On May 31, 2014, the Court of Appeals for the Second Circuit ruled that an employer's decision to make employer contributions to both an ESOP and a 401(k) in the form of employer stock, rather than cash, was not a fiduciary decision because plan funding decisions are settlor decisions.  See Coulter v. Morgan Stanley & Co. Inc.  Thus, the court held, ERISA's fiduciary standards could not apply.

It should be noted that the Coulter decision preceded the Supreme Court's Dudenhoeffer decision, discussed above.  It is unclear how this decision should be interpreted in light of the Supreme Court's apparently contrary decision.  These two decisions, Coulter and Dudenhoeffer, illustrate the ongoing issues surrounding stock investments in defined contribution plans.  Fiduciaries of plans that hold stock investments may want to consult with their benefits counsel to determine what impact, if any, these cases may have on their obligations.