Court Narrows Earlier Ruling on Brokerage Window Fee Disclosure in Alas v. AT&T

On August 3, 2026, Judge Sherilyn Peace Garnett of the U.S. District Court for the Central District of California granted AT&T’s motion for reconsideration in the long-running Alas v. AT&T case. The order revised portions of her March 2026 ruling concerning the disclosure of indirect compensation tied to the plan’s brokerage window arrangements.

The court found that a June 2012 disclosure from AT&T’s recordkeeper, Fidelity Workplace Services, was timely and that the use of fee ranges to disclose brokerage-window compensation can satisfy Department of Labor regulations under appropriate circumstances.

The March ruling had raised concerns among employers and recordkeepers because it suggested that commonly used brokerage-window disclosures may not comply with ERISA. Trade groups argued that if the decision stood, it could call into question the compliance of virtually every defined contribution plan that offers brokerage-window investments.

Background

The case involves the brokerage window offered through AT&T’s Retirement Savings Plan, which allows employees to choose investments beyond the plan’s standard investment menu. ERISA regulations impose specific disclosure requirements for compensation received by plan service providers.

As the plan’s recordkeeper, Fidelity receives indirect compensation in connection with funds purchased through the brokerage window. ERISA section 408(b)(2) requires that such arrangements be “reasonable,” which includes providing disclosures sufficient for plan fiduciaries to evaluate that compensation. The plaintiffs argued that Fidelity’s disclosure of a range of rates, rather than fund-by-fund figures, was too vague to satisfy that standard, and the court initially agreed in its March ruling.

Reconsideration and Industry Concerns

AT&T sought reconsideration of the March ruling. In a June 2026 amicus filing, the ERISA Industry Committee, the American Benefits Council, and the SPARK Institute argued that brokerage windows routinely offer thousands of investment options, making investment-by-investment disclosure of indirect compensation impractical. They also warned that the earlier decision could have “seismic adverse implications” for retirement plans, service providers, and participants.

Under the August order, issues remaining for trial include the adequacy of Fidelity’s BrokerageLink disclosures, the reasonableness of compensation associated with BrokerageLink, and related fiduciary-prudence questions.

For plan sponsors, the ruling provides greater clarity on the use of fee ranges in brokerage-window disclosures, while also underscoring the importance of reviewing service-provider compensation and related disclosures as part of ongoing fiduciary oversight.

Sources:

https://www.eric.org/press_release/eric-applauds-court-ruling-in-att-retirement-plan-case/

https://www.americanbenefitscouncil.org/pub/?id=c2ca1dec-b220-8543-09e6-bae2b62f3c2e

https://www.eric.org/wp-content/uploads/2026/08/ATT_Motion-for-Reconsideration.pdf