COLLECTED WISDOM™ on Court and Legal Actions Related to Retirement Plans

A directory and index of articles that review what is happening in the courts and legal system.

Schlichter Says Empower Improperly Used Data in 401k Managed Account Push

A new lawsuit filed by Schlichter Bogard LLC alleges that Empower Retirement and its affiliates misled retirement plan participants to boost corporate profits. The suit claims Empower exploited its role as a recordkeeper to identify rollover candidates, promoting their managed account product with hidden fees and limited customization options. It also criticizes plan sponsors for failing to supervise Empower's actions, despite them not being named as parties in the suit.

Source: Napa-net.org, August 2025

Court Rejects Testimony of Plaintiffs' Prudence Experts in 401k Litigation Bench Trial

The court ruled in favor of LabCorp, concluding that the plaintiffs did not demonstrate that LabCorp breached its fiduciary duty of prudence in managing recordkeeping fees and monitoring investment shares of the Plan. The decision was significantly influenced by the court's Daubert analysis of the parties' expert testimonies, which were deemed to have limited probative value. The court criticized the plaintiffs' experts for basing their conclusions on personal experiences rather than industry standards and for lacking familiarity with key documents related to their claims.

Source: Millerchevalier.com, August 2025

Scottsdale CEO Indicted for Embezzling From Retirement and Health Plans

James Vincent Campbell, CEO and founder of a company that manages employee benefits for federal contractors, was indicted for allegedly embezzling over $2.4 million from an ERISA benefit plan to finance exotic hunting trips in Africa and Alaska. He faces one charge of theft from an ERISA plan and 11 counts of money laundering. Campbell pleaded "not guilty" to the charges.

Source: 401kspecialistmag.com, August 2025

Federal Judge Rejects Motion to Dismiss Stable Value Investment Case

A federal judge in Virginia has denied Sentara Healthcare Inc. and its fiduciary committee's motion to dismiss a lawsuit alleging breach of fiduciary duty regarding its 403b plan. The plaintiffs claim that the plan sponsor and committee failed to adequately monitor an underperforming stable value investment option. While one plaintiff, Bonny Davis, was initially found to lack standing because she was not a participant in the investment, the court permitted the plaintiffs to amend the complaint to demonstrate that she had, in fact, enrolled in the investment option, thus allowing her to establish standing in the case.

Source: Planadviser.com, August 2025

District Court Denies Bank of America's Motion to Dismiss 401k Forfeitures Case

A federal judge in North Carolina has allowed a lawsuit against Bank of America to proceed, denying the bank's motion to dismiss the case. The lawsuit, filed by plaintiffs in August 2024 and amended in March, claims that Bank of America improperly utilized forfeited retirement plan assets to offset its contributions instead of paying plan expenses, which the plaintiffs argue violates fiduciary duties under ERISA. U.S. District Judge Max Cogburn Jr. stated that there have been varying judicial interpretations of what constitutes a fiduciary breach under ERISA and rejected the bank's claim that its actions fell outside ERISA's fiduciary standards.

Source: Planadviser.com, August 2025

Supreme Court Shows Interest in ERISA Pleading Standard Circuit Split

Earlier this year, Parker-Hannifin, a defendant in an ERISA fiduciary breach case, filed a petition for a writ of certiorari to the U.S. Supreme Court. This petition could resolve a circuit split regarding the pleading standard for ERISA class actions that challenge the investment performance of defined contribution plans, highlighted by the Sixth Circuit's decision in Johnson v. Parker-Hannifin. The Seventh, Eighth, and Tenth Circuits require plaintiffs to allege that alternative, similarly positioned investment options outperformed those offered in the plan, a standard referred to as "meaningful benchmarks." The Sixth Circuit's ruling in Johnson deviates from this established consensus. If the Supreme Court agrees to hear the case, it could provide clarity on this important legal issue.

Source: Erisalitigationadvisor.com, August 2025

The Forfeiture Fiasco: Why the DOL and Common Sense are on the Right Side of the HP Case

It's rare to witness the DOL stepping into legal battles to support plan sponsors, but when it does, it usually signifies a more significant issue than just the complaint of an individual plan participant. This was the case in Hutchins v. HP, Inc., a lawsuit that has highlighted one of the longstanding and often misinterpreted practices in defined contribution plans: forfeitures.

Source: Jdsupra.com, August 2025

Judge Approves Historic $69M Settlement in UnitedHealth 401k Suit

A federal judge has approved a $69 million settlement in a class action lawsuit against UnitedHealth Group regarding its 401k plan. Plaintiffs alleged that the company violated fiduciary duties under ERISA by keeping poorly performing Wells Fargo target date funds in the plan. Judge R. Tunheim of the U.S. District Court of Minnesota confirmed he would sign the proposed orders with no major changes in the case of Snyder v. UnitedHealth Group, et al.

Source: Hallbenefitslaw.com, August 2025

Forfeitures Cases Proceed With Mixed Results and DOL Weighs In

Approximately 65 class action lawsuits have been filed against 401k plan fiduciaries, alleging that they improperly used participant forfeitures to offset employer contributions instead of covering plan expenses, which were ultimately paid by participants. Although the IRS has previously approved such practices for offsetting employer-matching contributions, a compelling argument has emerged: if a plan document allows fiduciaries the discretion to either benefit the employer or the participants through the use of forfeitures, failing to favor participants may constitute a breach of fiduciary duty.

