After the Supreme Court’s decision in Cunningham, the answer is: yes, hiring a third-party 401(k) service provider—if not documented and benchmarked appropriately—can expose a company to litigation.

Let’s be clear: the lawsuit itself may not be about whether the provider performed poorly or charged too much. It may simply focus on the fact that the retirement plan paid that provider—a “party in interest”—without a clear showing of why it was reasonable to do so.

This puts plan fiduciaries in a tough position. Even if they believed they acted in the plan’s best interest, they can still face costly litigation if they cannot prove they followed prudent processes. Courts may demand evidence that the fiduciaries: (1) compared costs to alternatives, (2) documented their decision-making, and (3) reviewed ongoing performance.

In short, employers are not being sued for paying vendors—they’re being sued for failing to document why the payments were appropriate under ERISA standards. If you sponsor a retirement plan, treat every vendor decision like a potential legal exhibit. Because one day, it could be.