A Florida district court recently gave TECO Energy, Inc. another victory in an ERISA case when it dismissed Plaintiff’s proposed class action with prejudice.  Roche v. Teco Energy, Inc., No. 8:23-cv-01571, 2025 U.S. Dist. LEXIS 95462 (M.D. Fla. May 20, 2025).  The court found that Plaintiff’s amended complaint did not state a claim because it failed to allege either (1) misrepresentative or misleading communications to the Plaintiff; or (2) that TECO was timely on notice that Plaintiff had a need for disclosure.

In 2022, Plaintiff Alejandro Roche attempted to request a December retirement date, which would have corresponded to a higher payout for an optional lump sum benefit due to required changes in interest rates used to calculate that lump sum.  However, Roche submitted his application too late to select such a date and instead received his lump sum payment in January of 2023.  Roche alleged that he would have submitted his application earlier if he had been properly notified of TECO’s method of calculating lump sum benefits and the fact that rising interest rates could reduce his lump sum payout.    

Discussion

Roche offered two theories to support his allegations: (1) TECO was on notice of Roche’s “confusion;” and (2) ERISA fiduciaries have a proactive duty to warn beneficiaries of any circumstance that might reduce their benefits.  The court rejected both theories, dismissing Roche’s suit.

Roche’s first theory was that Defendants should have known that their “silence” with respect to disclosing how rising interest rates could lower 2023 lump sum benefits caused him harm because TECO learned of his confusion during conversations about his retirement benefits.  However, ERISA fiduciaries typically have an affirmative duty to inform only if they are on notice that their failure to convey the information would be harmful.  The court concluded that Roche failed to state a claim under this theory because by the time he alerted TECO of his confusion (to which TECO had appropriately responded), it was already too late for him to choose a 2022 retirement date.  

Next, Roche argued that ERISA fiduciaries have an affirmative duty to warn beneficiaries of circumstances that might reduce their benefits.  Here, the court noted that Roche’s supporting caselaw did not stand for a blanket rule that ERISA fiduciaries have a duty to communicate material facts to participants, absent some communication or other event that puts the fiduciary on notice about the need for the disclosure.  The court noted that “absent any communication or notice from participants” it was unconvinced that TECO had a duty (1) to anticipate the possibility that participants were considering a 2022 retirement and would be taking the lump sum; and (2) to notify them that since interest rates were rising, their lump sum payment would be less if they did not retire until 2023.

Roche’s theory that ERISA fiduciaries must proactively provide participants with information that would maximize benefit outcomes would have amounted to ERISA fiduciaries being required to offer unsolicited advice.  The court held that this theory, if accepted, would be a vast expansion of ERISA’s fiduciary duties far beyond its current state and declined to do so.

Takeaways

This case reinforces the idea that ERISA fiduciaries are not required to anticipate or predict how participants will behave or offer participants unsolicited advice. 

However, this case does underscore established caselaw that can require a fiduciary to provide information when a participant has demonstrated confusion over benefit terms, or has otherwise put the ERISA fiduciary on notice that the participant needs material information to protect his benefits.  Fiduciaries should always pay close attention to communications with participants.