Source: Captrust.com, August 2025

Using Interlocutory Appeals to Reduce the Scope and Cost of ERISA Class Action Litigation

The writer emphasizes the need for an updated approach to excessive fees and class action litigation under ERISA, suggesting that the traditional litigation methods used by plan sponsors are outdated. He highlights the Supreme Court's decision in Cunningham v. Cornell as an opportunity for defendants to adopt a new strategy. This includes using federal practice tools to encourage district courts to take greater control over class action cases early in the process and to address critical issues sooner, rather than waiting for costly and lengthy discovery at the summary judgment stage.

Source: Bostonerisalaw.com, August 2025

Another Forfeiture Case Dismissed

A federal judge has dismissed a lawsuit alleging fiduciary breach related to the use of plan forfeitures to offset employer contributions. The defendants, Siemens Corp., argued in their October 2024 motion that the plaintiff's claims represented a "novel and untenable theory" contrary to established ERISA rules concerning defined contribution plans. The plaintiff claimed that the defendants had discretionary control over the distribution of plan forfeitures, mirroring issues raised in numerous similar cases.

Source: Psca.org, August 2025

Another 401k Suit Asserts Breach With Managed Account, Forfeitures

The Siemens Energy, Inc. Savings Plan, valued at $3.5 billion, has been hit with a class action lawsuit for multiple fiduciary breaches, including excessive recordkeeping fees, high managed account charges, a poorly performing stable value option, and the practice of offsetting employer contributions with forfeitures. The defendants in the suit include Siemens Energy, Inc., its Board of Directors, the Administrative Committee, and the Investment Committee, with participant-plaintiff Brian Babinski leading the case.

Source: Napa-net.org, July 2025

MEP Embezzler Nailed With Big Tax Bill

Matt Hutcheson, who was convicted in 2013 on 17 counts of wire fraud involving over $5 million in retirement plan assets, had his 17-year prison sentence commuted. However, he subsequently faced tax liabilities and penalties related to his embezzlement. A Tax Court ruling determined that the $5,307,688 he siphoned from the retirement plans was considered taxable income from unreported embezzlement, as Hutcheson had abandoned his fiduciary responsibilities and treated the funds as his own.

Source: Napa-net.org, July 2025

Plan Forfeiture Complaint Filed Against Aldi Tries New Allegation

In the recent case Castillon v. Aldi Inc., the plaintiffs accuse the grocery chain of breaching its fiduciary duties under ERISA by utilizing participant-forfeited funds to lower company contributions, rather than to cover administrative fees as has been argued in previous complaints. This case, filed in the U.S. District Court for the Northern District of Illinois, introduces the new aspect of timeliness in the forfeiture complaint, following the Department of Labor's supportive amicus brief for plan sponsors.

Source: Planadviser.com, July 2025

DOL Supports Employers in Forfeiture Allocation Litigation

In a notable turn of events regarding ERISA forfeiture allocation cases, the DOL has submitted an amicus brief supporting the employer in Hutchins v. Hewlett Packard, a Ninth Circuit case, the first forfeiture case to reach an appellate court. This marks the DOL's first formal stance on the issue, which is usually disfavored by courts, as they prefer legal positions to be established through regulations rather than litigation.

Source: Wagnerlawgroup.com, July 2025

DOL's Plan Forfeiture Amicus Brief "Significant," Legal Experts Say

Legal experts view the DOL's recent amicus brief supporting HP Inc. in a 401k-forfeiture complaint as a significant development that could lead to more favorable court rulings for plan sponsors. The DOL stated that the alleged use of forfeited employer contributions in this case would not violate ERISA. Experts note that this marks a shift in the DOL's historical stance towards a more employer-friendly approach, which could influence future legal outcomes.

Source: Plansponsor.com, July 2025

Has the Forfeiture Tide Turned? Podcast

Recent federal court dismissals of two significant lawsuits concerning forfeiture reallocation could indicate a shift in judicial perspective. The DOL has also expressed support for plan fiduciaries in a related case, raising the question of whether this might signal a turning point. The lawsuits against JP Morgan and Wells Fargo were dismissed in separate courts for different reasons, but the timing and manner of these dismissals suggest that some federal courts may now view established practices, previously accepted by the IRS, as lacking merit. Nevin Adams and Fred Reish weigh in.

Source: Napa-net.org, July 2025

The Current State of the Law in ERISA Forfeitures Cases

As the second anniversary of the initial forfeiture lawsuits approaches, there are encouraging developments in district courts handling these cases. However, with numerous motions to dismiss still unresolved nationwide and two pending appeals in the Ninth Circuit, the legal situation is still uncertain. A chronological list of the rulings on these motions to dismiss is provided in the table here.

Source: Mayerbrown.com, July 2025

Fiduciary Breach Suit Results From Beneficiary Disclosures

A lawsuit questioning whether providing information about designated beneficiaries on a participant statement could result in a fiduciary breach has been dismissed by the U.S. Court of Appeals for the Fifth Circuit. The case, LeBoeuf v. Entergy Corp., involved claims that the quarterly plan statements sent to participant Alvin Martinez contained "materially misleading information" about his beneficiary designations following his remarriage. Ultimately, the court ruled in favor of the defendants, dismissing the allegations.

Source: Asppa-net.org, July 2025

Ninth Circuit Dismisses Intel's 401k Lawsuit Concerning Inclusion of Private Equity Investments

The Ninth Circuit has dismissed a 401k lawsuit filed by Intel employees, who claimed that the inclusion of private equity and hedge funds in the company's defined contribution plans breached fiduciary duties under ERISA. The court ruled that ERISA does not prohibit certain investment types in participant-directed plans. It indicated that, despite their higher fees and complexity, private fund investments can be considered prudent options based on the circumstances.

