 19.3.1, p. 1439 (5th ed.
        2007))).
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        changed it.   It periodically altered asset allocation and swapped out the underlying

        managers. For example, Aon made strategic shifts to the Growth Fund. In 2018, it

        “slight[ly] increase[d] . . . the Growth Fund’s equity exposure.” J.A. 1919. Then, in 2020,

        it changed the types of non-equity assets used to avoid equity overexposure. And Aon

        didn’t just track the performance of the underlying managers, it tracked the overall

        performance of the Growth Fund. In fact, it “closely monitored” the fund, J.A. 1956, by

        “review[ing] extensive quantitative and qualitative information about the Growth Fund’s

        performance,” J.A. 1909. As part of this monitoring, Aon compared the Growth Fund to

        its benchmarks and peer funds.

               True, Aon never asked whether it should abandon the Growth Fund for another fund

        in so many words. But in this context, it wasn’t required to. As the district court found,

        “Aon over time exercised its expertise to keep apprised of alternate investments in the

        market” and compared the Growth Fund to those alternatives. J.A. 1956. And, through its

        manager-of-managers role, it could—and did—make underlying tweaks to the Growth

        Fund without jumping ship entirely. Together, these actions discharged Aon’s “continuing

        duty to monitor . . . investments and remove imprudent ones.” Tibble, 575 U.S. at 529.

                                       *             *             *

               While Aon was recommending that Lowe’s restructure its retirement plan, it was

        also pitching Aon’s delegated-fiduciary services. Reetz says the investment advice was

        intended to spur Lowe’s into hiring a delegated fiduciary, so Aon violated its duty of

        loyalty. That’s not so. Selling services is not investment advice. And the actual investment

        advice—streamlining the plan menu—was not informed by Aon’s desire to sell its services.

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        So Aon did not violate the duty of loyalty. After becoming Lowe’s delegated fiduciary,

        Aon moved plan assets to its proprietary investment fund. Reetz challenges that decision

        as breaching the duty of prudence. But Aon considered alternative investment funds when

        creating its fund. And it continued to monitor the fund’s performance. That satisfied Aon’s

        duty to engage a “reasoned decision-making process.” So Aon did not breach the duty of

        prudence either. Accordingly, the district court is

                                                                                     AFFIRMED.

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        KING, Circuit Judge, dissenting in part:

               Because defendant Aon Hewitt Investment Consulting, Inc. (“Aon”) breached the

        duty of loyalty it owed to the plaintiffs under the Employee Retirement Income Security

        Act of 1974 (“ERISA”), I dissent from the majority’s ruling on that issue. As explained

        below, I would reverse the judgment on the duty of loyalty issue and remand for further

        appropriate proceedings, including calculation of damages. 12

                                                       I.

               It is axiomatic that “[t]he fiduciary of an ERISA plan must act ‘solely in the interest

        of the participants and beneficiaries and for the exclusive purpose of providing benefits . . .

        and defraying reasonable expenses.’” See Bedrick v. Travelers Ins. Co., 93 F.3d 149, 154

        (4th Cir. 1996) (quoting 29 U.S.C. § 1104(a)(1)(A)) (emphasis added). Indeed, the “duty

        of loyalty” has been recognized by our Court as “a most difficult task” to fulfill. Id. In the

        words of our venerable fallen colleague Judge K.K. Hall,

               [e]ven the most careful and sensitive fiduciary . . . may unconsciously favor
               its profit interest over the interests of the plan, leaving beneficiaries less
               protected than when the trustee acts without self-interest and solely for the
               benefit of the plan.

        Id. (internal quotation marks omitted). To that end, “[t]here is no balancing of interests;

        ERISA commands undivided loyalty to the plan participants.” Id. (emphasis added). More

               12
                  I agree with the majority’s ruling that Aon did not breach ERISA’s duty of
        prudence. See, e.g., Tussey v. ABB, Inc., 850 F.3d 951, 958 (8th Cir.), cert. denied, 138 S.
        Ct. 281 (2017) (recognizing that “[a] fiduciary can . . . breach its [duty of loyalty] by acting
        on improper motives” but can nevertheless render prudent fiduciary investment advice).
        Accordingly, my disagreement is limited to the duty of loyalty issue.
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        specifically, “[f]iduciaries must . . . make any decisions in a fiduciary capacity with an eye

        single to the interests of the [plan] participants.” See DiFelice v. U.S. Airways, Inc., 497

        F.3d 410, 418 (4th Cir. 2007) (internal quotation marks omitted) (emphasis added).

                                                        II.

               Contrary to my friends in the majority, I am satisfied that Aon — which was

        indisputably an ERISA fiduciary rendering “investment advice” to the Lowe’s 401(k)

        retirement plan — did not “make [all] decisions . . . with an eye single to the interests of

        the . . . [plan] participants.” See DiFelice, 497 F.3d at 418 (emphasis added); Bedrick, 93

        F.3d at 154. That is, Aon “failed to act as if it were free of any conflict.” See ante at 16.

        Perhaps that point is best illustrated by the district court’s findings of fact, which tellingly

        reveal the extent of Aon’s self-serving and disloyal conduct. See, e.g., J.A. 1872 (court

        finding that Aon senior fiduciary consultant Punnoose did not act with “singular focus”

        toward Lowe’s 401(k) retirement plan but was “focused on . . . selling additional services

        and obtaining increased fees”); id. (court finding that Punnoose was “focus[ed] on

        encouraging, arranging and participating” in cross-selling delegated services “to burnish

        his candidacy to become a Partner at Aon”); id. at 1938 (court finding that Punnoose

        “allowed his sales efforts to color his restructuring recommendations” for Lowe’s 401(k)

        retirement plan, and that fiduciary investment advice discussions were utilized by Aon “as

        a springboard for the benefit of [its] . . . delegated services sales effort”). 13

               13
                  Citations herein to “J.A. ___” refer to the contents of the Joint Appendix filed by
        the parties in this appeal.
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                                                    III.

               In these circumstances, it is readily apparent that the fiduciary investment advice

        Aon provided to the Lowe’s 401(k) retirement plan was made “at least in part to enhance

        [Aon’s] position.” See Leigh v. Engle, 727 F.2d 113, 129 (7th Cir. 1984). Pursuant to our

        Court’s longstanding precedent, that alone constitutes a breach of ERISA’s exacting duty

        of loyalty. See, e.g., Bedrick, 93 F.3d at 154; DiFelice, 497 F.3d at 418.

               I respectfully dissent in relevant part and would reverse.

                                                     26