Raytheon’s 401(k) Fiduciary Fiasco: Modest Gains Amid 179th-Ranked Volume and ERISA Lawsuit

On August 27, 2025, Raytheon Technologies (RTX) closed with a 0.17% gain, despite a 40.94% decline in trading volume to $0.48 billion, ranking 179th in market activity. A new class-action lawsuit has emerged as a potential headwind, alleging fiduciary breaches in the management of RTX’s 401(k) savings plans. Plaintiffs claim the company systematically used forfeited plan assets to offset employer contributions since 2019, violating ERISA guidelines by prioritizing corporate interests over participant benefits. The suit highlights that forfeitures were allocated to reduce employer contributions—despite the company’s financial capacity to cover obligations—leaving participants to bear administrative costs. This practice, if proven, could trigger legal liabilities and reputational damage, though the case is in its early stages.

The lawsuit underscores a recurring pattern in similar ERISA-related disputes, where fiduciaries are accused of neglecting their duty to act prudently. RTX’s alleged failure to establish an impartial process for allocating forfeitures is a key point of contention. The plaintiffs argue that using forfeited funds to cover administrative expenses—rather than reducing employer contributions—would better align with participant interests. The case cites unallocated forfeitures growing from $1.5 million in 2019 to $6.6 million in 2023, while administrative expenses reached $25.1 million during the same period. Legal outcomes remain uncertain, but such litigation often results in settlements or structural reforms, potentially impacting corporate governance perceptions.

The lawsuit adds to a broader narrative of scrutiny over corporate retirement plan management. While RTX’s stock performance remains modestly positive, the legal exposure could weigh on investor sentiment if the case escalates. The plaintiffs’ allegations focus on a specific operational policy rather than core business operations, but prolonged litigation may divert management attention and incur legal costs. As of now, the market appears to price in limited immediate risk, but developments in fiduciary litigation often unfold over months, with outcomes influenced by regulatory and judicial interpretations of ERISA compliance.