Source: Hallbenefitslaw.com, July 2025

UnitedHealth Faces Another Lawsuit Concerning Misused Forfeited 401k Funds

Employees have filed two lawsuits against UnitedHealth Group, alleging the company misused forfeited 401k funds to reduce its employer contributions, violating ERISA. The first lawsuit, Kotalik et al. v. UnitedHealth Group Inc. et al., claims UHG used these funds for employer contributions instead of administrative expenses. The second lawsuit, Holly Hendrickson v. UnitedHealth Group, alleges similar improper retention of forfeited funds. This follows a previous class action lawsuit, Snyder v. UnitedHealth Group, which UHG settled for $69 million after litigation revealed the company prioritized low-performing target-date funds to maintain relationships with Wells Fargo.

Source: Hallbenefitslaw.com, July 2025

401k Forfeiture Litigation: Implications for Plan Sponsors

Since 2023, there has been a surge of class-action lawsuits alleging violations of fiduciary duties under ERISA concerning the management of 401k forfeitures. Plaintiffs claim that those responsible for deciding the use of forfeited funds have a fiduciary duty to the plan participants who remain in the plan. They argue that ERISA mandates these decisions prioritize the interests of participants, particularly in reducing administrative costs. Some plaintiffs have had limited success in overcoming motions to dismiss their cases, highlighting the legal vulnerabilities in the handling of 401k forfeitures. Fortunately, if you sponsor a plan that allows discretion in how to use forfeitures, there are several options to reduce litigation risk concerning their use.

Source: Bsk.com, July 2025

Forfeiture Case Brought Against WakeMed Hospital System

A new lawsuit has been filed by participant-plaintiff Jeanette Tillery on behalf of the 12,000 members of the WakeMed Retirement Savings Plan. The suit challenges how the plan handles forfeitures. Participant argues that the defendants have only used forfeitures to offset the employer's future matching and nonelective contributions throughout the relevant period, rather than following the plan's specified provisions.

Source: Psca.org, July 2025

Court in Natixis Litigation Provides a Practical Discussion of What Constitutes a Prudent Fiduciary Committee Process

On June 26, 2025, the U.S. District Court for the District of Massachusetts ruled in favor of Natixis Investment Managers and its fiduciary committee in the case Waldner v. Natixis Investment Managers, L.P., et al. The plaintiffs claimed that the defendants violated their ERISA duties by including underperforming proprietary funds in the 401k plan. However, after a full trial, the court sided with the defendants on all counts, emphasizing the importance of a "prudent process" in managing the fund menu. The ruling focused on the prudence issues raised by the plaintiffs' allegations.

Source: Octoberthree.com, July 2025

Part of Rollover Rule Vacated by Federal Court

A federal judge has formally set aside part of the Department of Labor's investment advice regulation, specifically regarding the interpretation of a rollover recommendation as the beginning of a series of transactions that could be deemed a "regular basis." This ruling marks the second time a federal court has reinstated the traditional understanding of what constitutes "regular basis." While fiduciary responsibilities still apply to advice given to plan participants regarding rollovers, a rollover recommendation made by an advisor without an existing relationship will remain a distinct issue.

Source: Asppa-net.org, July 2025

Implications and Action Items for ERISA Attorneys Following Cunningham v. Cornell University

The U.S. Supreme Court's decision in Cunningham v. Cornell University significantly lowers the pleading standard for prohibited transaction claims under ERISA. This ruling allows plaintiffs to advance their claims by merely alleging common practices among employee pension plan sponsors, such as using plan assets to pay recordkeepers. The Court identified tools to help combat meritless litigation, but these tools will need further refinement by district courts. As a result, ERISA plan fiduciary counsel should familiarize themselves with these tools, especially in relation to the Federal Rules of Civil Procedure.

Source: Verrill-law.com, July 2025

Stifel Slapped With 401k Fiduciary Breach Suit

A new lawsuit claims that plan fiduciaries acted unreasonably, resulting in significant financial losses for the Plan and its participants. The lawsuit indicates that as a "jumbo" plan, with over $1.3 billion in assets, the fiduciaries had the ability to negotiate for quality, low-cost services but failed to do so. Additionally, it accuses them of not taking timely action to reduce Plan expenses and allowing excessive charges for services from 2019 to 2023.

Source: Napa-net.org, July 2025

Supreme Court Seeks Input From Solicitor General in 401k Fees Case

The U.S. Supreme Court is soliciting the U.S. Solicitor General's opinion on a case involving Parker-Hannifin Corp.'s 401k plan, which has been accused of retaining underperforming target-date funds that charged high fees. The lawsuit, filed in 2021 by five current and former participants on behalf of approximately 32,000 members, claims that Parker-Hannifin violated its fiduciary duties under ERISA by mismanaging the retirement plan. A federal judge initially dismissed the case in December 2023, but the 6th U.S. Circuit Court of Appeals later reversed this decision.

Source: Planadviser.com, July 2025

Proprietary Fund Case Against Natixis Dismissed

A federal judge has dismissed a lawsuit that claimed the Natixis defendants allowed underperforming funds to remain in a retirement plan out of self-interest and failed to prudently monitor or remove them. The suit argued that the defendants used an imprudent fund selection process by only adding proprietary funds since 2014. While the judge acknowledged the complexity of the case, they ultimately ruled against the arguments regarding imprudence in fund selection and monitoring.

