In 2025, we saw both positive and negative developments in fiduciary litigation and enforcement, and, as a result, the fiduciary insurance market remained stable. Premiums largely remained flat, with some insurers willing to offer improved terms to insureds with positive or improved risk profiles. Plaintiff lawyers continued to pursue relatively new theories of liability, including one new type of fiduciary class action in the final days of 2025 (four novel class actions relating to voluntary benefit programs, which may or may not be subject to ERISA regulation).
Last year, we identified the Cornell University case, the Parker-Hannifin case and welfare plan excessive fee class actions as the most important cases to watch for potential impact on the market. While plaintiffs were successful in reversing the defense victory in Cornell, this extreme outcome seems likely to result in legislative actions which could turn out to be very favorable to plan sponsors. The Parker-Hannifin decision is headed to the U.S. Supreme Court, with the Department of Labor weighing in for the defense. Lastly, all of the welfare plan excessive fee cases have been dismissed, but with leave to replead. In other words, there have been conflicting and inconclusive results in these still-developing stories. Meanwhile, it should be factored in that the Department of Labor (DOL) and Employment Benefits Security Administration (EBSA) have requested a reduced budget and headcount and seem to be planning to bring fewer claims, while at the same time filing amicus briefs in support of defendants in five cases (so far).
As long as these cases and related issues remain unresolved, the insurance market seems likely to continue to stand by watchfully, keeping premiums steady and insurers cautious into 2026.
The fastest growing type of fiduciary class action litigation has been forfeiture litigation. In the first 10 months of 2025, there were 43 class actions with forfeiture allegations, compared to 30 in all of 2024 and 5 in 2023.
Prediction: The weight of judicial and regulatory authority will continue to go against plaintiffs in relation to forfeiture allegations, but there will continue to be new filings, possibly until there is a clear statement from the Supreme Court. However, filings will probably slow considerably in the likely event that the Ninth Circuit confirms the dismissal of the HP case.
According to a source which differentiates between types of claims against defined contribution plans, in the first 10 months of 2025, there were 51 class actions with excessive fee allegations, versus 47 in 2024 and 43 in 2023. While there appear to have been minor increases in filing volume during the last few years, volume remains down considerably from 2022, when there may have been as many as 89 filings.
In 2025, the most common allegation included in excessive fee class actions was that the plan in question offered a Stable Value Fund which had lower returns than other allegedly comparable funds (this allegation appeared in 27 cases, compared to only five in 2024). On the other hand, allegations about recordkeeping fees were down somewhat, allegations about target date funds were substantially down and share class allegations were only featured in four cases.
Although there weren’t any circuit court decisions relating to excessive fees in 2025, there have been some further developments in cases previously discussed.
In 2024, the Second Circuit and the Eighth Circuit affirmed dismissals because the complaints did not allege “meaningful benchmarks.” Meanwhile, in a highly criticized decision with a strong dissent, the Sixth Circuit stated that plaintiffs suing Parker-Hannifin did not have to plead “meaningful benchmarks.”
In the Parker-Hannifin case, the defendants were unsuccessful in seeking en banc review, despite the U.S. Chamber of Commerce and other parties filing amici briefs in support. Thereafter, in response to a request from the U.S. Supreme Court to weigh in, the Solicitor General filed a brief on behalf of the DOL and the DOJ in support of the Court granting certiorari.
The Solicitor General also submitted a brief in support of defendants in another case, supporting the grant of certiorari to side with the Eleventh Circuit’s 2024 holding (contrary to several other circuits) that plaintiffs have the burden of proof on loss causation in addition to on the preliminary issues of breach and loss. On January 8, 2026, the plaintiffs withdrew their appeal to the Supreme Court and the next day the DOL issued a statement welcoming that decision and stating that existing Supreme Court precedent is clear that “plaintiffs bear the burden of proving the essential elements of their claims, including loss causation.”
Meanwhile, recent settlements have been trending much lower than in previous years (see chart below):
Mayer Brown, in commenting on the above chart, which they created, stated “While a handful of outlier high-dollar settlements (typically in cases with unique factual circumstances and alleging more than excessive recordkeeping fees) continue to impact the annual average settlement amount, the median settlement amount has decreased,” with the median settlement in 2025 being roughly half of what it was in 2023.
Prediction: It seems unlikely that we will see a return to 2022 filing volume; 2026 will probably see excessive fee filing numbers in the 40s or 50s. Settlement figures will probably remain modest except in cases involving 10 and 11-figure plans and/or proprietary investments.
Meanwhile, several other types of class actions were filed in 2025 and can be expected to continue into 2026 and beyond.
Class actions involving defined benefit plans and arising from allegedly outdated mortality tables, which first appeared on the scene in 2018, were not filed in 2025. These cases allege that, by basing their calculations on obsolete mortality tables from periods between the 1950 and the 1980s, plan sponsors have been underpaying benefits to retirees who elect to receive lump sums. More than 30 such class actions have been filed, including 3 in 2024. The main issue is whether ERISA has an implied requirement that mortality tables be “reasonable” (because it does not have an express requirement to that effect).
