Reevaluating ERISA Fiduciary Relationships as Relational Contracts

Excessive fiduciary fees exacted from retirement savings exacerbate an overlooked crisis in which Americans descend into poverty after decades of work. Though ERISA fiduciary relationships and their associated fees are memorialized through contracts, most analysis by courts and scholars centers on ERISA's foundation in trust law. Examining ERISA fiduciary arrangements as relational contracts exposes structural misalignments in fee compositions, incentive mechanisms, and core fiduciary duties. It also supplies tools for redesigning these relationships to better protect American workers-without the need for congressional or regulatory intervention.&nbsp; <br><br>Drawing from the robust cross-disciplinary literature on relational contracts, this Article explores how relational contract principles should inform analyses-and restructuring-of the contracts underpinning the ERISA fiduciary arrangement. It contributes by proposing practicable revisions to fiduciary arrangements that rectify suboptimal fiduciary compensation structures and lopsided risk allocation. With the aim of preserving the $13 trillion in assets defined contribution retirement plans hold, this Article proposes incentivization and bonding mechanisms previously unapplied in the ERISA fiduciary context.