Source: Psca.org, July 2025

Arbitration Provision at Issue in Ninth Circuit Appeal of ERISA 401k Suit

The Capital Group Companies Inc. is appealing to the U.S. Ninth Circuit Court to enforce an arbitration provision in its 401k plan, arguing that a lower court was wrong to deny its motion to compel arbitration in a former employee's ERISA lawsuit. The district court rejected the arbitration provision because it allegedly waived statutory rights under ERISA to seek class or collective relief for all plan participants. Capital Group contends that the district court misapplied the effective vindication exemption of the Federal Arbitration Act.

Source: Hallbenefitslaw.com, July 2025

Second Spouse Receives $3 Million in 401k Dispute, Surviving Adult Children Receive $0

On May 1, 2025, the U.S. Court of Appeals for the Fifth Circuit upheld the dismissal of a breach of fiduciary duty claim against Entergy Corporation's Employee Benefits Committee. The court found that the Committee correctly disclosed the policy that marriage voids prior beneficiary designations unless a spousal waiver is provided. Since the plan sponsor did not obtain a spousal waiver from the participant's second spouse before the participant's death, the Committee was justified in disbursing approximately $3 million from the participant's 401k account to the second spouse instead of his adult children, as indicated on the participant's last beneficiary form.

Source: Masudafunai.com, June 2025

Prudential Defends Lower Court Win in 401k Suit on Appeal

Prudential Insurance Co. of America has filed an appellate brief with the U.S. Court of Appeals for the Third Circuit, supporting a lower court's summary judgment in a class action lawsuit. The lawsuit, Young Cho v. Prudential Insurance Co. of America, involves allegations from plaintiff workers that Prudential violated its fiduciary duties under ERISA by making imprudent investment decisions, leading to significant losses in retirement plan investments. Prudential argues that the workers' claims are speculative and commended the lower court for its thorough application of the summary judgment standard based on the evidence of Prudential's prudent fiduciary practices.

Source: Hallbenefitslaw.com, June 2025

Plan Forfeitures: Recent Lawsuits Create Uncertainty

In recent years, there has been a rise in class-action lawsuits questioning the appropriate use of plan forfeitures in 401k and similar defined-contribution plans. Forfeitures occur when employees leave before fully vesting in employer contributions, and many plans use these funds to offset future employer contributions. However, the lawsuits argue that this practice may violate ERISA. While the outcomes of these cases remain uncertain, plan sponsors and fiduciaries are advised to monitor the situation, review their plan documents, and consider amendments to mitigate potential risks.

Source: Orba.com, June 2025

What the Supreme Court's ERISA Decision Means for Retirement Plans: Podcast

In this episode of the Revamping Retirement podcast, hosts Jennifer Doss and Peter Ruffel welcome Stephanie Gutwein, a partner at Faegre Drinker, to explore the ramifications of the Cunningham v. Cornell Supreme Court decision on ERISA's prohibited transaction regulations. The discussion covers the intricacies of ERISA's prohibited transaction rules and exemptions, along with the recent Supreme Court ruling that impacts litigation involving plan sponsors. Stephanie offers valuable advice for plan fiduciaries, highlighting the importance of establishing strong processes and thorough documentation to effectively manage this changing environment.

Source: Captrust.com, June 2025

Federal Court Denies Monster Beverage's Motion to Dismiss 401k Fee Suit

A federal district court judge in California has denied Monster Beverage Corp.'s motion to dismiss a class action lawsuit filed by employees. The employees allege that Monster failed to fulfill its fiduciary duties by not adequately monitoring Transamerica Retirement Solutions, the third-party administrator of its 401k plan. They claim Transamerica charged excessive recordkeeping fees based on plan revenue rather than actual services. Additionally, the employees argue that Monster unnecessarily maintained a large balance in its ERISA benefit account, resulting in wasted funds from the plan.

Source: Hallbenefitslaw.com, June 2025

Workers File Excessive Fee ERISA Class Action Suit Against TIAA

Brian Byrne, a former employee, has filed a class action lawsuit against Teachers Insurance and Annuity Association and its fiduciaries. The lawsuit claims that TIAA violated its fiduciary duties and engaged in prohibited transactions under ERISA by charging retirement plan participants higher fees for the same investments compared to other investors. Additionally, it alleges that TIAA improperly retained the CREF Growth Fund in its offerings for 16 years despite its poor performance.

Source: Hallbenefitslaw.com, June 2025

Forfeiture Case Against Wells Fargo Dismissed

Wells Fargo has successfully defended itself against a fiduciary breach lawsuit concerning the use of forfeitures in retirement plans for the second time within a week. The plaintiff's argument, which has appeared in over 50 similar lawsuits, claims that using plan forfeitures to lower employer contributions -- though legally permitted -- resulted in diminished future contributions and depleted plan assets. The lawsuit contends that this decision shows fiduciaries prioritizing their interests over those of plan participants and beneficiaries.

Source: Psca.org, June 2025

Pacific Office Automation Underperformance Suit Dismissed

Plan fiduciaries facing a lawsuit for alleged breach of duty related to underperforming funds have successfully won a motion to dismiss the case. The plaintiffs claimed that the defendants violated their fiduciary responsibilities under ERISA by mismanaging the SDH Funds, which purportedly led to the funds' poor performance and resulted in significant financial losses for the plaintiffs in terms of investment earnings.

Source: Psca.org, June 2025

Participants Allege Fiduciary Breach at National Rural Electric Cooperative

Participants of the National Rural Electric Cooperative Association's retirement plan have filed a complaint in the U.S. District Court for the Eastern District of Virginia, alleging financial mismanagement and self-dealing in the administration of NRECA's 401k Pension Plan. The complaint highlights NRECA's failure to heed fiduciary warnings, including a 2012 DOL settlement that mandated restoring $27.3 million to employee benefit plans for similar violations. Instead of implementing necessary changes, NRECA allegedly continued to overcharge participants and used plan assets to subsidize its operations.