Although more actuarial equivalence cases have gotten past motions to dismiss than have been dismissed, and some cases have been settled for substantial figures (including a $59 million settlement), to date, there has never been a finding of liability. Also note that in two cases in which courts addressed the merits of class certification, the courts both refused to grant certification.
Prediction: Despite the lack of a new filing in 2025, it seems likely that we will continue to see an occasional such suit in 2026 as long as the law remains unsettled, with circuits remaining split as to whether a mortality table “reasonableness” standard should be an implied requirement.
In 2024, several different law firms filed at least 27 class actions alleging that plan sponsors of health and welfare plans violate the anti-discrimination provisions, which were amended into ERISA by the Patient Protection and Affordable Care Act, by charging a higher premium based on a “health status-related factor” without offering an acceptable wellness program to allow for an exception. While most of these cases involve a class of tobacco smokers, some cases involve higher premiums for unvaccinated participants. These cases are still new, and everyone is waiting for appellate court decisions to validate or strike down the allegations. Since plaintiffs and some courts have relied on DOL regulations, which require that the exception be provided on a retroactive basis (in order to make available the statutorily required “full reward”), defendants’ chances in these suits may ultimately be bolstered by the decision in Loper Bright v. Raimondo, which struck down the Chevron standard of deference to regulatory agency interpretations of statute. However, up to now, the vast majority of these suits have gotten past motions to dismiss, and there have been several rapid settlements for up to $5 million. For a more thorough discussion, see “Tobacco Surcharge Litigation Update.”
Prediction: These suits will continue and result in some substantial settlements, but eventually some courts will rely on Loper Bright to ignore the DOL’s draconian interpretation of the ERISA anti-discrimination provisions in question and rule that retroactivity is not required.
High-profile litigation against plan sponsors alleging excessive prescription drug costs under health and welfare plans largely stalled in 2025. Two nearly identical suits — one against Johnson & Johnson and another against a different large employer — were dismissed without prejudice, primarily on standing grounds. Contrary to predictions and threats from the Schlichter Bogart firm, only one additional prescription drug pricing class action was filed in 2025.
At the same time, pharmacy benefit managers (PBMs) have come under increasing scrutiny. Plan sponsors have filed suits, bipartisan federal regulation proposes to designate PBMs as ERISA fiduciaries and California has enacted sweeping PBM regulations effective January 1, 2026.
Prediction: After refiling, one of the three existing class actions may get past a motion to dismiss with the assertion that paying too much out-of-pocket for prescription drugs is an injury-in-fact. If that happens, then more such cases will probably get filed; otherwise, there may be no more such cases. In any case, we will probably see more plan sponsors preemptively suing PBMs.
In the midst of positive news about defined benefit pension plan funding and a rise in plan sponsors arranging for buyouts of their pension liabilities (pension risk transfers) in order to gain access to the surpluses, plaintiffs have filed class actions against nine sponsors who have arranged for such transactions.
Prediction: The one decision which found that plaintiffs had “barely” alleged facts to support standing will probably be reversed by the Fourth Circuit. This could lead to a break in PRT litigation, although some plaintiff firms may still be tempted by particularly large PRTs to roll the dice.
On December 23, 2025, the Schlichter firm (which introduced the world to excessive fee class action litigation with numerous filings on September 11, 2006) debuted a new type of fiduciary class action. The firm sued four plan sponsors, along with their benefit advisors (four different companies), alleging breaches in connection with the offering of voluntary benefits to their employees, namely accident, critical illness and hospital indemnity insurance.
The complaints allege that, as a result of the plan sponsor’s “failure to exercise reasonable diligence in the administration of the Plan, including by failing to monitor, negotiate, and ensure prudent and reasonable carrier selection, broker commissions, and loss ratios for the Voluntary Benefits Insurance, Plaintiffs as participants of the Plan paid excessive and unreasonable premiums.” Plaintiffs also allege that the benefits advisors were overcompensated, engaged in self-dealing and are liable for disgorgement and other equitable relief. Plaintiffs allege that the voluntary benefit programs in question are welfare benefit plans that don’t qualify for a regulatory safe harbor for “certain group or group-type insurance programs” contained in 29 C.F.R. § 2510.3-1(j).
Prediction: Defendants will argue that the voluntary benefit programs are not ERISA-regulated welfare plans, and also raise the type of standing defenses which have been successful so far in the welfare plan excessive fee cases. Most of these cases will be dismissed on motion, but one or more could survive.
Prediction: Last year we predicted that the Supreme Court would affirm the Second Circuit decision because the opposite result would be untenable. We were half-right. The Supreme Court chose to reverse, even though all nine justices clearly found the result to be untenable. Furthermore, there is substantial sentiment in Congress that the decision created a problem (too low a pleading threshold) that must be corrected. Consequently, it seems likely that a law will eventually be enacted which shifts the burden to plaintiffs to plead the lack of a relevant exemption on prohibited transaction claims; it will be a bonus if the proposed motion to dismiss discovery stay becomes law. In the meantime, it is likely that more courts will follow the example of the California federal court which forced plaintiffs into Rule 7 briefing before allowing the prohibited transaction case to proceed.
