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 USCA4 Appeal: 21-2267 Doc: 45 Filed: 07/17/2023 Pg: 2 of 26

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.

2 USCA4 Appeal: 21-2267 Doc: 45 Filed: 07/17/2023 Pg: 3 of 26

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