Source: Planadviser.com, June 2025

UnitedHealth $69M Settlement Finalized

UnitedHealth Group agreed to a $69 million settlement regarding allegations of breaching its duties and mismanaging participants' retirement funds in its 401k plan. A Minnesota judge finalized the settlement last week, following a lawsuit filed in 2021 that involved three years of litigation. The claims centered on UnitedHealth's handling of investments in the Wells Fargo Target Fund Suite, which reportedly harmed over 350,000 current and former plan participants. The settlement aims to resolve these claims.

Source: Planadviser.com, June 2025

JP Morgan Gets Clear Win in 401k Forfeiture Reallocation Suit

A federal judge has dismissed a lawsuit alleging that JPMorgan Chase & Co. and JPMorgan Chase Bank, N.A. misused forfeited plan assets to lower their employer contribution obligations instead of benefitting plan participants. The suit claimed violations of ERISA and the defendants' fiduciary duties, but the judge rejected this "novel theory" behind the forfeiture reallocation claims.

Source: Napa-net.org, June 2025

Court Affirms Dismissal of Suit Against Intel for Offering Alternatives in DC Plans

The U.S. 9th Circuit Court of Appeals ruled in favor of the fiduciaries of Intel's defined contribution plans in a long-standing legal dispute over the inclusion of alternative investments. The court determined that complaints regarding fiduciary breaches under ERISA must specifically address the prudence of investment selection and monitoring, rather than relying on poor performance alone. This ruling clarifies that incorporating alternative investments within a diversified DC plan is permissible and underscores the need for fiduciaries to maintain a robust framework for investment selection and oversight.

Source: Callan.com, June 2025

Second Lawsuit Filed Against Cigna Over 401k Plan Forfeitures

Three former employees of the Cigna Group have filed a lawsuit against the company, alleging the misuse of over $17 million in forfeited funds from its 401k plan in violation of ERISA. This marks the second legal action against Cigna within two months. The plaintiffs claim that Cigna and its retirement plan committee improperly used these funds to offset company costs. While the IRS has stated that 401k plan forfeitures can be used for certain expenses, many cases disputing the use of such funds have been filed in recent years, leading to several dismissals and ongoing litigation.

Source: Planadviser.com, June 2025

Supreme Court Makes It Easier to Sue for "Excessive Fees"

On April 17, 2025, the U.S. Supreme Court reached a unanimous ruling in the significant case of Cunningham v. Cornell University, resolving a long-debated legal issue. The central question was: Who is responsible for the burden of proof at the outset of an ERISA lawsuit involving "prohibited transactions" or "excessive fees"? The Court's decision has clarified that the burden lies with the defendant.

Source: Francisway.com, June 2025

Sixth Circuit Affirms Dismissal of Excessive Fee Case Against DENSO International

The Sixth Circuit upheld the dismissal of a class action lawsuit against DENSO International America, Inc. regarding alleged excessive fees under ERISA. The plaintiffs, consisting of current and former employees, claimed that DENSO breached its fiduciary duties by failing to adequately monitor the Plan's recordkeeping fees, asserting that these fees were excessive compared to the quality of services provided. However, the court found that the complaint lacked sufficient factual detail to demonstrate that lower-cost, comparable recordkeeping services were available. Consequently, the court affirmed DENSO's motion to dismiss the case, reaffirming the standards for establishing claims of excessive fees under ERISA.

Source: Erisalitigationadvisor.com, June 2025

The Ninth Circuit Rejects Plaintiffs' Challenge to 401k Investments in Private Equity

On May 22, 2025, the Ninth Circuit upheld a district court's decision that dismissed a class action lawsuit against Intel's defined contribution retirement plan fiduciaries regarding their investments in hedge funds and private equity. In the case of Anderson v. Intel Corporation Investment Policy Committee, the court agreed with the DOL that offering PE investments in 401k plans aligns with fiduciary duties under ERISA. This ruling serves as guidance for 401k fiduciaries considering PE options, highlighting the importance of providing thorough disclosures about investments to mitigate fiduciary liability. Additionally, the case emphasizes the necessity of using "meaningful benchmarks" for comparing the performance of investment options against similar funds with comparable risk profiles.

Source: Ktslaw.com, June 2025

Avoiding Litigation in the Aftermath of Cunningham v. Cornell University: Procedural Protections for Plan Sponsors

Following the Supreme Court's ruling related to fiduciary duties in Cunningham v. Cornell University, there's speculation about a surge in litigation, but a significant increase in meritless claims is unlikely. Instead, fiduciary lawsuits are expected to commonly include prohibited transaction claims along with other allegations such as excessive fees or breaches of duty. The lower threshold set by the ruling may enable these prohibited transaction claims to move past the initial pleading stage, extending litigation into discovery and further proceedings. However, plan sponsors can reduce litigation risk and associated costs by consistently following specific procedural practices, regardless of the ruling's overall impact on litigation rates.

Source: Reinhartlaw.com, June 2025

UBS Faces Latest 401k Forfeiture Lawsuit

UBS is facing legal action regarding its handling of forfeited funds in its 401k plans, as detailed in a lawsuit filed in the U.S. District Court for the District of New Jersey. The case, Czakoczi v. UBS AG et al, alleges that the investment bank prioritized its interests by using forfeited funds to lower employer contributions instead of applying them toward plan expenses. This mirrors claims made in other lawsuits under ERISA, including a recent case against Cigna Group and a prior settlement involving Intuit Inc.

