ERISA Litigation Trends

Jan 15, 2026

Because of mandatory Form 5500 filings, data from employer sponsored retirement plans, like 401ks, has always been available to the public. Now, use of AI to mine the data, is propelling a confident plaintiff’s bar to bring new lawsuits against plan sponsors. As plaintiff theories under the high standards of ERISA expand and explore new angles, winning is almost besides the point: lawsuits have proven so disruptive, costly and time consuming for business owners, that the mere prospect of settlement has made the pursuit of alleged ERISA violations lucrative. For retirement plan sponsors, defense is the way to go.

Solid Governance, Documentation and Compliance

In the face of the continuing wave of ERISA litigation, attorneys at Jackson Lewis P.C. urge retirement plan sponsors to limit liability with “strong plan governance, detailed documentation, and proactive compliance reviews.” Summing ERISA litigation trends, and thinking into the year ahead, Jackson Lewis’s experts offer these insights to help plan sponsors understand how ERISA allegations are unfolding:

ERISA class action litigation did not let up in 2025. Retirement plan fee litigation – which has dominated for several years – remained steady, with new, or in some cases refined, theories targeting 401(k) forfeitures and stable value fund performance. The takeaway is clear: ERISA disputes have expanded well beyond their traditional boundaries, with plaintiffs testing fiduciary obligations in new and unexpected ways.

Traditional excessive fee lawsuits remain a major share of ERISA filings, but the contours of those claims are shifting. A key development in 2025 involved the growing focus on stable value funds, which historically attracted little scrutiny compared to target-date funds…. Plaintiffs are now alleging that certain stable value funds delivered below market crediting rates or underperformed to allegedly comparable (but typically distinguishable) conservative alternatives. These claims often accompany the familiar allegations of unreasonable…fees.

While ERISA lawsuits continue to be concerning for plan sponsors, Groom Law Group observes that recent news is not all bad, noting for example: “settlement values in fee cases seems to be declining, signaling a recalibration of litigation strategies on both sides.” Additionally, though forfeiture litigation has opened up new challenges for plan sponsors, successful motions to dismiss have offered hope for stemming the tide:

One of the most notable developments of 2025 is the surge in lawsuits challenging how employers use 401(k) forfeitures — the unvested employer contributions left behind when employees depart. Plaintiffs argue that plan sponsors breach fiduciary duties when they apply forfeitures to offset future employer contributions rather than to pay plan expenses otherwise paid by plan participants….Courts across the country have been actively addressing motions to dismiss on forfeiture litigation, and in most instances, the motions have been granted.

Good To Know: Plan Sponsors Are Fiduciaries

When you sponsor a retirement plan at your business, you are a fiduciary. Whether or not you know that, understand it, or enjoy the responsibilities it entails, under the high standards of the Employee Retirement Income Security Act of 1974 (aka ERISA), you can be held personally liable for oversights that impact the savings of everyone trusting you—participants and their beneficiaries. Even if you outsource services, you retain fiduciary responsibilities: afterall, you made the outsourcing decisions, right? That’s how ERISA works.

Specific examples of what you can be held personally accountable (aka liable) for as a fiduciary include:

Decisions: Do you have the right advisor, and investment options?
Cost control: Are the plan fees reasonable and services solid?
Compliance: Do operations adhere to the plan document, and government regulations?

Toward fulfilling fiduciary obligations, ERISA attorney, Ary Rosenbaum, encourages all retirement plan sponsors to take these seven actions ever more seriously:

Form a Fiduciary Committee
Benchmark your fees. Then do it again.
Hire the right advisors—then hold them accountable.
Avoid the “set it and forget it” trap.
Communicate with participants like it actually matters.
File your Form 5500–and everything else–accurately and on time.
Most importantly, care.

Even for the most diligent and caring plan sponsor, securing fiduciary liability insurance is a wise action too, given the stakes. Defense against an ERISA allegation typically costs upwards of $600—per hour. To ensure that all retirement plan sponsors can protect themselves with fiduciary liability insurance, Colonial Surety Company provides affordable coverage: the annual premium is less that just one hour ERISA defense if disaster strikes—and we even include cyber liability insurance at no extra cost.

For a few dollars a day, Colonial Surety Company’s Fiduciary+ Cyber Liability Insurance bundle arms retirement plan sponsors with:

$1,000,000 for Defense and Penalties if you are faced with alleged or actual breaches of fiduciary duty.
Cybersecurity Coverage for the business and plan, which addresses Department of Labor recommendations, and includes expert response services to curtail damage after an incident.

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