By: Angela M. Stockbridge

On October 30, 2026, a participant in the TE Connectivity Retirement Savings and Investment Plan filed a putative class action in the U.S. District Court for the Eastern District of Pennsylvania against TE Connectivity Corporation, its Retirement Administrative Committee, its Investment Committee, and up to 30 unnamed individual fiduciaries (Silva v. TE Connectivity Corp., No. 2:26-cv-8320). The complaint combines two of the most active theories in ERISA litigation today: excessive recordkeeping and administrative (RKA) fees, and the use of plan forfeitures to reduce employer contributions instead of paying plan expenses.

Nothing in the complaint has been tested yet; these are allegations only. But the way this complaint is built is a useful guide to how plaintiffs’ firms now read Form 5500 data, and to what plan sponsors and their advisors should do about it.

The Plan at a Glance

The complaint describes a large defined contribution plan with significant bargaining power:

• About 15,021 participants and $3.08 billion in assets in 2024, and about 13,509 participants and $3.34 billion in net assets in 2025.
• An average of 15,427 participants and over $2.9 billion in assets from 2020 to 2025.
• Northwest Plan Services as recordkeeper until July 1, 2021, and Empower after that.
• A non-discretionary employer match (500% of contributions up to 1% of pay, plus a supplemental match for employees with ten years of service), subject to three-year cliff vesting.

Claim One: Recordkeeping Fees Were More Than Double Those of Peer Plans

The plaintiff alleges that, based on Form 5500 data, the Plan paid an average of about $71 per participant per year for RKA services from 2020 through 2025, peaking at $95 in 2021. Six comparator plans with similar participant counts allegedly paid an average of $27. The complaint says this gap is about 163% and estimates losses of about $4.5 million including compounding (its own table shows about $4.1 million in cumulative losses before compounding).

Several features of the fee theory stand out:

• Schedule C service codes as the comparison. To address the familiar defense that comparator plans received different services, the complaint compares the Schedule C service and compensation codes reported by each plan. It alleges that in 2025 the Plan reported fewer codes than any comparator plan yet paid two to four times as much per participant.
• Same-recordkeeper comparison. The complaint points to Empower’s Bechtel Trust & Thrift Plan client, which allegedly paid $22 to $26 per participant from 2022 through 2025 while the Plan paid $61 to $73 to the same recordkeeper.
• Fees rose after the recordkeeper change. The plaintiff alleges fees went up after the 2021 move to Empower even though participant counts held steady. In other words, the complaint treats a recordkeeper change as no defense by itself if the new pricing was not benchmarked.
• A stated "standard of care." The complaint asserts that prudent fiduciaries of large plans benchmark RKA fees at least every other year and run an RFP about every three to five years. It cites guidance from consultants such as CapTrust and Mercer and a NAPA survey describing recordkeeping as a commodity.
• Third Circuit pleading law. The plaintiff relies on Mator v. Wesco Distribution (3d Cir. 2024), which revived a fee claim where a plan allegedly paid two to four times what comparable plans paid. The Eastern District of Pennsylvania is bound by that decision.

Claim Two: Prohibited Transactions After Cunningham v. Cornell

Count II alleges that each payment of RKA fees to Northwest and Empower, and each renewal or amendment of their arrangements, was a prohibited furnishing of services by a party in interest under ERISA § 406(a)(1)(C)–(D). Relying on the Supreme Court’s 2025 decision in Cunningham v. Cornell University, the complaint argues that the reasonable-compensation exemption in ERISA § 408(b)(2) is an affirmative defense that defendants must prove.

This is the practical significance of Cunningham for sponsors: a plaintiff can now plead a prohibited transaction claim about an ordinary recordkeeping contract with relatively little detail. The real fight moves to whether the fiduciaries can show the compensation was reasonable. That puts the focus on the paper trail: committee minutes, benchmarking reports, RFP results, and fee negotiations.

Claim Three: Forfeitures Used to Reduce the Match Instead of Paying Plan Expenses

The forfeiture claims (Counts III through V) allege breaches of the duties of loyalty and prudence and a violation of ERISA’s anti-inurement rule. According to the complaint:

• The Plan document allowed forfeitures to be used either to reduce employer contributions or to pay reasonable plan administrative expenses, with no priority between the two.
• From 2020 through 2025, the Plan generated $12,656,989 in forfeitures. Of that amount, $11,036,003 went to reduce TE Connectivity’s matching contributions and only $1,620,986 (about 13%) went to plan expenses.
• In 2020, 2022, and 2023, no forfeitures were used for plan expenses.
• Participants paid $9,670,104 in plan expenses over the period. Forfeitures exceeded total plan expenses in four of the six years.
• The plaintiff claims losses of more than $7.47 million before lost earnings.

The core theory is that the employer acts as a settlor when it designs the match and vesting schedule, but acts as a fiduciary each year when it decides how to spend forfeitures already held in the trust. The complaint emphasizes that the match was a fixed, non-discretionary formula that TE Connectivity would have paid anyway, and that the company could easily afford it. It also alleges that the committees, made up of company employees, never consulted an independent fiduciary or documented any analysis of the conflict.