American Airlines was sued in Texas federal court in June 2023 for allegedly offering imprudent and expensive ESG-oriented investments, although it did not actually include such investment options in its main menu. After motions to dismiss and for summary judgment were denied, there was bench trial which resulted in a decision on January 10, 2025, finding that American did not violate the duty of prudence but did breach the duty of loyalty due to a close relationship with Black Rock. The court asked for additional briefing on damages, having expressed some skepticism for the plaintiff’s theories on that front.
Subsequently, the Court made a finding of no damages, but nonetheless ordered five forms of equitable relief, including banning ESG-oriented proxy voting and shareholder proposals and effectively enjoining American from using BlackRock to manage Plan assets without strict policies in place.
Thereafter, the plaintiff firm filed a brief requesting $7.9 million in fees. Defendants are expected to oppose the request.
Prediction: The fact that the judge found no damages is likely to dampen plaintiff enthusiasm for bringing ESG-oriented class actions, even though the plaintiff firm is likely to be awarded several million dollars in fees. Still, it is possible that plaintiffs could attempt to pursue other ESG cases, particularly in a friendly jurisdiction like Texas.
Recent executive actions reflect a shift in the federal government’s fiduciary regulatory priorities. In its February 21 America First Investment Policy memo, the administration directed the DOL to update fiduciary standards regarding investments tied to foreign adversaries. In its December 11 executive order entitled “Protecting American Investors from Foreign-Owned and Politically Motivated Proxy Advisors,” the SEC, FTC and DOL were encouraged to regulate proxy advisors more aggressively. After years of litigation over the prior rule, the DOL announced plans to replace the current ESG investment rule with one more closely aligned with the 2020 framework, which discouraged ESG considerations.
In addition, recent executive orders rescinded prior DOL guidance that imposed an “extreme care” standard for cryptocurrency investments and encouraged greater access to alternative assets. On January 13, 2026, the DOL submitted a proposed regulation entitled “Fiduciary Duties in Selecting Designated Investment Alternatives.” Thereafter, on January 16, the Supreme Court agreed to hear an appeal of a case involving Intel, in which the primary question is whether plaintiffs need to plead “meaningful benchmarks” in a claim involving allegedly imprudent investments in alternative assets. (Note that this issue mirrors the “meaningful benchmarks” question presented in the Parker-Hannifin excessive fee case which is also likely to be considered by the Supreme Court).
Prediction: EBSA recoveries for 2025 will be less than the $1.4 billion figure which it has hovered around for the last several years and 2026 recoveries will be less still, as the reduced staff at EBSA and the DOL deemphasize and change several of their past priorities. Meanwhile, the DOL’s amicus briefs filed on behalf of defendants in five cases (and likely to be filed in the Intel case) will be helpful to plan sponsors in defending private class actions.
Fiduciaries are presumably considering many factors in relation to themselves and to any parties to whom they delegate any duties, starting with whether they understand how AI is or isn’t being incorporated into decision making. What are the risks of using AI and of not using it? How can one ensure that information being used and created by AI is reliable and compliant with regulations? Do the benefits of AI-powered recordkeeping functions outweigh the potential risks? Should the fiduciaries seek independent professional advice regarding how they should be using AI? For useful discussions on this topic, see:
Prediction: Last year we predicted that we would start to see AI-related fiduciary litigation in 2025. That didn’t happen, but it continues to seem likely that it’s coming. Claims will likely focus on allegations of improper delegation, possibly to investment managers who may have allegedly over-delegated to their AI systems. Fiduciaries will want to know the answers to questions like the ones above in order to have a chance of establishing process-related defenses to such claims.
The current default in the fiduciary insurance market continues to be pressure toward flat renewals, with some ability to distinguish individual risks for reductions. The specific matters which were highlighted last year remain in flux, but we have seen interim results which didn’t noticeably move the needle. In late December, we saw the beginning of a new potential trend involving voluntary benefit programs, but the plaintiffs in those cases have several hurdles to overcome before it can become a successful theory for meaningful recoveries.
Meanwhile, it seems clear that the Department of Labor and EBSA are going to continue to be less active than under previous administrations, but it should be noted that government claims have never been a major factor in fiduciary insurance pricing. The amicus briefs which the DOL is filing on behalf of plan sponsors may be a larger factor in reducing litigation risk.
As a result of some of the recent class action trends, some carriers may expand their applications yet again. Still, the market seems likely to continue to maintain a historical perspective about the way that plaintiff theories come and go, resulting in continued stable premiums with some additional opportunities for coverage enhancements.
WTW hopes you found the general information provided here informative and helpful. The information contained herein is not intended to constitute legal or other professional advice and should not be relied upon in lieu of consultation with your own legal advisors. In the event you would like more information regarding your insurance coverage, please do not hesitate to reach out to us. In North America, WTW offers insurance products through licensed entities, including Willis Towers Watson Northeast, Inc. (in the United States) and Willis Canada Inc. (in Canada).