Source: Plansponsor.com, May 2025

Another Suit Asserts Fiduciary Forfeiture Breach

A lawsuit has been filed by participant-plaintiff Holly Hendrickson, represented by Lynch Carpenter LLP, against the fiduciaries of the Elevance Health 401k Plan. The suit alleges that the defendants violated ERISA by failing to properly manage the plan's expenses. Specifically, it claims they misused plan forfeitures to offset the company's future contributions instead of using those funds to lower administrative costs for plan participants. The company is accused of benefiting financially from this practice, resulting in millions of dollars in contribution expenses.

Source: Napa-net.org, May 2025

The (Hopefully) Final Chapter in the Intel ERISA Litigation: Implications for Private Market Assets in 401k Plans

On May 22, 2025, the Ninth Circuit Court of Appeals upheld the fiduciaries of Intel Corporation's retirement savings plans regarding the inclusion of private fund investments. The court ruled that ERISA's duty of prudence focuses on a fiduciary's decision-making process rather than evaluating performance in hindsight, emphasizing that comparing returns or fees alone does not prove imprudence. The ruling aligns with the DOL's stance that private funds can be included in a diversified investment portfolio. However, the lengthy litigation and the possibility of differing standards in other circuits may lead fiduciaries to be cautious without clear legal protections for including diversified funds with private market components.

Source: Debevoise.com, May 2025

Intel Wins Appeal of "Speculative" Investment Suit

A federal appellate court has upheld a district court's dismissal of a lawsuit by Winston Anderson, a former Intel employee, which challenged the investment strategies of Intel's retirement plans. Filed in 2019, Anderson's suit claimed that the fiduciaries of the Intel 401k and Retirement Contribution Plans breached their duties by investing in speculative target-date funds that included hedge funds and private equity. He argued that these investments were characterized by high costs and poor performance, and were illiquid and opaque. The court found the claims insufficient to constitute a fiduciary breach.

Source: Napa-net.org, May 2025

Jury Awards Bank Workers $38M in Pentegra 401k Excessive Fee Lawsuit

In a notable case, a New York federal jury awarded over $38 million to more than 26,000 current and former bank employees in a 401k excessive fee lawsuit, Khan et al. v. Board of Directors of Pentegra Defined Contribution Plan. The lawsuit involved the Multiple Employer Defined Contribution Plan for Financial Institutions, administered by Pentegra, which manages over $2 billion in assets covering employees from 250 banks. This jury verdict may represent the highest award in an ERISA excessive fee suit to date. Typically, ERISA cases are resolved through settlements or bench trials, as many courts view them as involving equitable claims appropriate for judges. However, some judges in the Second Circuit have permitted jury trials for these claims.

Source: Hallbenefitslaw.com, May 2025

The ERISA Burden of Causation and Objective Prudence in the Home Depot Case Before the Supreme Court

The Supreme Court has requested guidance from the United States Solicitor General regarding the Home Depot excessive fee case, which involves allegations of fiduciary breaches related to underperforming BlackRock target-date funds and high managed account service fees. The case centers on the need to clarify which party in an ERISA lawsuit is responsible for proving that a fiduciary's breach caused financial losses to a retirement plan. The discussion here includes an examination of why participant-plaintiffs should carry the burden of proof concerning liability, causation, and damages under ERISA, and critiques the historical burden-shifting approach of the Solicitor and the DOL. Additionally, it addresses the often-overlooked issue of objective prudence in ERISA causation analysis.

Source: Encorefiduciary.com, May 2025

Plaintiff Assessed Court Costs in ERISA Case

A federal judge has approved a request from plan fiduciaries for costs in a dismissed excessive fee lawsuit originally filed in 2022 by participant-plaintiff Guillermina Lopex against Embry-Riddle Aeronautical University, Inc. The lawsuit claimed that the fiduciary defendants included more expensive funds in the $500 million retirement plan than necessary, given the availability of cheaper alternatives. Although it's a positive development for fiduciaries to seek cost recovery after litigation, the judge ultimately reduced their request by half, noting that the lawsuit appeared flawed from the beginning and failed to substantiate its claims after multiple attempts.

Source: Psca.org, May 2025

Plan Fiduciaries Faulted for Proprietary Fund Picks

A lawsuit has been filed by a former participant on behalf of the Teachers Insurance and Annuity Association of America 401k Plan and TIAA Retirement Plan, alleging multiple breaches of fiduciary duty under ERISA. The suit targets TIAA, its Board of Trustees, the Plan Investment Review Committee, and unknown defendants (John Does 1–30). The allegations state that TIAA has retained proprietary in-house managed funds with a higher-cost share class in the Plans, despite the availability of a lower-cost share class, leading to higher fees for the Plans.

Source: Napa-net.org, May 2025

Lawsuit Filed Against UnitedHealth Alleging Misuse of Forfeited 401k Plan Assets

UnitedHealth Group Inc. is facing a federal class action lawsuit, Kotalik et al. v. UnitedHealth Group Inc. et al., filed on April 28 in the District of Minnesota. The lawsuit alleges that UnitedHealth and the administrative committee of its 401k Savings Plan misused forfeited employee retirement plan assets, violating fiduciary duties under ERISA. Four current and former employees represent over 250,000 plan participants, claiming that the company improperly utilized 401k forfeitures to offset its contributions instead of covering plan expenses, which the plaintiffs argue is a breach of ERISA regulations.

