In our recent article, Fiduciary liability: A look ahead to 2026, we outlined how fiduciary litigation is expected to remain a defining feature of the retirement plan landscape. While excessive fee claims persist, newer litigation trends — including forfeiture usage, vendor compensation arrangements and plan administrative practices — are expanding the scope of fiduciary scrutiny.
These developments reinforce an important reality: fiduciary risk is no longer limited to discrete decisions. Increasingly, it reflects the underlying structure through which defined contribution (DC) plans are governed, administered and delivered.
As a result, plan sponsors are looking beyond day-to-day administration to limit their fiduciary risk, to whether their plan’s operating model itself may influence that risk and what the available options are to transfer the risk.
Key 2026 fiduciary litigation trends
As discussed in our fiduciary liability outlook, litigation continues to evolve in several important ways:
- Excessive fee claims remain prevalent, with increased scrutiny on investment performance, fee benchmarking and vendor arrangements.
- Forfeiture-related lawsuits are rising, challenging long-standing administrative practices.
- New litigation theories are emerging, including vendor compensation and plan operational decisions.
- Legal outcomes are still highly inconsistent, contributing to continued uncertainty for plan sponsors.
These trends share a common thread: while many claims continue to focus on outcomes, such as fees and investment performance, they increasingly test the processes, governance and oversight structures surrounding the plan. This distinction is important. It suggests that fiduciary risk is shaped not only by individual investment outcomes, but by the broader governance model and the ability to demonstrate a prudent process.
During 2025, there were 43 class actions with forfeiture allegations, compared to 30 in all of 2024 and 5 in 2023. Though, new cases have slowed with only 5 filings in the early part of 2026.
Source: Bloomberg Law
Why traditional governance models are under pressure
The traditional single-employer plan structure places primary fiduciary responsibility on the employer and its appointed committee. While this model has served sponsors for decades, it also creates inherent challenges:
- Fiduciary oversight is layered onto corporate roles. Plan committees typically consist of internal employees whose fiduciary responsibilities are in addition to their primary business functions.
- Governance consistency can vary over time. Committee composition, HR team turnover, expertise and areas of focus naturally evolve, which can introduce variability in oversight.
- Vendor and fee oversight remains decentralized. Sponsors must independently evaluate fees, investments and service providers, often without institutional scale or specialized fiduciary infrastructure.
- Administrative complexity continues to increase. Regulatory changes, participant expectations and operational requirements add to the governance burden.
Even plans governed by prudent committees and sound practices remain vulnerable to litigation, as plaintiffs continue to challenge outcomes, while plan fiduciaries increasingly rely on process, documentation and oversight to defend those claims.
During 2025, there were 51 class actions with excessive fee allegations, versus 47 in 2024 and 43 in 2023.
Source: Bloomberg Law
Pooled Employer Plans (PEPs): A structural solution to fiduciary risk
Historically, plan sponsors have managed fiduciary risk primarily through incremental improvements such as enhancing committee governance, increasing documentation, conducting fee benchmarking studies, and expanding advisor support.
These remain important practices. However, the persistence and evolution of litigation and the expansion of fiduciary outsourcing options is prompting plan sponsors to consider a more fundamental question:
Is the traditional single-employer governance model the most effective structure for managing fiduciary risk in today’s environment?
In response, some employers are reconsidering the structural model through which their retirement plans are delivered. Pooled employer plans (PEPs) represent an alternative governance framework that embeds fiduciary governance directly into the plan’s structural foundation. Rather than each employer independently managing all pillars of fiduciary oversight, the pooled plan provider serves as the primary fiduciary responsible for key plan functions. What’s left for the employer is to simply monitor the Pooled Plan Provider, thereby streamlining their fiduciary responsibilities.
This shifts several core responsibilities, such as investment selection, fee monitoring and vendor oversight, from individual employers to a professional fiduciary structure. The result is a governance model designed specifically to deliver retirement plans at institutional scale.
How PEPs address today’s litigation drivers
Many of the litigation trends outlined in our fiduciary liability outlook relate directly to areas managed centrally within a PEP structure.
- Fee oversight and benchmarking: Fee litigation often focuses on whether plan fiduciaries effectively monitored and negotiated plan fees. Within a PEP, fee oversight occurs at the PEP level, where processes are in place to monitor fees constantly and aggregated scale may support institutional pricing.
- Investment governance and monitoring: Investment selection and monitoring are managed by professional fiduciaries with sizable research teams and dedicated oversight processes.
- Administrative consistency and operational discipline: Operational practices, including areas such as forfeiture administration and vendor coordination, are standardized and governed centrally.
- Fiduciary accountability alignment: Perhaps most fundamentally, primary fiduciary responsibility for these core functions resides with the pooled plan provider, who has demonstrated expertise in retirement plans, rather than being dispersed across individual employer committees.
This structural alignment reflects a governance model designed specifically for retirement plan fiduciary management.
Aligning retirement plan delivery with an increasingly complex fiduciary environment
The continued evolution of fiduciary litigation reflects the growing complexity of retirement plan governance. As responsibilities expand and scrutiny increases, plan sponsors are evaluating how retirement plans can be delivered with greater consistency, scale and governance discipline.
Pooled employer plans represent one example of this broader shift by moving from an employer-centric fiduciary model toward a professionally governed, institutionally structured approach. For many organizations, this represents not just an operational change, but a strategic evolution in how retirement benefits are delivered.
Looking ahead
Fiduciary litigation trends outlined in our recent outlook reinforce the importance of governance, process and structural discipline in retirement plan delivery. While litigation itself may ebb and flow, the underlying drivers — complexity, accountability and fiduciary expectations — will remain.
As plan sponsors navigate this environment, structural solutions such as pooled employer plans (PEPs) are likely to play an increasingly important role in aligning retirement plan governance with the realities of modern fiduciary oversight.
How WTW’s LifeSight® PEP supports growing interest to transfer fiduciary oversight
WTW’s LifeSight PEP provides employers with access to a professionally governed retirement plan designed to deliver institutional-quality oversight, simplifying plan sponsorship while still allowing flexibility for the plan design to reflect each organization's unique needs.
By aligning fiduciary accountability, governance infrastructure and operational delivery within a single integrated structure, LifeSight helps employers navigate an increasingly complex fiduciary environment while continuing to support strong retirement outcomes for their employees.
Disclaimer
This document is based on information available to WTW at the date of issue and takes no account of subsequent developments. In addition, past performance is not indicative of future results. In producing this document WTW has relied upon the accuracy and completeness of certain data and information obtained from third parties. This document may not be reproduced or distributed to any other party, whether in whole or in part, without WTW’s prior written permission, except as may be required by law. Views expressed by other WTW consultants or affiliates may differ from the information presented herein. Actual recommendations, investments ;or investment decisions made by WTW, whether for its own account or on behalf of others, may differ from those expressed herein.
