This Month’s Topic –The State of ERISA Litigation and Fiduciary Liability

• 95% Class certification rate for recently filed ERISA class actions
• $1b+ More than a billion has been paid out in connection with excessive fee litigation and imprudent investment litigation over the past several years.
• 60% Approximate percentage of excessive fee lawsuits that survive the motion to dismiss stage, allowing plaintiffs to negotiate from a position of strength.

What’s Happening

ERISA litigation in 2026 is expanding beyond traditional 401(k) fee and investment claims into 401(k) forfeitures, voluntary benefit programs, and health plan/PBM practices, how employers use forfeited funds from employees who leave before full vesting, and other theories that would presumably expand fiduciary liability.

Who is being affected

Sponsors of company plans and those with fiduciary duties subject to ERISA oversight, regardless of company size, may be in the crosshairs of aggressive plaintiffs’ attorneys.

The trickle down

As employers add programs and look to provide additional benefits that their employees can take advantage of, they’re simultaneously increasing their own fiduciary exposure as there is increased scrutiny of every aspect of sponsored plans.

The Unplugged Take

Employers are working to expand benefits and offerings for their employees, but along with those offerings comes the potential for additional scrutiny and litigation. Employers should make sure those programs follow the same diligence and oversight as their traditional ERISA plans.

Questions worth asking

Review your current program and consider these questions.

1. Are you purchasing sufficient limits of coverage under your Fiduciary Liability policy?
2. If you’re using outside vendors to assist with specialized fiduciary functions, is their work being monitored to ensure compliance with your practices? Do they carry their own insurance, and will they indemnify you should litigation be filed?
3. Does that policy include defense costs coverage for Wage & Hour claims?
4. Are you offering voluntary benefits (critical illness, hospital indemnity, and cancer insurance, etc.) and are those programs following the same diligence regarding prudence and fee review?

Claims Radar

Fiduciary

Matula v. Wells Fargo & Co.
In a decision that involved how forfeited employer matching contributions were used by an employer and plan sponsor, the
8th Circuit reinforced the long-standing principle even where plaintiffs invoke plan-wide remedies under ERISA § 502(a)(2), Article III requires a concrete injury to the named plaintiff. Other forfeiture appeals remain pending in the Third, Fourth, and Ninth Circuits.

Consider: How are you using forfeited matching funds? Do you have established procedures, and are they disclosed in Plan documents?

Fiduciary

Pover v. The Capital Group Cos. Inc. et al.
The 9th Circuit affirmed a California trial court’s denial of a motion to compel arbitration in a 401(k)-plan dispute, keeping certain class-wide ERISA fiduciary claims in federal court rather than forcing bilateral arbitration.

Consider: Litigation costs for these claims will remain high. Do you have favorable arrangements with counsel to assist you in these matters?

Fiduciary

Bolton v. Inland Fresh Seafood Corp of America.
The 11th Circuit held that ERISA plaintiffs do not need to exhaust administrative remedies before filing federal lawsuits that allege statutory violations or breaches of fiduciary duty.

Consider: As litigation will commence earlier, good recordkeeping and the ability to effectively engage in the discovery process will be important.

Directors and Officers

Tariff-related securities class action litigation is on the rise.
More lawsuits are being filed that revolve around the impact tariffs have had on the financial results of companies. The allegations include claims that a company understated the impact on their bottom line, to the polar opposite where companies allegedly overstated the expected impact to justify lower financial projections or justify a reduced valuation.

Consider: The financial impact of tariffs is relatively new but is a focus of the plaintiff’s bar, so accurate reporting will be paramount.

Consumer Privacy

U.S. Supreme Court Considering the Breadth of the VPPA.
In a case centered on the Video Privacy Protection Act (VPPA), the court is weighing whether plaintiffs can continue using the tape-rental law to target modern digital tracking pixels and data-sharing practices on general media and e-commerce sites.

Consider: Is your company using pixels or other tracking software on your websites? Are you providing adequate notice and opt-outs?

Let’s Talk

Bring us the Question That Matters Most. 

Financial Claims Unplugged is published monthly by the Relation Financial Lines Group. If one of these topics lands with you, your Relation team is ready to walk through what your program does and does not cover.