Source: Planadviser.com, May 2025

Terms of Intuit Forfeiture Suit Settlement Unveiled

A settlement has been reached in a lawsuit involving Intuit, filed in the Northern District of California by plaintiff Deborah Rodriguez in October 2023. This case concerns forfeiture reallocation, and after 18 months, including a failed motion to dismiss, Intuit and Rodriguez have notified the court of their settlement, facilitated by mediator Hon. Morton Denlow (Ret.). Court approval is necessary for the settlement, and the parties will provide details on the process leading to the agreement.

Source: Napa-net.org, May 2025

Suit Says Cigna Committed Fiduciary Faults With Stable Value, Forfeitures

A lawsuit has been filed by participants Amanda Reven and Antoinette Argentine, accusing The Cigna Group 401k Plan Retirement Plan Committee of fiduciary breaches related to a stable value option and misuse of plan forfeitures. The plaintiffs, represented by Capozzi Adler PC, claim that the committee failed to properly and adequately review the plan's investment portfolio, both initially and continuously, to ensure that each investment option was prudent in terms of performance.

Source: Napa-net.org, May 2025

Cigna Hit With Forfeiture Lawsuit; Intuit Reaches Settlement

As lawsuits persist against companies accused of mishandling forfeited funds in 401k plans in violation of their obligations under ERISA, Cigna Group has become the latest firm to be sued regarding its management of forfeitures. In contrast, software giant Intuit Inc. has reached a settlement after the court approved the case to proceed into 2024.

Source: Plansponsor.com, May 2025

New Law Firm Brings Forfeiture Case Against W.W. Grainger

A lawsuit has been filed against W.W. Grainger's 401k plan, which has over 30,000 participants and approximately $3.45 billion in assets, for alleged breaches of fiduciary duties under ERISA. The plaintiffs claim that the plan's fiduciaries misused forfeitures to benefit the company by reducing future employer contributions. This practice is said to violate the responsibilities of loyalty and prudence mandated by ERISA.

Source: Psca.org, May 2025

Giant Eagle Settles ERISA Class Action Suit Alleging Failure to Control 401k Plan Costs

Giant Eagle, a grocery store chain, has settled a class action lawsuit that claimed it violated ERISA by not adequately managing administrative and recordkeeping costs for its 401k plan. The lawsuit, led by a former employee, alleged that this negligence resulted in significant financial losses for plan participants. The details of the settlement reached through mediation, have not been disclosed. The case is Cheryl Kehrer v. Giant Eagle Inc. et al., in the U.S. District Court for the Western District of Pennsylvania.

Source: Hallbenefitslaw.com, May 2025

Sixth Circuit Ruling Shows Toughening on ERISA Fiduciary Suits

A recent decision by the Sixth Circuit upheld the dismissal of a proposed class action against Denso International America, highlighting a trend among appellate courts to raise the standards for cases alleging breaches of fiduciary duty under federal benefits law. The three-judge panel supported a Michigan federal court's July 2023 ruling that rejected former employee Martha D. England's ERISA lawsuit for lack of a valid claim. This ruling has prompted defenses from attorneys representing employers in similar 401k excessive fee cases in other courts, including Florida and the Eighth Circuit.

Source: Wagnerlawgroup.com, May 2025

Sixth Circuit Stands by Plausibility Standard in 401k Excessive Fee Suit

The court rejected the plaintiffs' claims that the Commonspirit case was not relevant, noting that comparisons based solely on industry surveys are insufficient. It also disagreed with the Seventh Circuit's ruling in Hughes v. Northwestern University, stating that it lacks the context-specific details needed to demonstrate that fees are "excessive relative to the services rendered." In summary, in the Sixth Circuit, plaintiffs are required to provide plausible arguments that include both a comparison of fees and the services provided, rather than relying solely on fee comparisons.

Source: Napa-net.org, May 2025

Considerations for Plan Sponsors in the Wake of Cunningham v. Cornell

ERISA-related lawsuits, particularly those involving excessive fees, have significantly increased over the past decade, with newer strategies like forfeiture litigation gaining traction. While lawsuits were once primarily aimed at billion-dollar plans, smaller plans are now also being targeted. In 2024, there were a record 53 settlements totaling over $200 million, with an average settlement of $4.6 million. However, there are strategies that plan sponsors can implement to reduce their risk of litigation.

Source: Carltonfields.com, May 2025

Intuit Reaches Settlement in Forfeiture Case

Intuit has chosen to settle a lawsuit related to a fiduciary breach concerning the use of plan forfeitures after unsuccessful attempts to dismiss the case. Filed in October 2023 in the Northern District of California, the lawsuit highlighted that the Plan allowed forfeited nonvested accounts to be used for administrative expenses or to lower future Company matching contributions. Eighteen months later, following a failed motion to dismiss, Intuit and the plaintiff, Deborah Rodriguez, reached a settlement with the help of mediator Hon. Morton Denlow (Ret.) and are seeking court approval for their agreement.

Source: Psca.org, May 2025

Schlichter Bogard Files Second 401k Forfeiture Reallocation Suit

The law firm Schlichter Bogard LLC has filed a lawsuit against Northrop Grumman, focusing on a fiduciary breach related to the reallocation of plan forfeitures. The lawsuit claims that the defendants unlawfully charged plan administrative expenses to participants' retirement accounts, violating ERISA. The suit includes a demand for a jury trial, addressing a growing area of litigation in this context.