The plaintiff is careful to say it is not arguing that ERISA always bars using forfeitures to reduce employer contributions, or that the discretionary plan language is itself unlawful. The claim rests on the specific facts: discretion in the document, a fixed match, large forfeiture balances, and participants paying fees that the complaint calls excessive. The complaint also notes that the Summary Plan Description does not tell participants how forfeitures are used.

Courts have not been uniform on forfeiture claims, and many defendants have won dismissal of similar complaints. This complaint looks designed to answer the arguments that have worked for defendants: it ties the forfeiture claim to the fee claim, focuses on the plan’s discretionary language, and stresses the lack of any documented process.

Claim Four: Failure to Monitor

Count VI alleges that TE Connectivity, which appoints and removes committee members, failed to monitor the committees’ handling of both fees and forfeitures. The complaint argues that persistently high fees and the consistent use of forfeitures to benefit the company should have been red flags. Monitoring claims like this are typical, and they mean the board or officer who appoints committee members has exposure too.

What Plan Sponsors Should Do Now

1. Benchmark your recordkeeping fees on a per-participant basis. Compare total direct and indirect RKA compensation against similarly sized plans, and check what your Form 5500 shows publicly, because that is what plaintiffs’ firms review. If your fees are well above peers, document why, with specific services that justify the difference.
2. Set and follow a regular RFP schedule. The complaint’s proposed standard (benchmarking at least every other year and an RFP every three to five years) is a plaintiff’s position, not a legal rule. But a documented, regular process is your best defense, especially now that Cunningham puts the burden on fiduciaries to show reasonable compensation.
3. Review your Schedule C reporting. Make sure the service codes on Schedule C reflect all of the services you actually receive. Incomplete reporting can make your plan look like it pays more for less.
4. Look again at your forfeiture provision. If the plan document gives fiduciaries discretion over forfeitures, every annual use of forfeitures is a fiduciary decision. Consider, with counsel, whether a plan amendment that sets a fixed order of use is appropriate. Any amendment is a settlor decision, should be made carefully, and generally works only going forward.
5. Document an annual forfeiture decision. Until any amendment takes effect, have the responsible committee consider each year how forfeitures will be used, weigh participant interests, address the conflict of interest, and record its reasoning in the minutes. A pattern of identical outcomes with no record of deliberation is exactly what this complaint targets.
6. Use forfeitures promptly. Track forfeiture balances and use them within the time required by the plan and applicable tax rules so they do not build up.
7. Check your participant disclosures. Review whether your SPD and fee disclosures accurately describe how forfeitures are used.
8. Strengthen committee governance and monitoring. Keep committee charters current, train members, keep good minutes, and have the appointing body periodically review committee performance. Consider whether to involve an independent fiduciary or advisor on decisions that involve a company conflict.
9. Review fiduciary liability insurance and indemnification. Confirm coverage and retention levels for fee and forfeiture claims, which some carriers have begun to treat differently.

What Plan Advisors and Consultants Should Take Away

Advisors appear throughout this complaint. It quotes consultant guidance and an advisor trade association survey to define the "prevailing standard of care." Advisors should expect their own materials to be used the same way and should take several steps:

• Deliver benchmarking that holds up. Fee reports should use per-participant pricing, compare plans of similar size with similar services, and spell out the services behind any premium. A report that simply says fees are "within range" will not help a client much in litigation.
• Re-benchmark after a recordkeeper change. This complaint alleges fees went up after the switch to a new recordkeeper. Pricing from a new contract should be checked against the market, not assumed to be competitive.
• Raise forfeitures as a standing agenda item. Advisors are well positioned to remind committees to make and document an annual forfeiture decision and to show the participant impact of each option.
• Help clients prepare their file. After Cunningham, the record of how fees were negotiated and approved matters more than ever. Advisors should help committees keep RFP materials, benchmarking reports, and negotiation history organized.
• Be clear about your role. Advisors should be clear in their contracts and in practice about whether they are acting as fiduciaries and what decisions they are responsible for.

The Bottom Line

Silva v. TE Connectivity is an early-stage complaint, and the defendants have not yet responded. But it shows how plaintiffs now build these cases entirely from public Form 5500 data, and how Cunningham and the Third Circuit’s Mator decision make fee claims easier to plead in this region. For sponsors and advisors alike, the most effective response is a documented, repeatable process for both recordkeeping fees and forfeitures.

Falcon Rappaport & Berkman’s Employee Benefits and Executive Compensation team can help you review your recordkeeping arrangements, benchmarking process, forfeiture provisions, and committee governance. Please contact us with any questions.

DISCLAIMER: This summary is not legal advice and does not create any attorney-client relationship. This summary does not provide a definitive legal opinion for any factual situation. Before the firm can provide legal advice or opinion to any person or entity, the specific facts at issue must be reviewed by the firm. Before an attorney-client relationship is formed, the firm must have a signed engagement letter with a client setting forth the Firm’s scope and terms of representation. The information contained herein is based upon the law at the time of publication.