Source: Napa-net.org, May 2025

Empower Escapes Swiss Re 401k Fiduciary Suit

A recent ERISA fiduciary breach lawsuit against the fiduciaries of the $1.45 billion Swiss Re Group U.S. Employees' Savings Plan and service provider Empower has ended quickly in favor of the recordkeeper. The lawsuit, filed just weeks ago, included multiple allegations of fiduciary breaches. The likely reason for its abrupt conclusion is that recordkeepers, like Empower, are generally not considered fiduciaries, which weakens the chances of success for such lawsuits.

Source: Napa-net.org, May 2025

Texas Federal Court Allows an ERISA Fiduciary Challenge Against Alleged "ESG Investing" Without Any ESG Funds

On January 10, 2025, the Texas federal district court ruled in Spence v. American Airlines that both American Airlines and the committee managing its 401k plans violated their fiduciary duty under ERISA. This breach was primarily related to proxy voting of securities within specific investment funds in the 401k plans. The decision is noteworthy as it may pave the way for new types of ERISA fiduciary litigation targeting 401k plans, emphasizing proxy voting rather than traditional concerns like investment performance or administrative costs. This article discusses the court's findings, legal implications, and key considerations for 401k plan sponsors and fiduciaries in light of this ruling.

Source: Troutman.com, May 2025

Plan Sponsors Beware: The U.S. Supreme Court Just Eased Requirements to File ERISA Prohibited Transaction Suits

In the case of Cunningham v. Cornell University, many ERISA retirement plan sponsors and fiduciaries hoped the U.S. Supreme Court would establish new pleading standards to mitigate the increase in litigation against such plans. However, the Court ruled that plaintiffs are not responsible for proving that ERISA Section 408 exemptions do not apply; instead, plan sponsors and fiduciaries must assert these exemptions as affirmative defenses. This ruling is expected to lead to a new surge of lawsuits targeting ERISA plans related to essential transactions with service providers.

Source: Ropesgray.com, May 2025

Impact of Forfeiture Lawsuits on Plan Sponsors

Companies have discretion on how to use forfeitures -- unvested company contributions when an employee leaves -- provided the policy is clearly stated in the plan document. Common uses for these forfeitures include reducing contribution obligations to existing participants, covering plan fees, or reallocating funds to other participants. According to PSCA's 67th Annual Survey, historically about 60% of plans reduce company contributions with forfeitures, around 50% use them to offset expenses, and about 10% reallocate them. As lawsuits related to forfeitures increase, there is interest in whether companies are maintaining or changing their forfeiture policies.

Source: Psca.org, May 2025

Settlement Reached in Principle in Pentegra Fiduciary Breach Case

Parties involved in an ERISA fiduciary breach lawsuit concerning Pentegra's multiple employer retirement plan have reached a settlement in principle, as noted in a court order on May 2, filed in the U.S. District Court for the Southern District of New York. The case was poised for further court proceedings to address prohibited transaction claims. Recently, a jury awarded a class of plan participants over $38 million for fiduciary breaches under ERISA. U.S. District Judge Philip M. Halpern stated that all remaining deadlines are paused while the parties finalize the settlement terms, and they are required to seek preliminary approval of the settlement or provide a status update by May 16.

Source: Planadviser.com, May 2025

Judge Finds in Favor of Knight-Swift in 401k Forfeiture Case

A federal judge in Arizona has dismissed a class action lawsuit against Knight-Swift Transportation Holdings, which was accused of improperly using forfeited assets from its 401k retirement plan. The lawsuit claimed that the company violated ERISA by using these funds to offset company contributions instead of covering plan expenses. A key point of contention was whether Knight-Swift was obligated by its annual Form 5500 filings to the DOL, which stated that forfeited assets "shall be used" for plan expenses.

Source: Planadviser.com, May 2025

Kaiser Prevails in Motion to Dismiss 401k Forfeiture Reallocation Suit

A fiduciary defendant, Kaiser Foundation Health Plan, along with related entities, has successfully dismissed a lawsuit filed by Stacey M. Madrigal. The suit claimed a fiduciary breach concerning the use of plan forfeitures to offset employer contributions, alleging violations of ERISA.

Source: Napa-net.org, May 2025

High Court Sets Low Bar for ERISA Prohibited Transaction Claims

The U.S. Supreme Court's unanimous ruling in Cunningham v. Cornell University has made it easier for plaintiffs in excessive fee lawsuits against ERISA plans to advance their prohibited transaction claims. The decision establishes a low pleading standard, which may hinder fiduciaries' ability to dismiss such claims at the early stages of litigation. While the ruling could lead to an increase in these lawsuits and settlements, the Court acknowledges that lower courts have mechanisms to mitigate baseless claims. The impact on sponsors and fiduciaries will largely depend on how proactively lower courts utilize these tools.

Source: Mercer.com, May 2025

Supreme Court Clarifies ERISA Prohibited Transaction Pleading Standards

On April 17, 2025, the U.S. Supreme Court issued a unanimous ruling in Cunningham v. Cornell University, establishing a more favorable pleading standard for plaintiffs in ERISA-prohibited transaction claims. Authored by Justice Sonia Sotomayor, the decision reversed the Second Circuit’s ruling, clarifying that plaintiffs do not need to preemptively state that ERISA's exemptions are not applicable. Instead, it is the responsibility of plan fiduciaries to assert and prove these exemptions as affirmative defenses.

Source: Erisalitigationadvisor.com, May 2025

Trends in ERISA Litigation: What Plan Sponsors Should Consider Now

This article focuses on five trends in ERISA litigation that plan sponsors should consider in their risk mitigation efforts: Forfeiture Accounts, Health Plan Fee Litigation, SECURE 3.0?, Health Plan Cost and Fee Transparency, and Health Plan Regulation.

Source: Barran.com, May 2025

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